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Tesla is expected to launch a lower-cost Model Y to reignite the sales

Tesla will unveil a cheaper version of the Model Y SUV on Tuesday, as it tries to reverse declining sales and waning share in a world where competition is increasing. Elon Musk, the CEO of Tesla, has been promising mass-market vehicles for years. However, last year, he cancelled plans to build a brand new $25,000 electric vehicle, according to first reported. The car that will be delivered this week is a "affordable vehicle" based on existing manufacturing and design platforms. Tesla posted two videos on X at the weekend to ignite excitement among Tesla enthusiasts. The first video features headlights peeking out from the darkness, while the second shows a spinning wheel for a short time before displaying "10/7", which is the U.S. format of October 7. Contrary to the previous Tesla launches, neither Tesla nor its influencers have confirmed that a live event will be held. Analysts, investors, and Tesla fans still expect some sort of announcement. The car's cost, range and attempts to reduce costs are all major questions. Musk announced late last year that the car would be priced under the "key threshold", which is $30,000, including U.S. electric vehicle tax credits. The credit expired at the end last month in the United States. Prices jumped by about $7,500. This helped boost quarterly sales, which reached a record. However, it is expected that the pace of sales will drop for the remainder of the year unless an affordable car can be found.

The desire to purchase the car is high. Musk stated in July that people simply don't have the money to purchase it. The more affordable the car is, the better. Musk originally promised that the production of the car would begin by the end June. Tesla said that they only produced "first builds" in July and added that the vehicle would be available to customers in the final three months of this year. Tesla is already struggling with the slowing of sales for its older lineup, as competition has increased rapidly, particularly in China and Europe. Musk's extreme right-wing political views have also undermined brand loyalty.

Tesla released a new version of its Model Y earlier this year with improvements such as new light bars and a touchscreen on the rear. Musk is directing the company's focus towards artificial intelligence and robotaxis, with a particular emphasis on humanoid robotics. Tesla has announced that it will introduce more affordable vehicles to its lineup, but hasn't provided any details. The EV maker is also said to be planning to release a stripped down version of its Model 3 midsize car. Tesla will need affordable cars to deliver 20 million vehicles in the next decade. This is one of several operational and valuation benchmarks set by the board of directors as part of their proposed $1 trillion compensation package for Musk. (Reporting and editing by Peter Henderson, Richard Chang, and Abhirup Roy from San Francisco)

(source: Reuters)