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Investing.com -- Tesla (NASDAQ:TSLA) has delayed the launch of a cheaper, U.S.-made version of its Model Y SUV, Reuters reported Monday, pushing production back by several months from the company’s earlier timeline.
The carmaker’s shares fell more than 3% in premarket trading.
The new vehicle, internally codenamed E41, was expected to go into production earlier this year, aligning with Tesla’s public pledge to deliver affordable EVs in the first half of 2025.
However, the report, citing sources familiar with the matter, says manufacturing in the United States is now expected to begin several months later than originally planned, with revised targets ranging from the third quarter to early next year. The reason for the delay was not clear.
Per the report, Tesla aims to build around 250,000 units of the cheaper Model Y in the U.S. in 2026. Reuters had previously reported that the new vehicle would also be produced in China and Europe, but the delay in U.S. production and the 2026 U.S. production target had not been disclosed before.
Tesla reports earnings on Tuesday, and details about its upcoming vehicles remain a key question for investors. The less expensive models have been highly anticipated by Tesla fans and shareholders, who hope the cars will appeal to new buyers and help offset falling sales and shrinking market share.
The company has also refreshed its current Model Y with updated interior and exterior features.
In China, Reuters reported last month that the E41 is scheduled for launch in 2026 and will be smaller and 20% less costly to produce than the updated Model Y, the report notes, citing sources familiar with the company’s China plans. The timing for a European launch has not been confirmed.
Tesla is also developing a no-frills version of its Model 3 compact sedan, the report added.