Tesla to delay US launch of cheaper electric car in major setback for Elon Musk: report

Core Viewpoint - Tesla's plans for an affordable version of the Model Y have been delayed, impacting its strategy to boost sales and market share in the electric vehicle sector [1][2][9]. Group 1: Production Plans - Tesla aims to produce a lower-cost version of the Model Y, internally codenamed E41, in the US, but the production launch has been postponed by several months [1][2]. - The company plans to manufacture 250,000 units of the cheaper Model Y in the US by 2026, with future production also expected in China and Europe [3][7]. - The E41 is projected to cost 20% less to produce than the refreshed Model Y, which currently retails for approximately $49,000 before tax credits [6][7]. Group 2: Market Context - The introduction of affordable vehicles is seen as crucial for Tesla to attract new customers and counteract declining sales and market share [6][9]. - Tesla reported its first annual decline in deliveries last year, and analysts predict further sales drops this year due to various challenges, including brand reputation issues linked to CEO Elon Musk [9][11]. - The automotive industry is facing rising prices and supply chain disruptions, exacerbated by tariffs imposed on imported vehicles and parts [12]. Group 3: Strategic Adjustments - Tesla has increased its North American sourcing for parts to mitigate tariff exposure for the E41, and has suspended plans to ship components from China for other models due to tariff concerns [13]. - Musk had previously promised a new, cheaper EV platform with vehicles priced as low as $25,000, but has shifted focus to robotaxi development instead [10].