- Tesla launches a cheaper all-wheel drive Model Y
- The car forgoes some luxury but costs $41,990
- Cheaper models could help Tesla fend off the competition
Tesla’s sales have taken a hit across the globe recently, with numbers falling to a near four-year low in November 2025 in the US, according to statistics from Cox Automotive, via Pakinomist.
The picture is even bleaker in Europe, with a drop of as much as 88% in some regions.
While sales of electric cars in the U.S. overall have taken a nosedive, exacerbated by the Trump administration’s cancellation of the $7,500 federal tax credit, Elon Musk’s once-innovative brand has been particularly affected.
The company’s overall sales fell nearly 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, which it hopes will increase demand, thanks to a bump in performance at a very low cost.
The $41,990 (before incentives) AWD Model Y sits just above the base-spec rear-wheel-drive Model Y, offering an EPA range of 294 miles and a 0-60 mph sprint time of 4.6 seconds, more than two seconds faster than the entry-level rear-wheel-drive variant.
Although Tesla has dropped the “Standard” naming convention in its marketing materials, this new fifth addition to the range largely follows the same pattern as the cheapest 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-wheel drive counterpart, this new car lacks the HEPA filter, touch-screen adjustable air vents, vegan leather interior, power-folding seats, adaptive high beams and frequency-dependent shock absorbers of the more expensive Premium counterparts.
The all-electric range is also slightly down in the rear-wheel drive version, thanks to the second motor and extra performance on tap, with 321 miles playing 294 miles.
Tesla needs more affordable cars
The added benefits of having four-wheel drive, as well as the extra pace for an additional $2,000, will appeal to North American buyers – a group drastically lacking in electric vehicle options due to a decision by many global automakers not to export to the tariff-ridden market.
As we’ve said before, the latest iterations of both the Model 3 and Model Y are the best cars Tesla has ever made, and even in the more basic ‘Standard’ trims, they still represent an excellent, hassle-free introduction to the world of electric cars. Especially when you consider that Tesla’s Supercharger network remains one of the simplest and most seamless ways to charge.
Tesla’s choice to offer cheaper versions of its bestsellers is smart and timely as, despite declining demand for electric cars in the US, there are a growing number of premium electrified rivals from BMW, Volvo and Mercedes-Benz set to arrive in the coming months.
If Tesla wants to stay competitive, it needs to undercut the competition.
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