TESLA LAUNCHES AFFORDABLE NEW MODEL Y TO COUNTER GROWING RIVALRY

Wed 08 October 2025:

Tesla introduced more budget-friendly versions of its popular Model Y SUV and Model 3 sedan, priced at $39,990 and $36,990 respectively, in a bid to boost declining sales and regain market share amidst growing competition. The electric vehicle company unveiled the new models on Tuesday.

Tesla had posted two clips on X over the weekend, igniting excitement among fans. One video shows headlights peering out of the dark and another shows what looks like a wheel spinning for a few seconds, followed by “10/7” — the US format for the date October 7.

Musk initially promised that production of the vehicle would start by the end of June. But Tesla only made what it called “first builds” of the car, it said in July, adding that it would be available for customers sometime in the last three months of the year.

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“The desire to buy the car is very high. [It is just that] people don’t have enough money in the bank account to buy it,” Musk said in July during Tesla’s second-quarter earnings call. “So the more affordable we can make the car, the better.”

Tesla has already been grappling with slowing sales of its ageing lineup as competition has grown rapidly, especially in China and Europe, where Musk’s far-right political views have also undermined brand loyalty.

Earlier this year, Tesla launched a refreshed version of the Model Y with improvements including new light bars and a rear touchscreen.

In the United States, prices effectively rose by $7,500 at the end of last month, when the EV tax credit ended. That helped goose quarterly sales to a record, but expectations are that they will slow down for the rest of the year, unless the affordable car comes to the rescue.

Markets are not responding well to the new product, which analysts say is a result of the price point.

“We believe the launch of a lower cost model represents the first step to getting back to a ~500k quarterly delivery run-rate which will be important to stimulate demand for its fleet with the EV tax credit expiring at the end of September, but we are relatively disappointed with this launch as the price point is only $5k lower than prior Model 3’s and Y’s,” Dan Ives, analyst at Wedbush Securities, said in a note provided to Al Jazeera.

SOURCE: INDEPENDENT PRESS AND NEWS AGENCIES

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