Tesla Launches Model Y, Offers Discounts Amid Crisis Year
The Model Y is crucial to Tesla's business, accounting for two-thirds of its deliveries, and the company's failure to replace its aging models with new ones has left it vulnerable to competition from other EV manufacturers, making the success of the Model Y and the company's AI strategy essential to its future.
Tesla has launched the Model Y Long Range RWD in the US, priced at $44,990, with a range of 357 miles and a 0-60 mph acceleration time of 5.4 seconds, as the company offers discounts on its best-selling model amid a significant crisis.
The new entry-level Model Y follows the design refresh earlier this year, with the RWD version being cheaper than the AWD version, which starts at $49,000, but having a shorter range and slower acceleration. Deliveries are expected to start in the US within 3-5 weeks, and the company has already launched the Model Y RWD in Europe and offers a Standard Range RWD in Europe and China for even cheaper.
Tesla is offering a 1.99% financing rate on a six-year loan for the $48,990 long-range, all-wheel-drive Model Y, a significant discount from the 6% rate offered on some of its upscale models. This move comes as CEO Elon Musk faces his biggest crisis yet, with the company's European sales plummeting in April due to Musk's support for the Trump administration's approach to streamlining the federal government, which has alienated progressive customers and led to a boycott of the brand.
The success of Tesla's AI strategy, particularly its full self-driving (FSD) technology, is now crucial to the company's future, with Musk warning that solving autonomous driving is essential to Tesla's survival. The company's robotaxi pilot is scheduled to launch next month, but with a small fleet of vehicles, the risk of accidents is still high, and investors are watching closely to see if Tesla can scale its robotaxi business without risking safety.
As the robotaxi pilot approaches, investors are eagerly waiting to see if Tesla can deliver on its promises and avoid a precipitous decline in sales, with the company's stock price heavily dependent on the success of its AI strategy, and investors paying almost 100 times the forecast earnings per share for 2026.