Tesla (TSLA.O) is preparing to launch a more affordable version of its popular Model Y SUV on Tuesday. The move is part of the electric vehicle maker’s effort to revive declining sales and regain shrinking market share amid growing global competition.
CEO Elon Musk has long promised to make affordable electric cars accessible to the masses. However, he canceled plans for a new $25,000 EV last year. According to reports, the upcoming model will be an “affordable” version based on Tesla’s existing design and production platforms.
- Affordable Model Strategy
• Tesla is planning to introduce a more accessible version of its most popular Model Y SUV, aiming to boost its declining sales.
• The new model is expected to be priced under $30,000 (after potential tax credits), making it more affordable for a wider range of customers.
• This move aligns with Elon Musk’s long-standing promise to offer a “mass-market” EV — even though he had canceled the $25,000 model plan last year.
- Pressure from Growing Competition
• Tesla is facing intense competition in key markets such as China and Europe, where its market share has been falling.
• An affordable electric car could be a crucial way to challenge the cheaper alternatives offered by rivals.
- Production Timeline and Sales Impact
• Production of this model was expected to begin by the end of June, but so far, only “first builds” have been completed.
• Customer deliveries are expected to start in the final quarter of 2025.
• Musk stated that demand for this car is very high, but many potential buyers are unable to purchase it due to current pricing.
- Strategic Shift Toward Long-Term Goals
• The launch is part of Tesla’s long-term plan to deliver 20 million vehicles annually within the next 10 years.
• This ambitious goal is linked to Elon Musk’s $1 trillion compensation package, which is tied to several key operational milestones for the company.
- Absence of a Traditional Launch Event
• Unlike Tesla’s previous major product unveilings, no large in-person launch event has been announced this time.
• This has sparked widespread speculation among experts and fans about how Tesla plans to reveal its new offering to the public.