Tesla to Release Affordable Model Y Variant to Boost Sales
Tesla is gearing up to launch a more affordable variant of its popular Model Y SUV in an effort to combat a recent decline in sales. With one of its worst quarterly sales drops on record, the electric car manufacturer is looking to expand its customer base by offering a stripped-down version of the Model Y.
Elon Musk, CEO of Tesla, announced plans to introduce a range of “more affordable models” by the summer, with production expected to start around August or September. While specifics on pricing and target markets have not been disclosed, the current cheapest Model Y starts at £51,990.
The decision to introduce a budget-friendly model comes as Tesla faces challenges in the US market, where government grants for electric cars are set to be phased out. President Donald Trump’s rollback of emission mandates has impacted sales of electric vehicles, making it crucial for Tesla to offer a lower-cost option to attract customers.
In the second quarter of 2025, Tesla reported a 16% decrease in income, attributed to lower sales, reduced average selling prices, and increased operating expenses. The company also saw a significant drop in revenue from electric car credits, as other manufacturers no longer need to purchase credits to meet emission targets.
With the US government easing regulations on electric vehicles, Tesla is bracing for a challenging period ahead. Musk acknowledged that the company may face “a few rough quarters” as it navigates changing market dynamics.
Despite the setbacks, Tesla remains committed to expanding its product lineup and reaching a wider audience with more affordable models. The introduction of a budget-friendly Model Y variant is just the beginning of Tesla’s efforts to drive sales and stay competitive in the evolving electric car market.
