Tesla (TSLA, Financial) has postponed the production of its low-cost Model Y, originally scheduled for the first half of this year, to between the third quarter and early next year. This delay affects Tesla's plan to introduce a more affordable electric vehicle in the U.S. market. The low-cost Model Y, internally known as E41, aims to reduce production costs by 20% compared to the current Model Y, which is priced at approximately $49,000, excluding a $7,500 tax credit.
Tesla's goal is to manufacture 250,000 units of the cheaper Model Y in the U.S. by 2026. However, the company faces challenges such as potential price hikes and supply chain disruptions due to tariffs on automotive imports. Tesla has increased the proportion of North American parts in its vehicles to mitigate tariff impacts on the E41 model, but it still encounters significant challenges.
Additionally, Tesla reported a decline in deliveries for the first time in its history, with analysts forecasting further decreases this year. Contributing factors include brand reputation issues linked to CEO Elon Musk's political associations and an aging product lineup lacking affordable models. Tesla is set to release its quarterly earnings soon, with new model plans being a key focus for investors.
