New photos suggest that Tesla may be developing a compact version of the Model Y

Last month saw the release of an updated version of Tesla’s popular Model Y, which introduced a range of new styling and comfort features to the revamped model. However, recent sightings at Tesla’s Austin, Texas factory suggest that the company may be working on yet another model, with images emerging of a heavily camouflaged vehicle.

Drone footage captured by Joe Tegtmeyer, a Texas-based drone operator and Tesla enthusiast, shows a black Tesla model hidden under layers of camouflage, concealing both the front and rear of the car. The dashboard of the vehicle also seems to be covered, indicating significant changes to both the exterior and interior design.

One noticeable detail from the images is that the camouflaged model appears to be smaller than the standard Model Y, sparking speculation that it could be a more affordable upcoming model from Tesla. Reports indicate that this new model has been in development for the past year and has been referenced multiple times during the company’s earnings calls.

During the Q3 earnings report last year, Tesla hinted at the launch of new, more affordable vehicles in the first half of 2025. This was reiterated during the Q4 earnings call, with Tesla’s CFO, Vaibhav Taneja, confirming that the company is progressing well with the development of the new model, expected to be unveiled by June this year.

While specific details about the affordable model remain scarce, Tesla has hinted that it will leverage elements from both the next-generation platform and existing platforms, with production taking place on the same manufacturing lines as the current vehicle lineup. This approach aims to streamline manufacturing processes, reduce complexity, and lower costs, enabling Tesla to offer the new model at a more competitive price point compared to their existing Model 3 and Model Y electric vehicles.

The timing of this development is crucial for Tesla, as the brand experienced a dip in sales in 2024 after years of consistent growth. The introduction of a more affordable model is expected to reignite growth for Tesla’s vehicle business. A launch event for the new model, including pricing and specifications, is anticipated before mass production begins, likely in the second quarter of this year, with deliveries expected to commence in the latter half of 2025.