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Tesla launches lower-cost Model Y to revive sales

Tesla launched a new, more affordable model of its Model Y SUV, starting at just $39,990. The electric vehicle maker is trying to combat falling sales and a shrinking market share in the face of increasing global competition.

Elon Musk, the CEO of Tesla, has been promising mass-market cars for years. However, last year, he cancelled plans to build a new $25,000 electric vehicle, as first reported.

Musk announced late last year that the vehicle will be priced below $30,000, including U.S. electric tax credits.

The credit was terminated 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.

Tesla posted two videos on X this weekend, igniting interest among fans. The first video features headlights peeking out from the darkness. Another shows what appears to be a spinning wheel for a few moments, followed by the U.S. date format of October 7.

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Musk originally promised that production would begin by the end June. Tesla said that in July it had only produced "first builds" and would not be ready for customers until the end of the year.

Tesla is already struggling with the slowing of sales due to its aging product line. Competition has increased rapidly, particularly in China and Europe where Musk's extreme right-wing political views have undermined brand loyalty.

Tesla introduced a new version of its Model Y earlier this year. It featured improvements such as a rear-screen touchscreen and light bars.

Musk has shifted the focus of his company to 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.

According to sources, the EV manufacturer also plans on releasing a stripped down version of its Model 3 midsize car.

The board of Tesla has set several milestones for the company, including a $1 trillion compensation package for Musk. One of these is delivering 20,000,000 vehicles in the next decade. (Reporting from Abhirup Roy and Akash Sriram, in San Francisco; editing by Peter Henderson and Richard Chang, Srirajkalluvila, and Alan Barona.)

(source: Reuters)