Tesla (NASDAQ:TSLA) is likely set to unveil a lower-cost version of its popular Model Y SUV on Tuesday in a bid to counter loss from EV tax credits, Bloomberg reported, citing people familiar with the matter.
The cheaper variant will lack certain features and use less premium materials to make up for the loss of the $7,500 federal tax credit that the U.S. stopped providing this month, the people said. Tesla likely reduced the Model Y’s cost partly by reengineering its battery pack and motor, the report added.
The carmaker teased an upcoming event for October 7 on Sunday, fueling speculation about a lower-cost model. The first post showed a spinning object and ended with “10/7.” Another on Sunday appeared to show headlights against a black background.
“It’s the Model Y,” Musk said jokingly at the company’s most recent earnings call and said he would “let the cat out of the bag”. “The desire to buy the car is very high; it’s just that people don’t have enough money in their bank accounts to afford it. So, the more affordable we can make the car, the better.”
Other company officials had indicated that production of a more affordable version began in June, but they decided to delay ramping up output until EV tax credits were phased out.
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