Tesla CEO, Elon Musk, recently announced that the six-seat Model Y variant, which was introduced in China, may not be produced for the US market. This decision is based on the anticipated dominance of self-driving cars, as reported by Reuters.
The Model Y L, manufactured at Tesla’s Shanghai facility in China, features a longer wheelbase and a three-row seating arrangement. Priced at around $47,200, it faces stiff competition in China from local electric vehicle manufacturers like BYD and Xiaomi.
While traditional gasoline-powered SUVs with three rows of seats have been popular among families in the US, the production of profitable three-row electric vehicles presents a challenge for carmakers. Policy shifts introduced by the Trump administration are also expected to increase the cost of EVs, prompting manufacturers to focus on smaller and more affordable models.
Tesla is also planning to launch a more budget-friendly version of the Model Y with fewer premium features later in 2025. This model, referred to by Musk as “just a Model Y,” aims to cater to a wider market segment.
The company’s strategy in the US is shifting towards its robotaxi project. Tesla recently launched a limited robotaxi service in Austin and aims to expand it to cover half of the US population by the end of the year. With a focus on autonomous vehicles, Tesla secured a license to operate its robotaxi service in Texas, aligning with the state’s new regulations.
Musk has emphasized that in a future dominated by autonomous vehicles, the production of conventional cars would become obsolete. Tesla is set to start manufacturing the Cybercab, a bespoke two-seater robotaxi without a steering wheel or pedals, in 2026.
In other news, Tesla has announced significant cuts to the monthly lease rates for its electric vehicles in the UK, making them more affordable than before. However, the company experienced a 60% decline in UK sales in July, amidst an overall market contraction of 5%.
For the second quarter of 2025, Tesla reported a 12% year-on-year reduction in total revenue, with earnings dropping to $22.49 billion from $25.5 billion in the previous year’s corresponding period.
Overall, Tesla’s strategic shifts towards autonomous vehicles and affordable EV models reflect the company’s commitment to innovation and adaptation in a rapidly evolving automotive industry landscape.
