Tesla expands the Model Y lineup with a lower-priced AWD option

[Skye Jacobs]

What just happened? Tesla has quietly restructured its vehicle portfolio again – this time expanding the company's best-selling crossover after deciding to retire two of its longest-running models. The company introduced a new all-wheel-drive version of the Model Y for the US market on Monday night, priced at $41,990. The move brings the total number of Model Y configurations to five.

The newly added AWD variant offers 294 miles of range, a top speed of 125 mph, and can accelerate from zero to 60 mph in 4.6 seconds. These figures place it squarely between the rear-wheel-drive base model, which starts at $39,990, and the higher-end Performance trim. The configuration resembles Tesla's recent Standard range offerings, designed for practicality and price efficiency rather than luxury.

The timing of the release suggests a broader restructuring at Tesla. Only a week earlier, CEO Elon Musk confirmed that the Model S and Model X were being phased out, closing a chapter on Tesla's early luxury ambitions. Their retirement reportedly frees capacity at the Fremont, California, plant – capacity now intended for broader production goals, including the Optimus humanoid robot Musk says will one day exceed the car business in scale.

By emphasizing the Model Y – the most produced vehicle in its lineup – Tesla continues to shift toward mass-market efficiency. The company's focus appears to be on variants that streamline production, limit parts variation, and appeal to a wider range of buyers without diluting brand performance standards.

Unlike Tesla's Premium trims, which add upgraded interiors and longer ranges, the new AWD option prioritizes accessibility and delivery speed. It's part of a strategy Tesla has used before: offer incremental configurations to match pricing sensitivity without fragmenting the product too deeply. Analysts have read the addition as both a sign of manufacturing flexibility and a reflection of softer EV demand across the market.

With the Model S and X gone, Tesla's vehicle lineup centers on the Model 3, Model Y, Cybertruck, and the Cybercab – each positioned to play a defined part in an autonomous future that Musk continues to emphasize publicly. Consumer demand for large electric SUVs remains unmet, but Tesla seems content to hold that space until a next-generation platform or a larger Cyber SUV arrives.

By broadening the Model Y's lineup rather than developing a brand-new model, Tesla can maintain focus on its software and AI initiatives while sustaining vehicle sales volume. In that sense, the $41,990 AWD variant is less about product novelty and more about reinforcing Tesla's most reliable production line while creating the industrial conditions needed for its next phase – full autonomy and robotics.

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Tesla expands the Model Y lineup with a lower-priced AWD option

 

[JMGuy]

Shuffling Model Y trims while quietly killing off the S and X looks more like cost control dressed up as strategy to me. When any CEO treats their core products as disposable, especially in favor of endless hype cycles, it’s hard to have any faith in long-term quality or product support.

Elon is more interested in stretching platforms as far as they will go while asking starry-eyed customers to “just trust me” on a future that never quite arrives. Rinse. Repeat.

 

[Billybobjoey]

Shuffling Model Y trims while quietly killing off the S and X looks more like cost control dressed up as strategy to me. When any CEO treats their core products as disposable, especially in favor of endless hype cycles, it’s hard to have any faith in long-term quality or product support.

Elon is more interested in stretching platforms as far as they will go while asking starry-eyed customers to “just trust me” on a future that never quite arrives. Rinse. Repeat.

Would have been great if the "affordable" Tesla ever arrived. Instead, the cheapest model that isn't being phased out is the Model 3 which currently sits at over $41,000 to start after including the estimated taxes and fees. Don't forget the monthly $10 subscription if you want connectivity beyond GPS, and that isn't even taking into account the "autopilot" subscription either.

 

[bviktor]

Cool. Too bad it's not working.

Elon Musk's full-electric brand, whose market in the continent shrank 27% last year, registered 26% more cars in Sweden and 3% more in Denmark in January than in the same month of 2025, with 512 and 458 cars sold respectively, official data showed on Monday.

Its registrations, a proxy for sales, fell 88% to 83 vehicles in Norway, one of the most brand-loyal countries in Europe which has been at the forefront of EV adoption, and by 42% to 661 in France.

