Electric-vehicle maker Tesla Inc has introduced a new all-wheel-drive (AWD) variant of its bestselling Model Y SUV in the United States, priced at $41,990, according to the company’s website.
The new AWD model is positioned above the cheaper rear-wheel-drive “Standard” version and represents part of Tesla’s strategy to offer a broader range of price points for buyers.
This launch follows Tesla’s October rollout of lower-priced “Standard” versions of both the Model Y and the Model 3 sedan, which were introduced at prices about $5,000 below the previous base models. Those trims have become a key part of Tesla’s 2026 strategy, aimed at lowering entry prices to attract more cost-conscious buyers without waiting for a new mass-market vehicle.
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In the United States, the “Standard” variants bring prices closer to pre-federal incentive levels, helping offset higher effective purchase costs. In other markets, the trims cut roughly $5,000, a more visible reduction aimed at boosting demand amid heightened competition.
The broader electric-vehicle market has cooled since September, when the U.S. federal government ended the $7,500 tax credit for EV purchases. Tesla is facing intensifying global competition as other automakers expand their electric lineups.
Separately, Tesla’s CEO Elon Musk said last week that the carmaker would end production of its Model S and Model X sedans and instead use the space in its California factory to make humanoid robots.