Tesla Unveils Cheaper Version of Model Y
Pricing at $37,900 to Offset Loss of $7,500 Federal Tax Credit on EVs
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Tesla Inc. introduced a $37,990 version of the Model Y, making its top-selling vehicle more affordable to counteract the loss of U.S. incentives for electric cars.
The starting price is roughly 15% cheaper than the base Model Y prior to this addition to Tesla’s lineup, according to the company’s website.
Tesla has been building anticipation for more affordable vehicles since early last year, when some investors and company insiders were alarmed by CEO Elon Musk’s decision to de-emphasize a roughly $25,000 model. The CEO has instead prioritized efforts to develop self-driving technology and humanoid robots.
Executives said during Tesla’s most recent earnings call that while the company started building a more affordable model in June, they opted to put off production until after the U.S. phased out up to $7,500 federal tax credits. Chief Financial Officer Vaibhav Taneja cautioned that output will ramp up slower than initially anticipated.
While Tesla is coming off a record quarter of vehicle deliveries, its global sales have fallen around 6% year-to-date. Demand for EVs in its largest market is expected to drop off after the U.S. eliminated incentives.
Analysts at BloombergNEF expect US sales of battery-electric and plug-in hybrid models to drop to around 332,000 vehicles in the final three months of the year, from almost 500,000 units in the third quarter.
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