 

[Theinsanegamer]

Shuffling Model Y trims while quietly killing off the S and X looks more like cost control dressed up as strategy to me. When any CEO treats their core products as disposable, especially in favor of endless hype cycles, it’s hard to have any faith in long-term quality or product support.

Elon is more interested in stretching platforms as far as they will go while asking starry-eyed customers to “just trust me” on a future that never quite arrives. Rinse. Repeat.

The model Y sells more in a month then the s and x were selling a year. It makes up the lions share of sales.

Tesla is doing the same thing every car company does, but it's musk so it must be bad.

Would have been great if the "affordable" Tesla ever arrived. Instead, the cheapest model that isn't being phased out is the Model 3 which currently sits at over $41,000 to start after including the estimated taxes and fees. Don't forget the monthly $10 subscription if you want connectivity beyond GPS, and that isn't even taking into account the "autopilot" subscription either.

Inflations a *****, ain't it?

 

[JMGuy]

The model Y sells more in a month then the s and x were selling a year. It makes up the lions share of sales.

Tesla is doing the same thing every car company does, but it's musk so it must be bad.

Uh, no. Your assumptions about my viewpoint motivations are wholly incorrect, friend.

Tesla built a following on innovation. However too many of Musk’s promised technologies have been repeatedly delayed and/or underdelivered. Tesla has a historic pattern that makes it reasonable to be skeptical of Musk’s promises. He has focused on hype and volume over delivering on existing flagship products which mirrors the behavior of a classic over-seller.

I don’t agree that this is the same thing “every car company does.” And Elon, as a person, doesn’t have much to do with my perspective on Tesla as a brand. That said, his public persona doesn’t help lend confidence to stability either.

 

[Kirby1]

I would never buy anything from a known pedophile.

 

[NumberNine]

Still not enough chargers out there.

 

[BlackyNoir]

Will the swastika be a paint option, or will it be for all base models?

 

[Theinsanegamer]

Uh, no. Your assumptions about my viewpoint motivations are wholly incorrect, friend.

See, you SAY that, but:

Tesla built a following on innovation. However too many of Musk’s promised technologies have been repeatedly delayed and/or underdelivered. Tesla has a historic pattern that makes it reasonable to be skeptical of Musk’s promises. He has focused on hype and volume over delivering on existing flagship products which mirrors the behavior of a classic over-seller.

You write this paragraph about how musks promises should not be believed (which is correct), on an article where the company is ACTIVELY DELIVERING the thing the article is talking about. Musk isnt promising a cheaper AWD model Y. Tesla already had it available, you can go order one right now.

So where is the oversell? Where is the delay? If this isnt judging based on ownership of the company, its flat out uninformed FUD that has nothing to do with the model Y itself.

I don’t agree that this is the same thing “every car company does.” And Elon, as a person, doesn’t have much to do with my perspective on Tesla as a brand. That said, his public persona doesn’t help lend confidence to stability either.

Im curious, what does your reality look like? Just off the top of my head, in the last decade:

Ford: discontinued the taurus and fusion from low sales, introduced the maverick (which sold well) and has expanded its trim levels and options

Honda: expanded the trim options on the Pilot/Ridgeline in response to strong sales, discontinued the civic sport

Kia: discontinued their full size K9 sedan, introduced new trims and models for high sale EVs and small crossovers

Chevy: discontinued low selling sedans, increased number of crossovers

I could go on. Sure looks like, to me, that car companies frequently discontinue low selling models that are getting long in the tooth, and expand the number of models offered in popular categories, specially sedans which the model S is. So which car companies are not doing it? Id love to hear about the companies that ignore popular models while dumping money into low sale boat anchors.

Heres some more facts: The model S is a big sedan. This is a low sale category. Carfigures suggests the model S moves a whopping 7,199 units TOTAL in 2025.

