Tesla has postponed the launch of its more affordable version of the Model Y electric SUV in the United States, according to sources familiar with the matter. The lower-cost Model Y, internally designated as E41, was initially slated for production in the first half of the year. However, the start of U.S. manufacturing has been pushed back to a timeframe ranging from the third quarter of this year to early next year.
The specific reasons for the delay were not disclosed by the sources. Despite the setback, Tesla aims to produce approximately 250,000 units of the affordable Model Y in the United States by 2026. Plans are also in place to extend production of the E41 to China and Europe, although the exact timeline for the European rollout remains uncertain. In China, the E41 is expected to launch in 2026 and will be produced at a cost 20% lower than the refreshed Model Y.
The introduction of the lower-cost Model Y is part of Tesla’s broader strategy to offer more accessible electric vehicles (EVs) and potentially boost sales, which have been declining recently. The company’s upcoming financial report, scheduled for Tuesday, will highlight these new vehicle plans, which are closely watched by investors and fans anticipating a reversal in Tesla’s recent sales downturn and market share erosion.
Additionally, Tesla has updated the original Model Y with new exterior and interior features. The Long Range All-Wheel Drive variant in the United States is priced at approximately $49,000 before applying a $7,500 federal tax credit. Alongside the Model Y, Tesla is also developing a stripped-down version of the Model 3 compact sedan.
Tesla has faced several challenges, including declining annual deliveries last year and expectations of further sales decreases this year. Factors contributing to these challenges include potential damage to the brand’s reputation due to CEO Elon Musk’s political activities and the aging of Tesla’s current vehicle lineup. The company had previously promised a $25,000 EV platform but shifted focus to robotaxi development, leaving a gap in its portfolio for more affordable models.
In response to increasing tariffs on imported vehicle parts, Tesla has been increasing its sourcing of components within North America. Additionally, the company has recently halted some shipments of parts from China to the United States to mitigate tariff-related costs.
Tesla has not provided an immediate comment regarding the delay in production, the revised targets, or other specific details related to the lower-cost Model Y.
Source: Reuters
