Elon Musk: Tesla Delivers the Product Investors Demanded
Elon Musk Reveals Details About Tesla's Affordable EV
During Tesla’s second-quarter earnings call, Elon Musk, the CEO of the electric vehicle (EV) giant, gave a hint about the company’s upcoming budget-friendly car. He described it as “just a Model Y,” which sparked curiosity among investors and analysts. The comment came during a discussion with analysts who were eager to learn more about the long-awaited affordable model that Musk has been promoting for some time.
Musk was speaking to investors when an analyst asked for more information about the new vehicle. In his characteristic style, he added a playful twist by mentioning, “Let the cat out of the bag there. Dancing cat that can talk and sing and dance.” While the metaphor was lighthearted, it emphasized that the new car would have unique features that make it stand out.
Despite the intriguing description, Musk did not provide specific details about the model or its release date. However, Lars Moravy, Tesla’s vice president for vehicle engineering, mentioned that the company expects the new vehicle to be available for everyone in the fourth quarter of 2025. This timeline suggests that the car could be ready for market just in time for the holiday season, which is typically a strong period for automotive sales.
Addressing Affordability Challenges
One of the main challenges Musk highlighted during the call was the affordability of EVs. He stated 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." Musk emphasized that the issue isn’t a lack of desire but rather a lack of financial ability. He believes that making the car more affordable will significantly increase adoption rates.
In addition to lowering the price point, Musk also mentioned that the car’s self-driving features could further enhance its value. He explained that once the technology is fully implemented, owners could rent out their vehicles to generate income. “It will be a very big deal when people can release their car to the fleet and have it earn money for them,” he said.
Musk expressed confidence that Tesla customers would be able to rent out their vehicles “next year, in the US at least.” This feature aligns with the concept of a shared mobility economy, where users can access vehicles on demand without the need for ownership.
Self-Driving Technology and Market Competition
Musk also discussed the potential impact of self-driving technology on the affordability of EVs. He compared it to the concept of Airbnb, where homeowners can rent out their properties when they are not using them. “The affordability of your house is much greater,” he said, drawing a parallel between home rentals and vehicle rentals.
Earlier this year, Musk had stated that he expects Tesla’s vehicles to operate with unsupervised full-self-driving in several US cities by the end of 2024. He also mentioned that this capability could expand across North America by next year.
Competitive Landscape and Sales Performance
Tesla first launched the Model Y in 2020, and an updated version was released in January 2025 in several key markets, including China, the US, Canada, the UK, and mainland Europe. The Model Y was the world’s best-selling car in 2023, but it has since faced stiff competition from Chinese EV manufacturers.
Tesla has struggled with sales in China, where the company sold 129,000 vehicles during the second quarter of 2025—nearly a 12% drop compared to the same period in 2024. This decline highlights the growing threat posed by local competitors.
In June, Xiaomi, a major Chinese tech company, received over 200,000 orders for its new YU7 electric SUV within just three minutes. Priced at around $35,000, the YU7 is slightly cheaper than Tesla’s Model Y, which starts at $36,760. This development underscores the increasing pressure on Tesla to introduce a more affordable option to maintain its competitive edge.
Analysts believe that releasing a cheaper EV could help Tesla strengthen its position against low-cost Chinese rivals. With the upcoming budget model expected to launch in 2025, Tesla may find itself in a better position to reclaim market share and continue leading the EV revolution.