2024 Tesla Model S Sales Figures

Tesla Model S monthly, quarterly, and yearly sales and statistics in the United States. Including data and interactive charts for the latest model year 2024 and cars segment.

carfigures.com

Now, Im not some high falutin business guy, but even I know that sales number is unsustainable. The model S is also OLD, its design dates back to 2012. Its received some updates, but the platform is due for a major refresh, and with such pitiful numbers, theres no business case. Same issue with the X, its a big SUV, and the big SUV market is second only to the truck market in brand loyalty. The X never caught on and is similarly old, old enough it was featured on old Top Gear. It sells better, but not great, certainly not enough to justify hundreds of millions on a major refresh.

So I'm very curious: why is it wrong for Tesla to discontinue a vehicle that sells 7200 cars a year, in an industry that considers 40k a year to be low volume (the ford taurus)? Why does this suggest the brand is unstable, and why is Tesla unique in this? Because to me, it sure seems like Tesla is doing what everyone does, and in typical fashion, people come out of the woodwork to throw stones because hating Elon and his companies has been popular since he bought Twitter. I cant think of a rational reason to say Tesla is unique in this behavior, perhaps you know more then I?

 

[Plutoisaplanet]

Would have been great if the "affordable" Tesla ever arrived. Instead, the cheapest model that isn't being phased out is the Model 3 which currently sits at over $41,000 to start after including the estimated taxes and fees. Don't forget the monthly $10 subscription if you want connectivity beyond GPS, and that isn't even taking into account the "autopilot" subscription either.

You really have a way of misrepresenting things. No one that I knows (in the US) compares car prices by taxes because it varies geographically. Plus it's not easy to find because every automaker are required by law to list prices by MSRP (prior to destination/delivery fee and taxes). So let's list the actual starting MSRP of the Model 3 please, which is $37k. The starting price of the Model Y is $40k.

Next, yes that subscription is $10 per month/$100 per year (I notice you left out taxes on that, well done lol). For people who don't want to pay it, everything it offers can be done with your personal phone with the exception of streaming video from your car's cameras to your phone (instead you'd need to use a USB drive to copy dashcam videos).

That means all of the mobile app functionality still works (again except streaming videos). You still get the integrated dashcam feature, video recordings and notifications of sentry mode/security events, OTA software updates, and most of the streaming entertainment features when using your phone's Wifi hotspot. Heck you even get traffic-based routing with standard connectivity. You'd be hard-pressed to get these features for free from competing automakers, let alone for a monthly subscription (though if they offer it, I'm interested in hearing about it). Here is the full breakdown of the connectivity subscription: https://www.tesla.com/support/connectivity

Finally, I agree the FSD subscription is expensive, but they have pricing power. The only other automaker who has announced something comparable is Mercedes Benz (only in China currently), and MB is literally doing the same thing by offering Drive Assist Pro at $3950 for 3 years of availability ($110/month average, this is upcoming US pricing) and an undisclosed monthly subscription price (surely it'll be higher). Car and Driver reports it will be geofenced to supported cities while Tesla does only geofences it by nation: https://www.caranddriver.com/news/a69918627/mercedes-benz-mb-drive-assist-pro-sampled/

I don’t agree that this is the same thing “every car company does.” And Elon, as a person, doesn’t have much to do with my perspective on Tesla as a brand. That said, his public persona doesn’t help lend confidence to stability either.

Since Drive Assist Pro is a completely separate technology from their previous automated driving features (Distronic Plus and Drive Pilot), neither of those options are likely to be available. But they are/were both paid options as well, from what I can tell subpar Distronic Plus (later Distronic with Active Steering) costs $1,950 for basic steering and Drive Pilot was geofenced and offered at $2500 a year + more hardware lol. Other handsfree systems by Chevy and Ford were also offered from $25-75/month with mandatory 3 year subscription. These are a step down from Tesla FSD though because they won't self-navigate the car: https://techcrunch.com/2023/12/28/how-tesla-bmw-ford-gm-and-mercedes-driver-assist-systems-compare/

 

[Billybobjoey]

You really have a way of misrepresenting things. No one that I knows (in the US) compares car prices by taxes because it varies geographically. Plus it's not easy to find because every automaker are required by law to list prices by MSRP (prior to destination/delivery fee and taxes). So let's list the actual starting MSRP of the Model 3 please, which is $37k. The starting price of the Model Y is $40k.

