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Why Is Elon Musk's 'Y' car so cheap? Tesla's 2025 model sparks EV price shock
Global Desk | May 11, 2025 4:20 AM CST

Synopsis

Tesla’s new 2025 Model 'Y' is now cheaper than before. It comes in two versions. One goes farther, the other is faster. Elon Musk-led Tesla may be cutting prices to stay ahead of strong competition.

Are you a car lover planning to buy a new car but have a limited budget? Well, Elon Musk-headed Tesla has made it easier for you, they are now selling cars at lower prices.

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Tesla has launched a cheaper version of its Model Y electric SUV in 2025. It’s the most affordable Model Y since Spring 2024. Normally, car prices go up with new models due to inflation and upgrades. But this time, Tesla has made the new Model Y cheaper in some cases, as per a report on USA Today.

Only two versions of the 2025 Tesla Model Y are available in the U.S. as of May 9, the long range Rear-Wheel Drive (RWD), Base price is $44,990, After federal EV tax credit it is $37,490. And In some states like New Jersey with extra $2,000 incentive, costs $35,490.

Long Range All-Wheel Drive (AWD) base price is $48,990, after federal EV tax credit will cost $39,390. And no Performance version is offered for 2025, unlike earlier years.

The 2025 Tesla Model Y comes in two types, one with Rear-Wheel Drive (RWD) and another on with All-Wheel Drive (AWD). The RWD one is cheaper and can go about 357 miles on one full charge. But it’s a bit slower, takes around 5.4 seconds to go from 0 to 60 mph. The AWD one costs more but it’s quicker, it hits 60 mph in just 4.6 seconds. It also better on the road, especially in rain or snow, but it doesn’t go as far, about 327 miles on a charge. So if you care more about saving money and driving longer, go with RWD. If you want more speed and better control, go with AWD.

Why Did Tesla Make It So Cheap?

Tesla has cut prices on Model Y in recent months. Some possible reasons are that Tesla stock dropped 41.5 per cent from $379.28 to $221.86 between January 2 to April 8. Sales of electric cars are dropping in 8 out of the 10 biggest EV markets in Europe. A lot of people around the world are also starting to feel a bit negative about Elon Musk and Tesla. So, Tesla is trying to boost interest and stay in the game. One good thing for them is that the Model 'Y' is made in the USA, so it avoids extra taxes that other non-US cars might have to pay.

The new 2025 Tesla Model Y has some competition. Cars like the Kia EV6 ($42,900) look sporty. The Hyundai Ioniq 5 ($42,600) is great for families. The Volkswagen ID.4 $45,095 is big in Europe because it’s comfortable. Then the Chevrolet Equinox EV, which starts at just $34,995 is the best deal overall. Basically, there are a bunch of EVs out there now, so buyers have a lot of choices besides the Model Y.

Despite controversies around Elon Musk, the Model Y still offers solid value. However, it's no longer the only great choice in the electric SUV market. Buyers now have multiple strong options under $45,000.

FAQs

Q1. Is the 2025 Tesla Model Y cheaper than last year’s?
A1. Yes, it's the most affordable since Spring 2024.

Q2. Which version of the Model Y goes farther on a single charge?
A2. The Rear-Wheel Drive (RWD) version, with up to 357 miles.


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