Tesla Model Y, a New S.U.V., Is Unveiled Amid Mounting Challenges

Tesla Model Y, a New S.U.V., Is Unveiled Amid Mounting Challenges


A more affordable version with a range of about 230 miles and a starting price of $39,000 is supposed to go into production in spring 2021.

Tesla said it aimed to offer the Model Y in the United States, Canada, Mexico, China, Germany, the Netherlands and a number of other European countries.

Investors seemed unimpressed by the rollout. Tesla’s shares declined 5 percent on Friday.

Tesla is confronting sales challenges in Europe and China, markets it has been counting on for expansion. The company has also faced some operational uncertainty. Two weeks ago, Mr. Musk announced that Tesla would begin selling a long-awaited version of its Model 3 sedan priced at $35,000, $8,000 less than the cheapest current version. But he said Tesla would lose money in the first quarter, and analysts question whether Tesla can ever make money on the car at the lower price.

Tesla originally said customers would have to wait two to four weeks for delivery of the $35,000 Model 3. It now says the wait is six to eight weeks because of the volume of orders.

Sales of Tesla’s other models, the Model S luxury sedan and Model X sport utility vehicle, have been flattening. And analysts suspect that demand for Tesla vehicles has softened since the beginning of the year, when the federal tax credit available to Tesla customers fell by half, raising the total cost for buyers. Until the end of 2018, Tesla buyers were eligible for a credit of $7,500. That fell to $3,850 on Jan. 1, essentially raising the price of Tesla cars.

Tesla responded with a series of price cuts to lift sales. In a conference call in January, Mr. Musk said many customers could not afford the company’s cars.

To cut costs, Tesla announced that it would close most of its stores around the country. Days later, it backtracked and decided to keep many of the stores, and to reopen some that had already closed, though it affirmed a shift toward online-only sales. It also reversed direction on pricing, saying it would increase prices on all its cars except the $35,000 version of the Model 3.



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