Production is scheduled to begin around August or September. Tesla has announced that it will launch a cheaper Model Y to boost sales following its dismal quarterly sales and revenue decline. In January earlier this year, Elon Musk had said the carmaker would launch affordable models. However, rather than introducing an all-new model, it is opting for a stripped-down version of the Model Y. Production is scheduled to begin around August or September. Tesla hopes the new base model will help incentivize sales in the US, where current $7500 government electric car grants are due to be stopped as part of President Donald Trump's rollback of emission mandates. Tesla’s second-quarter earnings saw a 16 percent dip in income to $1.17 billion. This was blamed on a 13 percent decline in sales, a reduction in its average model selling price and an increase in operating expenses. Most importantly, revenue from electric car credits, bought by other manufacturers to hit mandated emissions targets, which Tesla has hugely profited from previously, has dropped by 51 percent since Q2 2024, including $154m since the previous quarter alone. 2025 hasn’t been great for Tesla so far. It has struggled in terms of sales in China, a very important market for the carmaker. Another reason is the tariff tensions and competition from Chinese EV makers. This is despite launching an upgraded version of the Model Y. While Tesla has no other mainstream models in the pipeline, Musk said he expected a wave of revenue to come from the brand’s upcoming self-driving technology, such as its robotaxi service and vehicles such as the Cybercab. It has also invested heavily in the development of humanoid robots.