Tesla Delays Launch of Cheaper, Stripped-Down Version of Model Y in US

Core Insights - Tesla has delayed the launch of its affordable Model Y in the U.S., originally planned for the first half of the year, with production now expected to start between Q3 and early next year [1][2] - The company aims to manufacture 250,000 units of the affordable Model Y by 2026, with production also planned in China and Europe [2] - The upcoming budget vehicles are seen as crucial for reversing declining sales and market share, with the current Model Y priced around $49,000 before tax credits [3] Production and Pricing - The E41 model is expected to be about 20% cheaper to produce than the refreshed Model Y, with a debut planned in China for 2026 [4] - Tesla has paused plans to ship parts for its Cybercab and Semi truck from China due to tariffs, increasing the use of North American parts [5] Sales Performance - Cybertruck sales have significantly dropped, with only 6,406 units sold in Q1 2025, down from 12,991 in Q4 2024, contributing to a 13% decline in overall vehicle sales [6][7] - To boost Cybertruck sales, Tesla is offering free lifetime charging for the Foundation Series model and has introduced a more affordable version priced at about $70,000 [8] Competitive Landscape - Rivian is expanding its lineup with budget models targeting cost-conscious buyers, while Ford is reintroducing affordable models like the base Bronco and increasing production of budget-friendly versions of its F-150 [9][10] Stock Performance - Tesla shares have declined by 40.2% year to date, underperforming both the Zacks Auto, Tires and Trucks sector and the Zacks Automotive - Domestic industry's declines of 28.5% and 37.1%, respectively [11]