San Francisco, United States
Tesla is expected to unveil a more affordable version of its best-selling Model Y SUV on Tuesday, as the electric vehicle (EV) maker attempts to reverse falling sales and waning market share amid fierce global competition.
Chief Executive Elon Musk has long promised mass-market vehicles, though Reuters first reported last year that plans to build an all-new $25,000 EV were canceled. The vehicle anticipated this week is an “affordable” version based on current manufacturing and design platforms.
Tesla fueled excitement among its fans by posting two cryptic video clips on X (formerly Twitter) over the weekend. One showed headlights emerging from the dark, and another displayed a spinning wheel followed by the date “10/7” (October 7).
In contrast to previous major launches, neither Tesla nor industry influencers have indicated that an in-person event is planned. Still, analysts, investors, and fans widely expect the company to make a significant announcement.
Key questions surrounding the launch include the car’s final price, its driving range, and the success of internal cost-reduction efforts. Late last year, Musk hinted the vehicle would be priced below the “$30,000 key threshold” including US EV tax credits.
The end of that credit effectively raised prices by $7,500 in the United States last month. While this helped boost quarterly sales to a record high, expectations are that sales will slow for the remainder of the year unless the affordable car can deliver a rapid boost.
Musk acknowledged the demand challenge during Tesla’s second-quarter earnings call in July: “The desire to buy the car is very high. (It’s) just (that) people don’t have enough money in the bank account to buy it. So the more affordable we can make the car, the better.”
While Musk initially promised production would begin by the end of June, Tesla only made “first builds” of the car in July, stating it would become available for customers sometime in the last three months of the year.
The company is already grappling with softening sales across its aging lineup as competition has surged, particularly in China and Europe, where Musk’s controversial political views have also reportedly eroded brand loyalty.
Affordable vehicles are also considered vital to Tesla’s operational goals, including the ambitious target of delivering 20 million vehicles over the next decade—a milestone tied to the company’s proposed $1 trillion pay package for Musk.
