Tesla posted a short video online on October 5. It is nine seconds long. The video shows a spinning metal object with the Tesla logo. At the end, the screen reads “10/7.” No further clues were given, but people think Tesla will announce something important on October 7.
— Tesla (@Tesla) October 5, 2025
Tesla’s teaser comes right after the U.S. $7,500 electric vehicle tax credit ended on September 30. Tesla delivered nearly half a million cars in the third quarter of 2025. With the tax credit gone, experts say Tesla might reveal a cheaper car to help keep sales high.
Rumors around cheaper Model Y
Most talk centers on a new, cheaper Model Y. This model is called “E41” inside Tesla and may be sold as the “Model Y Standard.” A test car was seen near Tesla’s Texas factory on October 2. It looked different from regular Model Ys. The headlights looked simpler, and there was no glass roof. The front end was redesigned.
People found clues in Tesla’s website code. The code mentioned “Model Y Standard” with a price tag of $39,990. It listed fewer features, like textile inside instead of leather, no rear touchscreen, and manual steering. No HEPA filter is included. CEO Elon Musk said in the last earnings call that everyone will be able to buy the affordable Model Y in the last quarter of 2025. The teaser matches this timing.
Roadster theory gains attention
Some think Tesla may announce the new Roadster instead. Earlier this year, Musk said Tesla will do its biggest demo ever by the end of 2025. He talked about new Roadster technology. Some viewers think the spinning object hints at the Roadster’s “SpaceX package.” This package would use cold-gas thrusters for fast speed and maybe even let the car hover. Tesla filed a patent for “Adaptive Vehicle Aerodynamics for Downforce.” The patent talks about fan-powered suction to increase grip, which matches the teaser.
However, Tesla faces stronger competition from other carmakers, especially in China. Its share of the battery-only EV market in China dropped from 11.7% to 10.4% in the last year. Without the tax credit, the Model Y RWD now costs $44,990 in the U.S., which many families can’t afford. Experts say Tesla must offer a sub-$40,000 model to win back customers and compete with rivals like the Nissan Leaf S ($28,140) and Fiat 500e ($32,500).
How Tesla is cutting costs
Tesla worked to lower costs by removing features. The affordable Model Y won’t have a full-width light bar, will use cloth wheels instead of premium wheels, and will skip the glass roof. The inside will have textile seats and manual steering. There is no rear touchscreen or advanced sound system. The battery will likely be a smaller 62.5kWh LFP model. Air vents are manual, and there’s no HEPA filter.
If Tesla launches a cheaper Model Y, it could change the market for entry-level electric cars. Tesla is aiming to build about 250,000 units a year by 2026. Analysts at Wedbush Securities still rate Tesla stock as “Outperform” with a $600 price target. They call the last quarter a “massive bounceback.” They think Tesla’s plans for AI and robotics could push its value to $2-3 trillion by 2027.
Tesla’s stock price is up 6% so far in 2025. The company now faces new challenges as it tries to grow without help from federal subsidies. The success of a cheaper EV will play a key role. Musk has said, “the primary barrier to Model Y adoption isn’t lack of desire but insufficient purchasing power among potential customers.” On October 7, Tesla may finally address this problem. The announcement could show Tesla shifting from high-end cars to more affordable choices. Tesla’s short video turned many heads and set off a worldwide conversation about the future of low-cost electric cars.
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