Tesla (TSLA) Stock: Electric Vehicle Maker Rolls Out New Model Y Variant as Sales Strategy Changes

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TLDR

  • Tesla launched a fresh Model Y all-wheel-drive variant priced at $41,990, which is placed between the Standard rear-wheel-drive and premium models.
  • The rollout comes after Tesla introduced lower-priced Model Y and Model 3 versions in October 2025, slashing prices by $5,000 from previous base models.
  • TSLA stock has dropped 6% year-to-date, with the company reporting its first annual revenue decline even though it exceeded Q4 2025 expectations.
  • China declared a ban on Tesla-style retractable door handles starting next year because of safety worries about doors not opening during accidents.
  • Wall Street keeps a Hold rating on Tesla, with an average price target of $393.51 indicating a 7% potential drop from current levels.

Tesla revealed a new all-wheel-drive version of its Model Y SUV, priced at $41,990, as the electric vehicle maker continues adjusting its pricing strategy to attract buyers in a cooling market. The new AWD model fits in between the cheaper rear-wheel-drive Standard version and the company’s premium offerings.

The launch represents Tesla’s latest endeavor to stimulate demand through expanded product options. In October 2025, the company introduced lower-priced Standard versions of both the Model Y and Model 3 sedan, cutting around $5,000 from previous base model prices. These Standard trims have become central to Tesla’s 2026 strategy, which is aimed at lowering entry prices for cost-conscious buyers.

The U.S. electric vehicle market has faced headwinds since September, when the Trump administration ended the $7,500 federal tax credit. Tesla’s Standard variants help bring prices closer to pre-incentive levels, partially counteracting the higher effective purchase costs buyers now face. In international markets, the $5,000 price reduction offers a more visible discount meant to boost demand.

TSLA Stock Card

Tesla stock has decreased by 6% in 2026. The company recently delivered better-than-expected fourth-quarter 2025 results but reported its first annual revenue decline.

Margin Pressure Concerns

Analysts have raised concerns about the effect of lower-priced vehicles on profit margins. The margins are already under pressure due to fierce competition and weak sales volumes. Questions remain about whether Tesla can offset the impact through reduced manufacturing costs or increased revenue from software and services.

CEO Elon Musk announced last week that Tesla would stop production of its Model S and Model X sedans. The company plans to use the California factory space previously allocated to those vehicles for manufacturing Optimus humanoid robots instead.

China Implements Door Handle Ban

China’s Ministry of Industry and Information Technology announced new regulations banning hidden or retractable door handles, a design popularized by . The ban comes into effect next year following growing safety concerns about doors failing to open during accidents.

The new rule requires all vehicles to have both internal and external door handles that can be opened manually. The ministry stated the regulation would “improve the level of automotive safety design.” More than half of new cars sold in China are electric or plug-in hybrids, many featuring the retractable handle design. In the U.S., Hyundai’s Ioniq also offers retractable handles along with Tesla vehicles.

Wall Street analysts maintain a Hold consensus rating on Tesla stock. The average price target of $393.51 suggests a 7% decline from current levels as the company navigates the challenging EV market landscape.