Tesla has added a new entry-level all-wheel-drive Model Y electric SUV to its US lineup at $41,990 with 294 miles of EPA-estimated range, expanding options to five trims. The update, amid declining sales, coincides with plans to discontinue Model S and Model X production in spring 2026 to prioritize Optimus robotics manufacturing.
Tesla quietly updated its US Model Y lineup on February 3, 2026, and began sales of the new variant on February 4. Priced at $41,990 before incentives, the all-wheel-drive model offers dual motors for 0-60 mph acceleration in 4.6 seconds—faster than the base rear-wheel-drive version at $39,990 (321 miles range, 6.8 seconds)—while matching its decontented approach with cheaper materials, fabric seats, a 7-speaker audio system, manual steering adjustment, no rear touchscreen, no ambient lighting, no FM radio, simplified acoustic glass, and no premium features like panoramic roof or heated rear seats.
Tesla dropped the 'Standard' branding for entry-level models, now simply labeled Rear-Wheel Drive and All-Wheel Drive. The full lineup includes: RWD ($39,990, 321 miles), AWD ($41,990, 294 miles), Premium RWD ($44,990, 357 miles), Premium AWD ($48,990, 327 miles), and Performance AWD ($57,490, 303 miles). Cargo capacity is listed at 74.8 cubic feet. Tesla VP of finance Sendil Palani highlighted on X that it is 'the lowest-priced AWD vehicle we’ve ever sold in North America by a significant margin,' with production ramping and deliveries in 2-3 weeks.
The addition addresses competitive pressure from vehicles like the BMW iX3, Volvo EX60, Mercedes-Benz GLC Electric, and Rivian R2, amid an 8.6% drop in global deliveries last year. Model Y remains Tesla's bestseller, with 357,528 US units in 2025 (down from 372,613 in 2024). Analysts doubt if trim proliferation ensures long-term relevance, especially as CEO Elon Musk confirmed ending Model S sedan and Model X SUV production to focus on Optimus robots. Family-oriented buyers seeking three-row SUVs may look elsewhere, though a stretched Model Y L is available in China and could reach the US later this year. Tesla's emphasis on autonomy and Robotaxi risks added production complexity without addressing space demands.
