- Tesla is adding another Model Y option with cloth seats and fewer screens that starts at $43,630.
- The All-Wheel-Drive car saves $7,000 compared to its more luxe sibling.
- The move comes as Tesla pivots toward robotics and self-driving — and grapples with a decline in car sales in 2025.
Tesla is adding another cheaper Model Y to its lineup — and simplifying the car's naming conventions in the process.
The electric automaker is rolling out a pared-down version of the Model Y with an all-wheel-drive powertrain. The new trim starts at $43,630, about $7,000 less than the Model Y Premium AWD.
Like Tesla's other lower-cost efforts, the trim strips out high-end features like leather seats, the panoramic glass roof, and the second-row climate-control screen.
The model has the shortest range of any Model Y, likely because of the added traction. It offers 294 miles on a full charge.
The new trim expands Tesla's lower-cost offerings. Three months ago, the company introduced the Standard Rear-Wheel-Drive trim for the Model Y starting at $41,630. That model shaved $5,000 off the price of the RWD Premium. It has an estimated range of 321 miles.
The new AWD option, however, delivers a noticeable performance upgrade over the cheaper RWD trim. It springs from standing to 60 mph in 4.6 seconds — 2.2 seconds faster than the RWD model.
Tesla didn't respond to a request for comment from Business Insider.
Tesla is also ditching the 'Standard' badge
Alongside the new trim, Tesla has quietly dropped the "Standard" name from its entry-level Model 3 and Model Y vehicles. The cheapest versions are now called "Rear-Wheel Drive," while higher-end trims retain the "Premium" and "Performance" names.
The switch-up comes as Tesla rejigs its vehicle lineup following months of lagging sales. During last week's Tesla earnings call, the company said it would discontinue its oldest models, the Model S and Model X.
"It's time to basically bring the Model S and X programs to an end with an honorable discharge, because we're really moving into a future that is based on autonomy," CEO Elon Musk said while announcing their sunsetting.
Tesla's focus is increasingly shifting toward self-driving and robotics, including last year's robotaxi launch in Austin, the planned release of its autonomous Cybercab, and a production ramp for its humanoid robot, Optimus.
The adjustments also come as Tesla's five-car lineup saw a 9% sales slump.
Last year, Tesla lost its global EV sales crown to BYD, while Volkswagen overtook the company in European electric vehicle sales.
The Model S and Model X have been Tesla's weakest sellers. In 2024, the company sold a combined 50,850 units of the Cybertruck, Model S sedan, and Model X SUV.
That was just over just over 3% of the automaker's 1,636,129 sales.
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