Elon Musk's Headaches Grow as Tesla Pushes Back Plans for Affordable Electric Vehicles

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Tesla apparently postponed the development schedule for an affordable variant of the Model Y.

Sources who spoke to Reuters did not specify exactly when electric vehicle (EV) buyers might have to wait for a more budget-friendly Tesla, stating it will be “months behind Tesla’s announced timeline.” Nonetheless, Tesla remains committed to producing around 250,000 units of the new Model Y (code-named E41) in the U.S. by 2026. planning to start production In China and Europe at a later time.

According to Reuters, a "no-frills version" of the Model 3 is also scheduled for release; however, they did not specify exactly how much less expensive these vehicles will be. Currently, the starting prices for the Model Y and Model 3 stand at $50,630 and $44,130, correspondingly, prior to factoring in additional elements such as incentives or taxes. tax credits .

Tesla has considered introducing more affordable electric vehicles. In April 2024, Reuters reported this information. reported the automaker has abandoned the idea of producing an electric vehicle priced at $25,000 to concentrate on its autonomous taxi services. When this was reported, CEO Elon Musk refuted it. charged the media outlet with falsehoods . By November, however, he largely did confirmed the story During an earnings call, they stated that introducing a $25,000 Tesla is "unnecessary" since "the future belongs to autonomous vehicles."

Nevertheless, Tesla is grappling with underwhelming sales both within the US and internationally. The company has noted this issue in their reports. first yearly sales decline More than ten years into the first quarter of 2025, there was however merely a 1% decline. This pertains to an electric vehicle manufacturer. delivered 336,681 vehicles In Quarter 1, it decreased by 13% compared to Quarter 1 of 2024 and by more than 20% when compared to Quarter 1 of 2023. It’s also encountering hefty tariffs .

Sales in the US were relatively robust when compared to those in Europe. Sales in Germany have reportedly dropped 62% , amid Musk pledging support to the right-wing German party AfD in the run-up to their recent election.

In the U.S., Musk's collaboration with Trump along with his involvement with DOGE have resulted in vandalism Competing electric vehicle manufacturers such as Lucid and Polestar have been swift to respond. offer Tesla drivers Discounts for turning in their Teslas.