Tesla rolled out a new all‑wheel‑drive Model Y in the U.S., priced at $41,990. The variant sits above the cheaper rear‑wheel‑drive “Standard” version, which debuted in October at roughly $5,000 lower than earlier base models. The move follows a broader strategy to attract cost‑conscious buyers.

By trimming entry prices, Tesla offsets the loss of the $7,500 federal tax credit that ended last September. In the U.S., the “Standard” trims bring prices closer to pre‑incentive levels, easing the effective cost for buyers and helping the company stay competitive amid rising rivals.

Analysts warn that a larger share of lower‑priced vehicles could squeeze margins unless Tesla cuts manufacturing costs or boosts revenue from software and services. Meanwhile, CEO Elon Musk announced the discontinuation of the Model S and X sedans to free factory space for humanoid robots.

Investors will monitor how the new pricing strategy affects sales volume and profitability. If the Model Y AWD gains traction, it could pressure competitors to lower their own prices, reshaping the mid‑segment EV market and accelerating the shift toward more affordable electric vehicles.