- Tesla launches a cheaper all-wheel drive Model Y
- The car gives up some luxuries but costs $41,990
- Cheaper models could help Tesla fend off competition
Tesla sales have been taking a beating around the world lately, with numbers falling to a nearly four-year low in November 2025 in the US, according to statistics from Cox Automotive, via PakGazette.
The picture is even bleaker in Europe, with numbers falling by as much as 88% in some regions.
While electric vehicle sales in the United States have generally suffered a nasty slowdown, worsened by the Trump administration’s cancellation of the $7,500 federal tax credit, Elon Musk’s once-innovative brand has been particularly hard hit.
The company’s total sales fell almost 23% in 2025 compared to the previous year, despite the launch of cheaper Standard versions of the Model 3 and Model Y.
The company is now fighting back with a more affordable Model Y AWD version that it hopes will increase demand, thanks to an increase in performance at a very low cost.
The $41,990 (before incentives) Model Y AWD sits just above the base-spec rear-drive Model Y, offering an EPA range of 294 miles and a 0-60 mph sprint time of 4.6 seconds, which is more than two seconds faster than the base rear-drive variant.
Although Tesla has abandoned the “Standard” naming convention in its marketing materials, this new fifth addition to the lineup largely follows the same pattern as the cheaper cars in the range, eschewing the premium audio system, second-row touchscreen, and open glass roof for much more basic options.
So, like its rear-drive counterpart, this new car lacks the HEPA filter, touchscreen adjustable air vents, vegan leather interior, electric folding seats, adaptive high beams and frequency-dependent dampers of its more expensive Premium counterparts.
All-electric range is also slightly lower in the rear-drive version, thanks to the second motor and additional available performance, at 321 miles versus 294 miles.
Tesla needs more affordable cars
The added benefits of having all-wheel drive, as well as the extra pace for an extra $2,000, will be attractive to North American buyers, a group drastically lacking in options in electric vehicles due to the decision by many global automakers not to export to the tariff-plagued market.
As we’ve said before, the latest versions of both the Model 3 and Model Y are the best cars Tesla has ever made, and even in the most basic “Standard” versions, they still represent an excellent, hassle-free introduction to the world of electric vehicles. Especially considering that Tesla’s Supercharger network is still one of the easiest and most seamless ways to charge.
Tesla’s decision to offer cheaper versions of its best-sellers is smart and timely, as even though demand for electric vehicles in the US is declining, there are a growing number of premium electrified rivals from BMW, Volvo and Mercedes-Benz arriving in the coming months.
If Tesla wants to remain competitive, it needs to undercut the competition.
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