According to Chinese blog posts from earlier last week, now vetted by Reuters, Tesla intends to produce a cut-down version of the Model Y, initially for the Chinese market, sometime in 2026.
This follows the launch of Tesla’s cut-down Model 3 for Mexico, as well as news that Tesla intends to launch their new next-gen model sometime in the near future.
Cut Down, But How?
The new Model Y, internally referred to as Project E41, is designed to lower the entry price of Tesla’s popular SUV—one of the most compelling options on the market due to its size, range, and versatility, especially following the launch of the refreshed Model Y.
To achieve this, Tesla is reportedly aiming to reduce the Model Y’s total cost by nearly 20%, according to reports from China. While exact changes remain unknown, we can make informed guesses based on the cost-saving measures Tesla implemented in the scaled-down Model 3 for Mexico.
Textile Seats and Trim
One of the most noticeable changes in the cost-cut version of the Model 3 in Mexico was the removal of vegan leather throughout the interior. In its place, Tesla opted for a durable textile fabric for the seats, reducing material costs. Additionally, any Alcantara trim pieces were replaced with the same textile in various areas.
No Heated or Cooled Seats
Another major cost-cutting measure was the removal of heated and cooled seats, along with the heated steering wheel. While these feature reductions may seem minor, eliminating them reduces various things, such as electrical components, harnesses, and ductwork that are required for seat ventilation.
No Rear Screen
One of the more unexpected changes in the reduced-cost Model 3 was the removal of the rear screen, despite it being powered by the same front infotainment computer as the front display. Given that the screen functions primarily as an additional display rather than a standalone system, the cost to include it is extremely low. It’s one of those really smart additions Tesla has added that increases value for the consumer with minimal cost to Tesla.
Tesla is unlikely to redesign or modify the vehicle’s wiring harness for this change, meaning a rear screen could potentially be retrofitted later by the customer. Based on replacement part estimates, the screen likely costs Tesla between $5 and $20 per vehicle, which acts as a secondary monitor for the infotainment computer.
Ambient Lighting, Acoustic Glass, Speakers
The final set of changes also focuses on the interior. Tesla replaced the RGB-capable ambient lighting with a simpler white-only version—likely saving only a few dollars per vehicle. While this may seem like a minor and somewhat unexpected cut, it could serve as an upsell opportunity to the standard RWD variant.
Additionally, Tesla reduced the use of dual-pane acoustic glass, now limiting it to just the front windows and windshield. This change drastically cuts costs but also affects cabin noise levels. The dual-pane glass played a key role in making the refreshed Model Y noticeably quieter, so this downgrade will likely bring noise insulation closer to that of the original Model Y.
As for audio, Tesla scaled down the speaker system in the Mexican Model 3 from 17 speakers to just nine, while also removing the subwoofers and one of the audio amplifiers. While this cuts costs due to wiring and speakers, it also has a large impact on the audio quality in the vehicle.
Project E41 is Not the Next-Gen Model
It’s important to note that Project E41 is not the same as the upcoming, more affordable next-gen platform, which is internally referred to as Project Redwood. While Project E41 focuses on a reduced-cost version of the Model Y, Project Redwood is designed to test Tesla’s manufacturing capabilities, using their innovative unboxed assembly method to reduce both costs and production time. The goal is to create a vehicle that is smaller and more affordable, while also keeping it safe and capable of self-driving.
Tesla previously confirmed that they plan to unveil new models—distinct from cut-down versions of the Model 3 or Model Y—during their Q4 2024 Earnings Call. However, the executive team has been careful not to divulge too many details about the upcoming model during interviews. This suggests there may be a lot more that has yet to be unveiled.
The Cybertruck is something that’s completely out of this world—so much so that when people are unfamiliar with it, their first reaction is often, “What is that?”
And stepping inside only reinforces that impression. With its hidden-button doors and sleek, futuristic interior, the Cybertruck truly feels like something from another world. Recently, Tesla’s Chief Vehicle Designer, Franz von Holzhausen, revealed that an image shared by the official Cybertruck account on X is actually the original sketch that inspired its radical design.
Many Iterations
The Cybertruck has undergone numerous design iterations, and we’ve had the chance to explore some of Tesla’s earliest concepts for a truck that would define the future in many ways. These insights come from Walter Isaacson, who detailed them in his biography of Elon Musk.
Originally shared in 2023, the images revealed a dramatically different vision—one without the now-iconic angular rear sail. The design drew inspiration from various art forms, including video games, books, and movies—essentially, anywhere sci-fi had imagined a sleek, futuristic, or rugged truck.
The Nighthawk
The infamous F-117 Nighthawk.
Staff Sgt. Aaron Allmon II | http://www.defenselink.mil/
The design that ultimately made it to production wasn’t one of those early concepts. Instead, it was inspired by none other than the infamous American F-117 Nighthawk—a now-retired, single-seat stealth bomber developed by the secretive Skunk Works for the U.S. military. As the world’s first stealth aircraft, the F-117 revolutionized aviation with its groundbreaking design.
Much like the Cybertruck’s deluge of new technologies, the F-117 brought innovations that reshaped modern aircraft design. Its angular, faceted surfaces were engineered to deflect radar waves and reduce its infrared signature—features that directly influenced the Cybertruck’s distinctive geometry. When wrapped in black, the resemblance to the Nighthawk is undeniable.
Now, while we can’t say for sure if the Cybertruck is truly “stealthy”—since it turns heads wherever it goes—it does reflect radar waves. That said, don’t expect it to help you evade speed cameras or slip past the police unnoticed.
Super Stealthy
Not a Tesla App
The Nighthawk’s angular design also required advanced computerization—because, at first, no one believed it could even fly. Without its onboard computers to fine-tune the pilot’s inputs, it simply wouldn’t have. Similarly, the Cybertruck’s steer-by-wire system and rear-wheel steering give it an unexpected level of agility—especially for a massive stainless-steel vehicle that’s this fast.
The Cybertruck is truly one of a kind—there’s nothing else like it on the road today. Franz von Holzhausen delivered on Elon Musk’s vision of a truck from the future, and Tesla’s engineering team brought that vision to life in a way that few thought possible.
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