Tesla delays launch of its affordable EV: Here's why
What's the story
Tesla has reportedly delayed the launch of its affordable EV in the United States.
The model, internally referred to as E41, is expected to be a stripped-down version of the popular Model Y.
US production for this lower-cost Model Y was originally scheduled for early 2025 but is now expected to kick off several months later than initially planned, Reuters reported.
The delay comes amid Tesla's broader strategy to address declining sales and increased competition in the electric vehicle market.
Production goals
Tesla aims to produce 250,000 units by 2026
This new EV model aims to be approximately 20% cheaper to produce than the current Model Y, which starts at around $49,000 before tax credits.
Despite the delay in production, Tesla still hopes to manufacture a total of 250,000 units of the car by 2026.
This production target is in line with Tesla's reduced capacity at its Gigafactory Texas and Fremont factory.
In addition to the Model Y, Tesla is reportedly developing a no-frills version of the Model 3 sedan.
Strategy change
Tesla's strategy shift: Focusing on existing production lines
Tesla CEO Elon Musk has already scrapped plans to produce a new $25,000 electric vehicle based on the next-generation "unboxed" platform.
Instead, the company will now shift focus to its upcoming Robotaxi, which will use the latest advanced technology.
While Tesla still aims to offer more affordable EVs, these will be built on the current Model Y platform and are expected to cost more than the previously promised entry-level model.