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Tesla’s Sales Are Plummeting, so It’s Adding a Cheaper All-Wheel-Drive Model Y in the US in a Bid to Drum up Interest

Tesla's new Model Y trim offers a lower-cost all-wheel-drive option as the company phases out the Model X and broadens its SUV lineup in the U.S. market.

  • This week, Tesla launched a new Model Y configuration, expanding the lineup with a more affordable all-wheel-drive trim.
  • Facing lagging demand, Tesla cut its Model S and Model X legacy models after total sales fell nearly 23% last year while pivoting toward robotics.
  • The Model Y Standard AWD starts at $41,990 and returns 294 miles of EPA-estimated range, adding a second motor for AWD and hitting 60 mph in 4.6 seconds.
  • The cheaper AWD trim immediately saves buyers about $7,000 compared with the Model Y Premium AWD and may entice prospective Model Y customers seeking dual-motor traction without Premium costs.
  • However, expanding trims risks increasing complexity even as some U.S. buyers want larger SUVs, and Tesla may still offer a Model Y L late this year amid BMW, Volvo, and Mercedes-Benz rivals arriving in coming months.
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arenaev.com broke the news in on Wednesday, February 4, 2026.
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