Tesla CEO Elon Musk said the company’s long-anticipated affordable electric vehicle will share design similarities with the Model Y, marking a strategic shift to attract mass-market buyers as sales slow and margins tighten.

Speaking during Tesla’s second-quarter earnings call on Wednesday, Musk said the vehicle — expected to debut in the fourth quarter of 2025 — will be “just a Model Y,” teasing the announcement with his signature flair.

While Musk declined to provide technical specifics or pricing, Lars Moravy, Tesla’s vice president of vehicle engineering, confirmed the model is on track for a broad release by late next year. The model is widely seen as a cornerstone of Tesla’s strategy to revive demand amid rising competition in the global EV market.

“The biggest obstacle is people literally don’t have enough money in their bank account to buy [EVs],” Musk said. “Not a lack of desire, but a lack of ability. So, the more affordable we can make the car, the better.”

Musk also suggested that Tesla’s full self-driving software would enhance the car’s affordability through features that enable ride-sharing and driverless capabilities.

The announcement comes as Tesla posted a 12% year-over-year drop in second-quarter revenue to $25.5 billion. Net income fell to $3.2 billion, down from $3.9 billion a year earlier. Vehicle deliveries dropped 4.8% from the first quarter, reflecting softer global demand and inventory challenges.

As part of its refreshed product roadmap, Tesla recently introduced an upgraded Model 3 Performance and the Cybertruck Foundation Series. The Model 3 Performance includes a new adaptive suspension and improved track mode, while the Cybertruck continues to roll out to early reservation holders in the U.S., albeit at a slower pace than initially projected.