Affordable Tesla EV launch in the US faces delays
The long-awaited launch of Tesla's more affordable electric vehicle in the United States is facing more delays. Customers who were hoping to snag a cheaper Tesla this year will have to practice their patience for at least several more months, according to recent reports. This new EV is widely understood to be a simplified version of the popular Model Y.
Last year, Tesla's CEO, Elon Musk, adjusted the company's strategy. He decided to shift focus away from developing an entirely new, lower-priced $25,000 EV on a next-generation platform. Instead, the automaker opted to produce more budget-friendly electric cars based on the existing architecture of the Model Y.
These upcoming vehicles are expected to be "stripped-down Model Ys," featuring fewer amenities and less expensive materials. Tesla initially announced that these cost-effective EVs would become available in the first half of 2025. Sources now indicate that the US launch of this lower-cost Model Y, internally known as E41, will be delayed by at least several months.
Revised timelines suggest a potential release between the third quarter of this year and early next year. The report also indicates Tesla's goal to manufacture 250,000 units of this new model in the US by 2026, aligning with the current production capacity of their Gigafactory Texas and Fremont facilities.
Similar reports originating from China have also described Tesla's upcoming affordable EVs as simplified versions of the Model Y. These reports draw parallels to a recent version of the Model 3 launched by Tesla in Mexico. The Mexican Model 3 keeps its core features but skips elements like the rear-seat screen and ambient lighting, and it uses fabric upholstery instead of Tesla's customary vegan leather.
The latest reports suggest that Tesla intends to follow the stripped-down Model Y with a similar, more basic version of the Model 3. The launch of this more affordable Model 3 in China was initially anticipated in the latter half of 2025, with Tesla reportedly waiting to assess the market response to the updated Model Y.
The move by Tesla to produce more affordable EVs on existing platforms could allow the company to operate its factories more efficiently. At the same time, it also raises the possibility of these new models competing with Tesla's current Model 3 and Model Y offerings, potentially impacting the company's profit margins.
Elon Musk has previously suggested that increasing the number of Tesla vehicles on the road will ultimately benefit the company through future sales of its "Full Self-Driving" (FSD) software package. Despite this long-held belief, the FSD system still requires driver supervision and has seen limited customer adoption due to its $8,000 price tag.
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