Lower entry prices and new variants signal Tesla’s push to defend demand in a tougher EV market.

New York, 3 February 2026 – Tesla has introduced a new all-wheel drive version of its bestselling Model Y SUV in the United States, priced at $41,990, according to information on the company’s website. The new variant sits above the more affordable rear-wheel drive Standard version, giving buyers another choice between price and performance.

The launch builds on Tesla’s earlier move to roll out lower-priced Standard versions of the Model Y and Model 3. These trims, introduced late last year, were priced about $5,000 below the previous base models. In simple terms, Tesla is making its cars more affordable without waiting to launch a completely new mass-market vehicle.

In the U.S., the Standard trims help bring vehicle prices closer to levels buyers were used to before federal incentives ended, easing the impact of higher out-of-pocket costs. In international markets, the roughly $5,000 price cut is more noticeable and is aimed at supporting demand as competition in the electric vehicle space continues to increase.

The broader EV market has cooled in recent months, with slower demand growth and more rivals offering competitive pricing and features. Tesla, while still a market leader, is not immune to these pressures. Industry analysts note that selling a higher share of lower-priced vehicles could weigh on profit margins unless the company can offset this through lower manufacturing costs or stronger revenue from software and services.

In a separate development, Tesla chief executive Elon Musk said last week that the company plans to end production of its Model S and Model X vehicles. The manufacturing space at Tesla’s California facility is expected to be repurposed for producing humanoid robots, highlighting the company’s growing focus on automation and robotics alongside electric vehicles.

Together, the new Model Y variant and pricing strategy show how Tesla is adjusting its product mix to stay competitive in a changing global EV landscape, balancing affordability, innovation, and long-term growth.