Tesla has officially launched a new version of its popular Model Y SUV, introducing a more affordable Long Range Rear-Wheel Drive (RWD) trim that is set to stir excitement among consumers looking for electric vehicles (EVs). On May 7, 2025, Tesla opened orders for the new RWD model, which starts at $46,630, including a destination fee of $1,390 and an order fee of $250. This price point is a significant $4,000 lower than the existing Long-Range All-Wheel Drive (AWD) variant, which has a base price of $50,380.
The redesigned Model Y, which first went on sale earlier this spring, initially only offered the top-tier Launch Series trim, priced at around $60,000. However, with the discontinuation of the Launch Series in early April, Tesla is now focusing on providing more budget-friendly options. The new Long Range RWD model not only comes with a lower price tag but also boasts an impressive EPA-estimated range of 357 miles, which is 30 miles more than the AWD version. This makes it an appealing choice for those who prioritize range in their electric vehicle.
Despite being slower than its AWD counterpart, the Long Range RWD model still offers respectable performance. It accelerates from 0 to 60 mph in 5.4 seconds, which is 0.8 seconds slower than the AWD version's 4.6 seconds. The single-motor setup on the rear axle provides a top speed of 125 mph, making it relatively quick for a compact SUV.
Deliveries for the new Model Y Long Range RWD are expected to begin within three to five weeks from the order opening date, providing a timely option for consumers eager to get behind the wheel of a new electric vehicle. In addition to the new trim, Tesla has also launched a financing deal with a 1.99% interest rate on Long-Range AWD models purchased after May 2, 2025, requiring a minimum down payment of 15%.
The introduction of the Long Range RWD model comes at a crucial time for Tesla, as the company has been facing challenges in maintaining its sales momentum. Reports indicate that Tesla has experienced its worst sales figures in three years, a situation exacerbated by growing protests against CEO Elon Musk. The need for more affordable EVs is evident, especially as sales have not met expectations in Europe, where the cheaper Model Ys launched in February. In the UK, for instance, Tesla's sales plummeted by 62% in April 2025.
In China, the situation is similarly concerning, with deliveries dropping by 26% compared to March 2025. Analysts suggest that the decline in sales may be attributed to a growing preference for cheaper, technology-rich domestic models among Chinese consumers. As Tesla navigates these challenges, the hope is that the new Long Range RWD model will help reverse its fortunes in both domestic and international markets.
The Model Y Long Range RWD also includes several features that enhance its appeal. It comes standard with 19-inch wheels, and while upgrading to 20-inch rims is an option, it reduces the estimated maximum range to 344 miles and adds an additional cost of $2,000. Tesla offers several customization options, including Full Self-Driving capabilities for an extra $8,000 and a tow package for $1,000, allowing the electric crossover to pull up to 3,500 pounds.
While the new Model Y is certainly a step in the right direction, it still does not meet the anticipated $25,000 price point that Tesla had previously promised for a more affordable EV. Currently, the cheapest model in Tesla's lineup remains the Model 3, which starts at $44,130 and offers a range of up to 363 miles.
As the automotive market continues to evolve, Tesla's ability to adapt and introduce more affordable options will be crucial for maintaining its position as a leader in the electric vehicle sector. With the launch of the Long Range RWD Model Y, the company is not only responding to consumer demand for lower-priced vehicles but also attempting to regain its footing in a competitive market.
The Model Y has already made waves since its initial launch, and with this new variant, Tesla aims to capture a broader audience. The combination of affordability, extended range, and performance makes the Long Range RWD model an attractive choice for those considering an electric SUV.
As Tesla continues to innovate and expand its offerings, the success of the Model Y Long Range RWD could play a significant role in the company's future. The market will be watching closely to see if this new entry can help revitalize Tesla's sales and restore confidence among investors and consumers alike.
