Tesla launches lower-cost Model Y variant amid declining sales

Tesla has introduced a more affordable version of its Model Y electric SUV in the United States, offering a long range rear-wheel drive variant priced at $44,990 before incentives.

After applying the $7,500 federal tax credit, the cost comes down to $37,490, according to the company’s website.

The existing long range all-wheel drive Model Y remains unchanged at $48,990. The new variant provides a lower entry point for customers as Tesla navigates a challenging sales environment.

The launch comes shortly after Tesla reported a 13% drop in quarterly deliveries—its steepest decline in nearly three years—amid growing global competition and a backlash linked to CEO Elon Musk’s public behavior and political commentary.

Tesla is expected to release its second-quarter earnings in July.