The first major update of Tesla’s best-selling product line, the Model Y, has officially gone on sale. Known internally by its codename, Juniper, it’s also being offered in a newer, cheaper form, with a base rear-wheel-drive package dropping to $37,490 after factoring in federal tax credits. Whether that will reverse declining Tesla sales, hurt by widespread protests against CEO Elon Musk’s role in the Trump administration, remains to be seen. More from Headlight.News.
The Model Y has gotten its first major update since launching in 2020.
Tesla faces a number of tests in the months ahead as it struggles to reverse a sharp plunge in sales triggered by worldwide protests against CEO Elon Musk. Among other things, the company plans to launch its self-driving Cybercab over the summer.
A more immediate challenge comes with the launch of the updated Tesla Model Y, marking the first major update of the brand’s best-selling product line since it went into production in January 2020.
While the entire Model Y line-up has been refreshed, the spotlight is on a new, more affordable version of the electric crossover. While it features a 357-mile battery pack, the new version is equipped with just a single motor driving the rear wheels. It carries an MSRP of $44,990 – which drops to $37,490 for those who qualify for federal EV tax credits.
Moving into the mainstream
A single, cross-car light bar distinguishes the back end of all versions of the updated Model Y.
Tesla sales have taken a major hit worldwide over the past year, a situation that has worsened since CEO Musk signed on as head of the Trump administration’s Department of Government Efficiency. Demand in the U.S. has fallen more than 10% during the first quarter, with European sales off about 50%. For the first time in a decade, Tesla holds less than a 50% share of the California market, the biggest in the U.S..
But there are other factors at work. There’s plenty of new competition from brands like Chevrolet, Hyundai, Kia and Subaru. And while the average EV cost nearly $60,000 last year, according to industry data, more and more of the new products are targeting affordable segments. The base version of the Chevy Equinox comes in at under $30,000 after factoring in federal tax credits.
While Tesla has yet to reveal a long-promised product line that would also come in under $30,000, the rear-wheel-drive Model Y brings it a big step closer. By comparison, the Long-Range All-Wheel-Drive package starts at $48,990 before factoring in federal tax credits. Even with them it remains above $41,000 for the 2025 model year.
The base Model Y is available with Tesla’s Full Self-Driving technology.
What’s new
The rear-drive Model Y does make sacrifices, starting with the loss of a front motor. It remains to be seen if the lack of all-wheel-drive hurts demand in snowier parts of the country where many brands have found AWD an essential customer demand.
The new package also is slower – though, like most modern EVs, it remains quicker than comparable gas-powered products. It can hit 60 in about 5.4 seconds.
And there have been other changes made to the interior and other features to help hold down costs.
Updates to the Model Y line include narrow panel gaps and revisions to reduce wind and road noise.
As with the rest of the updated Model Y line-up, though, the RWD package does get some potentially welcome updates. That includes tighter body panel gaps, and steps meant to reduce road noise. It gets the newer, sleeker front fascia and a single, cross-car lighting design in the rear.
The base Model Y offers Tesla’s Full Self-Driving system, as do more expensive versions of the EV.
The new version of the Model Y is now available for order and deliveries are set to begin in the coming weeks.
More Tesla News
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- Prices Plunge as Owners Rush to Sell Off Their Teslas
More affordable model(s) to come?
Tesla was reportedly working on a product widely referred to as the “Model 2,” based on an entirely new EV platform.
While the rear-drive Model Y is now Tesla’s most affordable product, it may not have that distinction for long. Tesla has had an on-again/off-again program aimed at getting below $30,000 for a number of years. It now appears to not only be on-again but ready to make a debut this year.
During an earnings conference call earlier in May, Tesla’s vice president for vehicle engineering, Lars Moravy said “Given economic uncertainty resulting from changing trade policy, more affordable options are as critical as ever.”
Significantly, during his comments, Moravy used the word “models,” plural, several times, at one point saying, “the models that come out in the next months will be built on our lines and will resemble in form and shape, the cars we currently make.” That isn’t believed to have been a slip of the tongue.
Still plenty of challenges for Tesla
The interior of the updated Model Y.
Tesla is clearly hoping the more affordable Model Y will lure in new customers, even with many of the company’s showrooms being targeted by regular protests by Musk’s foes.
That possibility appears to be one of the factors that has helped Tesla rebuild some momentum for its stock price which cratered in the past month to a low of barely $220 a share. It opened at $279.63 on Friday morning. Investors have also been buoyed by Musk’s promise to shift focus away from Washington and back to Texas-based Tesla.
But the share price is still more than $200 below last December’s 52-week high o $488.54, and most key analysts have sharply downgraded their forecasts since the beginning of this year. It hasn’t helped that a number of key investors have sharply criticized Musk and, in some cases, sold off their Tesla holdings. Pennsylvania’s Lehigh County Pension Board, which oversees $593 million in assets, this week voted to halt new investments in Tesla.
Even taking the controversy surrounding Musk out of the picture, investors are waiting to see how all the new products promised for 2025 will work out. The automaker has a long history of falling way behind schedule. That would be particularly embarrassing, several analysts have warned, if the CyberCab doesn’t arrive on time or, worse, falls short of expectations.
Meanwhile, there are questions about one existing product line, in particular. Some are asking whether Tesla will continue to roll out the much-maligned Cybertruck considering its sales are a small fraction of what was originally expected. Adding to the electric pickup’s woes: a devastatingly harsh review by influential Consumer Reports magazine.
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