Tesla plans to leverage the insights gained from its next-generation mass-market vehicle platform to reduce production costs for the upcoming Model Y Juniper refresh. Initially designed to serve the production needs of the autonomous Robotaxi and the economically priced Model 2 Redwood, this new vehicle generation unboxed process was reprioritized to focus on launching the Cybercab service.
During Tesla’s last quarterly conference call, Elon Musk hinted at the announcement of a cheaper model next year. This has now been substantiated by sources from Tesla’s Chinese supply chain. The Tesla Model 2 is expected to be a compact version of the Model Y Juniper. The regular 5-seat Model Y Juniper is slated for release in the January quarter. Additionally, a 7-seat version is anticipated for Q4 of 2025, possibly targeting the Chinese market first.
The most compact version of the Model Y Juniper is scheduled for a 2026 launch, with an announcement planned for next year and production preparations beginning in Q3 of 2025. Unlike the smaller Model 3, the Model 2 has long been rumored to resemble a smaller Model Y. The supply chain sources confirmed that Tesla will use a “two-box” approach for manufacturing the Model 2, a nod to its modular “unboxed” process to minimize costs. This involves gigacasting the front and rear body sections separately, as is done with the Model Y and Cybertruck.
Earlier this year, reports indicated that Tesla had abandoned full-body gigacasting for the Robotaxi due to the desire to utilize existing equipment and facilities rather than making large capital investments in an unproven production method. Elements of the unboxed process that help reduce production costs will also be employed for assembling the different sizes of the Model Y Juniper in the current facilities, aiding in cost-cutting measures.
While it’s unclear if these efforts will lead to lower prices for the Model Y Juniper, the Model 2 is expected to debut as Tesla’s most affordable vehicle. Elon Musk noted that the compact Model Y Juniper would be “smaller, to be clear,” and may incorporate advanced technologies from the Cybertruck, such as the 48V low-voltage architecture.
The Model 2 could feature a 53 kWh battery pack, offering a range of approximately 250 miles due to its reduced weight. It might also use a new LFP battery chemistry, enabling 15-minute charging. Tesla could further reduce the Model 2’s price by making the next HW5 FSD suite optional.
With most details about the Model 2’s release date, specifications, and design falling into place, the price remains the main uncertainty. The car is rumored to cost between $22,000 and $25,000 before any subsidies.
