Elon Musk: Tesla Is Finally Building the Product Investors Begged for

Investors clamouring for a budget Tesla just got more intel about it.

The EV giant’s CEO, Elon Musk, said on Wednesday that Tesla’s long-awaited affordable model will resemble the Model Y.

Musk was speaking to investors in Tesla’s latest earnings call when an analyst asked for more details about the budget-friendly EV Musk has long been touting.

“It’s just a Model Y. Let the cat out of the bag there. Dancing cat that can talk and sing and dance,” Musk said. “That’s the cool part.”

Musk did not give further details on the model or its release date. Lars Moravy, Tesla’s vice president for vehicle engineering, said on the call that the company expects the new vehicle to be “available for everyone” in the fourth quarter of 2025.

Representatives for Tesla did not respond to a request for comment from Business Insider.

Musk said during the earnings call that the “biggest obstacle” to getting more people to own EVs is that they “don’t have enough money in their bank account to buy it.”

“Literally, that is the issue. Not a lack of desire, but a lack of ability. So, the more affordable we can make the car, the better,” Musk added.

Musk told the analyst that the car’s self-driving features would make it even more affordable for customers.

“It will be a very big deal when people can release their car to the fleet and have it earn money for them,” Musk continued.

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Musk said he felt confident that Tesla’s customers would be able to rent out their vehicles “next year, in the US at least.”

Back in January, Musk said at Tesla’s fourth quarter earnings call that he expects his vehicles to operate with unsupervised full-self-driving in several US cities by the end of this year, and “probably everywhere” in North America next year.

“That will make affordability dramatically greater. If you have an Airbnb and you can rent out your home when you are not there, or rent out a guest room, or guest house, or something like that. The affordability of your house is much greater,” he said on Wednesday.

Tesla first launched the Model Y in 2020. In January, an updated version was released in China, the US, Canada, the UK, and mainland Europe. The Model Y was the world’s best-selling car in 2023, though it has since ceded ground to its Chinese rivals.

Tesla analysts said earlier this year that releasing a cheaper EV could help the company shore up its position against the low-cost EVs that its Chinese rivals are selling.

Musk’s company has struggled with sales in China. During the second quarter of 2025, the company sold 129,000 vehicles in China, down nearly 12% from the same period in 2024, according to data from the China Passenger Car Association.

In June, Chinese tech giant Xiaomi said it received over 200,000 orders in 3 minutes for its new YU7 electric SUV. Priced at about $35,000, Xiaomi’s YU7 is slightly cheaper than Tesla’s Model Y, which starts at $36,760.