Tesla Poised to Launch Lower-Cost Model Y Variant

Tesla (TSLA, Financials) is gearing up to introduce a more budget-friendly version of its best-selling Model Y SUV, according to Bloomberg. The move comes as U.S. buyers lose access to a major $7,500 federal tax credit, which has raised the effective cost of Tesla's vehicles.

People familiar with the plan said Tesla trimmed expenses by using simpler materials and redesigning parts of the battery pack and motor. Over the weekend, the company hinted at the new model with short teaser clips one featuring a spinning shape ending in the date 10/7, and another showing headlights cutting through a black background.

Elon Musk has long pushed for lower prices to make Tesla vehicles more attainable.He joked about "letting the cat out of the bag" on the company's most recent earnings call, but he also said that many purchasers are being priced out of the Model Y, even though demand in it is still high.Reports suggest that the new model went into production in June, but Tesla didn't publicly release it until the tax benefits ran gone.

A cheaper Model Y could help Tesla stay competitive as more automobile companies enter the EV market with cheaper options. Investors will want to know the prices and delivery dates once the corporation makes the official announcement.