WEBDESK: Tesla has postponed the launch of its new affordable electric vehicle in the U.S., causing concerns among buyers and investors. Originally expected to begin production in early 2025, Tesla now plans to start making the vehicle by the end of 2025 or early 2026.
The stripped-down version is expected to cost significantly less and be simpler in design compared to the current Model Y, which starts at around $49,000 before federal incentives.
The delayed model, a lower-cost version of the popular Model Y SUV, internally code-named E41, was originally expected to begin production in the first half of 2025.
However, the launch is now unlikely before late 2025 or early 2026.
Although the company has not officially explained the reason for the delay, industry experts believe that slowing sales, strong competition, and rising global costs could be key factors. The electric vehicle market is becoming more competitive, and Tesla is under pressure to maintain its lead.
The company still plans to build around 250,000 units of this affordable EV in the U.S. and later expand production to China and Europe. In addition, Tesla is said to be working on a budget-friendly version of its Model 3 sedan, though there is no timeline for that release yet.
The delay comes at a time when Tesla is navigating slowing sales, intensifying global EV competition, and increasing pressure from the Trump administration’s renewed tariff regime.
Recent US trade policies have introduced broad new tariffs on Chinese-made EVs and components, adding financial strain to automakers dependent on global supply chains.
Tesla reported its first annual drop in vehicle deliveries in 2024, and analysts forecast further declines, citing aging vehicle designs and reputational risks tied to CEO Elon Musk’s political affiliations.
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