Including taxes and fees is misrepresenting things now? Wow, nobody tell Europe I guess. That's one thing I actually liked about Tesla's store page, it actually gives you the option to see what the final price is going to be around unlike pretty much every other dealership who loves to hide the fees until the final signing.

Next, yes that subscription is $10 per month/$100 per year (I notice you left out taxes on that, well done lol).

There's a pretty big difference between a 0-10% tax on $37k vs $10/$100. Thought that would be obvious but apparently not.

That means all of the mobile app functionality still works (again except streaming videos). You still get the integrated dashcam feature, video recordings and notifications of sentry mode/security events, OTA software updates, and most of the streaming entertainment features when using your phone's Wifi hotspot. Heck you even get traffic-based routing with standard connectivity. You'd be hard-pressed to get these features for free from competing automakers, let alone for a monthly subscription (though if they offer it, I'm interested in hearing about it). Here is the full breakdown of the connectivity subscription:

That's actually good to know. Their details on the connectivity packages part of the "store" page does a pretty bad job of representing the standard plan then, it implies that all of that is exclusive to the premium tier.

 

[Plutoisaplanet]

Including taxes and fees is misrepresenting things now? Wow, nobody tell Europe I guess. That's one thing I actually liked about Tesla's store page, it actually gives you the option to see what the final price is going to be around unlike pretty much every other dealership who loves to hide the fees until the final signing.

Yeah that's definitely a difference in America (which is why I specified "in the US"). In Europe, everyone is mandated by law to use prices with VAT baked in. But considering he was using USD, it doesn't make sense to do that because each state or locality has its own (or no) sales tax so it varies. Besides, VAT is a supplier tax (baked into the price), whereas sales tax is a consumer tax (displayed separately from the subtotal). For example, there are 5 states that charge 0% on sales tax on cars, and one state charges as much as 7.5%: https://worldpopulationreview.com/state-rankings/car-sales-tax-by-state

It looks like JMGuy lives in a state that charges 6.25%+ sales tax, which is the top 1/3 more expensive states

 

[airbornex]

The new AWD trim at $41,990 is peak Tesla: same car, one more checkbox, perfectly slotted between the other four price points. The menu engineering is starting to look like ordering at Starbucks.

 

[Megalomaniac]

I just purchased a new EV yesterday. Far fewer rebates on it than I got back in 2024, but fortunately, I did get $4500 instead of $13,000.

But racist Musk is more focused on the race of who they are casting for movies than his failing car company.

 

[Theinsanegamer]

I just purchased a new EV yesterday. Far fewer rebates on it than I got back in 2024, but fortunately, I did get $4500 instead of $13,000.

But racist Musk is more focused on the race of who they are casting for movies than his failing car company.

Oh, what brand? Guarantee whatever you bought, the founder did FAR worse then whatever you think Musk is doing. Better not have been Korean, what with their child abuse in south america. Or the japanese brands, who were complicit in horrors throughout SE asia int he 30s (look up unit 731). Or the germans, whose polish vacation went a little out of hand. Or Ford or GM, both of which favored those funny hugo uniforms in the 30s.

Pretty sure if they cast a white or hispanic guy to play MLK jr in a film, you'd have something to say about it.

 

[Kashim]

The model Y sells more in a month then the s and x were selling a year. It makes up the lions share of sales.

Tesla is doing the same thing every car company does, but it's musk so it must be bad.

How dare anyone criticize Elon Musk at all! Not to worry, there's always a random internet guy coming to his defense. Musk is such a great guy though, if you ignore all the flip-flopping, racism, xenophobia, lies, self absorbance, delusional posts on X, and all the other nonsense he does. I mean, he's only been promising Full Self Driving every year for 10 years now. Every year is the year it's going to arrive. His Robotaxis are arriving every year too, and they're finally testing them in a tiny little area in Texas, with a driver for every "robo" taxi. hahahahaha

 

[netman]

"Tesla expands the Model Y lineup with a lower-priced AWD option"

... Still the same garbage car...!