Tesla’s plans to produce an affordable car include a US-made version of its long-awaited Model Y, Reuters reported, citing people familiar with the matter. However, the production launch appears to have been postponed.
Tesla had promised to launch affordable cars starting in the first half of the year, potentially boosting sales that have been slumping compared to previous years.
Global production of the lower-cost Model Y, known internally as the E41, is expected to begin in the United States, according to Reuters. According to its sources, this will occur at least a few months later than planned in Tesla’s overall plan.
The reason for the delay is not yet clear. Tesla had been aiming to produce 250,000 of the cheaper Model Y in the United States by 2026. Production of the new car is also planned in China and Europe, according to the same source.
Tesla fans and investors have been eagerly awaiting the launch of the lower-cost, mass-market vehicles, hoping they will attract a new group of customers and reverse the electric vehicle manufacturer’s declining sales and eroding market share.
Tesla also revamped the original Model Y with exterior and interior changes, and the long-range, all-wheel-drive version is priced at around $49,000 in the United States.
Automakers face the prospect of higher prices and supply chain disruptions after Trump imposed a 25% tariff on vehicles and auto parts imported from outside the United States.
Tesla is considered one of the least affected automakers by the new tariffs because its suppliers are located in the United States, meaning it does not import parts from abroad.
Vehicles destined for China and Europe are manufactured outside the United States.
