Tesla introduces new Model Y variant in US priced at $41,990
Feb 2 (Reuters) – Electric vehicle maker Tesla introduced a new all-wheel-drive version of its best-selling Model Y SUV in the United States priced at $41,990, according to the company’s website on Monday.
The new AWD model sits above the cheaper rear-wheel drive “Standard” version.
The launch comes after Tesla introduced lower-priced “Standard” versions of the Model Y and Model 3 sedan in October, priced about $5,000 less than previous base models. These trims have become a key part of Tesla’s 2026 strategy, lowering entry prices to attract more cost-conscious buyers without waiting for a new mass-market vehicle.
In the US, Tesla’s “Standard” variants help offset higher effective acquisition costs by pushing prices closer to pre-federal stimulus levels.
In other markets, trims are cut by roughly $5,000; this was a more visible reduction aimed at increasing demand in an environment of increased competition.
The broader EV market has also cooled since September, when the Trump administration ended the $7,500 federal tax credit. Meanwhile, Tesla faces increasing global competition.
Analysts have warned that the share of lower-priced vehicles could put pressure on margins unless Tesla can offset that impact by lowering production costs or generating stronger revenue from software and services.
Separately, CEO Elon Musk said last week that the automaker would end production of its Model S and Model X sedans and instead use space at its California factory to make humanoid robots.
(Reporting by Ananya Palyekar and Akash Sriram in Bengaluru; Editing by Subhranshu Sahu and Sherry Jacob-Phillips)
