Tesla has introduced a new all-wheel-drive version of its Model Y electric SUV, priced at $41,990, slotting between the base rear-wheel-drive model and premium trims. This addition expands options for buyers seeking better traction without premium features. The company also dropped the 'Standard' branding for entry-level models.
On February 3, 2026, Tesla quietly updated its US lineup by adding a fifth Model Y configuration: an all-wheel-drive variant starting at $41,990 before incentives. This model offers 294 miles of EPA-estimated range and accelerates from 0 to 60 mph in 4.6 seconds, thanks to dual motors. It costs $2,000 more than the base rear-wheel-drive Model Y, which is priced at $39,990 and provides 321 miles of range but takes 6.8 seconds to reach 60 mph.
The new AWD version retains the decontented features of the entry-level lineup, including fabric seats, a 7-speaker audio system, manual steering column adjustment, no rear touchscreen, no ambient lighting, and simplified acoustic glass. It lacks premium elements like the panoramic glass roof, heated rear seats, and adaptive high beams found in higher trims. Tesla's website lists the cargo capacity at 74.8 cubic feet, slightly more than the RWD model's 74 cubic feet.
Alongside the launch, Tesla renamed its base models, eliminating the 'Standard' moniker introduced last year to lower entry prices after US EV tax credit changes. Entry-level options are now simply designated as Rear-Wheel Drive and All-Wheel Drive, while upper trims retain 'Premium' and 'Performance' labels. The full US Model Y lineup now includes: Model Y RWD ($39,990, 321 miles), Model Y AWD ($41,990, 294 miles), Model Y Premium RWD ($44,990, 357 miles), Model Y Premium AWD ($48,990, 327 miles), and Model Y Performance ($57,490, 303 miles).
This move comes amid competitive pressure from rivals like the BMW iX3, Volvo EX60, Mercedes-Benz GLC Electric, and upcoming Rivian R2. Tesla's vice president of finance, Sendil Palani, noted on X that the new model is 'the lowest-priced AWD vehicle we’ve ever sold in North America by a significant margin.' Production is ramping up, with deliveries expected in 2-3 weeks in most US regions. The update aims to boost accessibility in a cooling EV market, where Tesla's US sales fell 7% last year.
