(Bloomberg) — Tesla () introduced a $37,990 version of the Model Y, making its best-selling vehicle more affordable to offset the loss of tax incentives for electric cars in the United States.
The starting price is about 15% cheaper than the base Model Y before this new option in Tesla’s lineup, according to the company’s website.
Tesla has been creating expectations for more affordable vehicles since the beginning of last year, when some investors and people close to the company were concerned about its decision to leave out a model in the US$25,000 range. Instead, Musk has prioritized efforts to develop autonomous driving technology and humanoid robots.
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Executives said on Tesla’s latest earnings call that although production of the more affordable model began in June, they decided to delay manufacturing until after federal tax credits of up to $7,500 were eliminated in the US. Chief Financial Officer Vaibhav Taneja warned that production will grow more slowly than initially anticipated.
Despite Tesla having a record quarter in vehicle deliveries, its global sales are down about 6% year-to-date. Demand for electric vehicles in its biggest market is expected to decline after US incentives end.
