Electric vehicle (EV) demand has been slowing down for over a year. U.S. and European carmakers have faced increasing competition from cheaper Chinese manufacturers like BYD. Five years ago, Tesla was the go-to choice for anyone looking to buy an electric car. However, things have changed. Today, a wide variety of carmakers produce EVs that are not only comparable to Tesla but, in many cases, provide even better alternatives.
Among American carmakers, Lucid focuses on luxury and efficiency, Rivian specializes in adventure-ready vehicles, and Ford has introduced an electric version of its iconic F-150. In this new era, Tesla is no longer the default option. Although Tesla was a pioneer in the EV market and retains some advantages, 2024 marked the first time in a decade that Tesla’s delivery numbers declined. Two key reasons for this downturn are increased competition from other manufacturers and the fact that Tesla’s affordability has not improved significantly over the years, making EVs less accessible to a broader audience.
Q4 Tesla Delivery Decline
Tesla’s Q4 delivery numbers dropped compared to the previous year, partly because Updated Tesla Model Y launch was expected to be just around the corner and people have been patiently waiting to get the best and the latest from Model Y. This anticipation affected sales as customers delayed purchases to get the latest model.
Tesla officially launched the 2025 Model Y Juniper in China on January 9, 2025. Now the announcement in the US wasn’t that far, so many of the potential customers were just waiting for it to finally launch in the US causing the sales to slow down even more.
2025 Tesla Model Y
On January 23, 2025, Tesla officially introduced the 2025 Model Y in the US. However, the company only released the premium “Launch Series” version, which comes with a hefty price tag of $59,990. This price includes Full Self-Driving (FSD) capability and the buyer’s choice of color and wheels. While this offering caters to high-end customers, it limits accessibility for many potential buyers.
On top of that, the Launch Series Model Y leasing price saw a significant jump compared to the regular Model Y, almost doubling the price, making it an even less ideal choice. The Launch Series costs $699 per month, whereas the standard LR AWD costs only $399.
Delivery Timelines and Affordability Concerns
Tesla plans to begin delivering the Launch Series in March. However, more affordable trims without FSD and additional features are unlikely to be available until late Q1 or early Q2. This means that customers who have already waited for the updated Model Y will face further delays if they are looking for a more budget-friendly option.
The only reason some people might consider buying the car right now is the chance that the $7,500 EV credit could be removed at any time under the Trump administration. This uncertainty could push some buyers to take advantage of the credit before it’s potentially too late.
Tesla has held the title of the best-selling car in the world for two consecutive years with the Model Y. However, with the launch of the Juniper seeing a jump in prices and the EV tax credit being under threat among the other reasons, there is a chance Tesla might not be able to keep this streak.
