Electric vehicle maker Tesla is delaying the launch of its U.S.-made affordable car for at least several months according to a newest report by Reuters.
Tesla initially planned to produce a brand new model that would cost $25,000 before changing course in order to focus on the development of robotaxis. Instead, the carmaker decided to offer a “stripped-down” version of its popular Model Y that was slated to start production in the first half of 2025. This affordable model would be smaller and come with fewer features while being 20% cheaper to produce compared to the original.
Tesla still plans to produce 250,000 units of cheaper Model Y in the United States in 2026. However, the start of production will come at least a few months later than the company envisioned. The reasons for the delay remain undisclosed.
The EV giant reportedly also plans to produce the lower-cost Model Y in China and Europe while working on a cheaper version of Model 3 that will launch at a later date.
The decision to introduce affordable models is part of Tesla’s strategy to address the slumping sales that the company faced in early 2025. It previously reported a 13% drop in sales for the first three months of the year, marking its worst quarter since 2022. Tesla’s stock has taken a hit as a result, being 36.36% down year-to-date.