From the low-priced standard version to all-wheel drive: Tesla, Inc. (TSLA.US) is expanding its Model Y product lineup in the United States to address subsidy reductions and increased competition.

Tesla, Inc. (TSLA.US) website showed on Monday local time that the electric car manufacturer has launched its popular Model Y SUV with a new all-wheel-drive version in the US market, with a starting price of $41,990. The new all-wheel-drive version of the Model Y is positioned higher than the lower-priced rear-wheel-drive standard version. Earlier in October last year, Tesla, Inc. had already launched low-priced standard versions of the Model Y and Model 3 sedan, priced about $5000 lower than the previous base models. These simplified versions have become the core of Tesla, Inc.'s strategy for 2026, as Tesla, Inc. lowers the entry price of models to attract more price-sensitive consumers and achieve market penetration without waiting for the introduction of new mass-market models. In the domestic US market, the pricing of Tesla, Inc.'s standard models is further aligned with pre-federal subsidy levels, effectively offsetting the impact of the actual increase in consumer purchasing costs. In other overseas markets, the prices of this series of models are also lowered by about $5000, aiming to further boost market demand through price reductions amid intensifying industry competition. Since the Trump administration ended the $7500 federal tax credit policy in September last year, the overall popularity of the US electric car market has cooled down. At the same time, Tesla, Inc. is facing increasing industry competition globally. Analysts warn that if Tesla, Inc. cannot offset the impact through lower manufacturing costs or increased revenue from software and service businesses, a further increase in the proportion of low-priced models may continue to put pressure on the company's profit margins. In addition, Tesla, Inc. CEO Musk announced last week that the company will stop production of the Model S and Model X, and the relevant production lines at its California factory will be used for the production of humanoid Siasun Robot & Automation.