Investing.com -- Tesla (NASDAQ:TSLA)’s plans to introduce a more affordable version of its best-selling Model Y SUV have hit a delay, according to a Reuters report citing three sources familiar with the matter.
The electric vehicle (EV) maker is expected to provide more clarity on its product roadmap during its earnings report on Tuesday. According to Reuters, the company is also developing a stripped-down version of its Model 3 sedan to further expand its mass-market appeal.
The new lower-cost vehicle, internally referred to as E41, was originally expected to begin production in the U.S. in the first half of this year. However, sources now say the timeline has slipped, with production likely to begin between the third quarter and early 2025.
While the exact reason for the delay remains unclear, two of the sources told Reuters that Tesla aims to produce 250,000 units of the budget Model Y in the U.S. by 2026. The vehicle is also slated for future production in China and Europe.
Reuters previously reported that Tesla’s China production of the E41 is expected to begin in 2026, and that the model will cost 20% less to build than the recently refreshed Model Y.
Tesla fans and investors have been eagerly awaiting the company’s rollout of more affordable electric vehicles, which are viewed as crucial to reinvigorating demand amid falling sales and rising competition.
The company has also updated its existing Model Y with design changes, while the Long Range All-Wheel Drive version currently starts around $49,000 in the U.S., before federal tax incentives.