Feb 2 (Reuters) – Electric-vehicle maker Tesla has introduced a new all-wheel drive variant of its bestselling 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 follows Tesla’s October rollout of lower-priced “Standard” versions of the Model Y and Model 3 sedan, priced about $5,000 below the 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 U.S., Tesla’s “Standard” variants bring prices closer to pre-federal incentive levels, helping offset higher effective purchase costs.
In other markets, the trims cut roughly $5,000, a more visible reduction aimed at boosting demand amid heightened competition.
The broader EV market has also cooled since September, when the Trump administration ended the $7,500 federal tax credits. Tesla, meanwhile, is facing intensifying global competition.
Analysts have warned that a greater share of lower-priced vehicles could keep pressure on margins unless Tesla can offset the impact through reduced manufacturing costs or stronger revenue from software and services.
Separately, CEO Elon Musk said last week that the carmaker would end production for its Model S and Model X sedans, and instead use the space in its California factory to make humanoid robots.
(Reporting by Ananya Palyekar and Akash Sriram in Bengaluru; Editing by Subhranshu Sahu and Sherry Jacob-Phillips)
