Tesla is surprising buyers after unveiling its most affordable Model Y small electric SUV iteration since Spring 2024.
Nameplate prices tend to increase with every model (and redesign) to compensate for inflation and the cost of upgrades. Tesla took a step backwards, making its newest Model Y more affordable than the previous generation in some cases. How much does the 2025 Tesla Model Y cost and why is it suddenly so affordable?
The 2025 Tesla Model Y Rear-Wheel Drive starts at $44,990 before incentives
There are only two 2025 Tesla Model Y options available for U.S. car buyers per the company’s website as of May 9. The new Long Range Rear-Wheel Drive trim starts at $44,990, or just $37,490 after the federal EV tax incentive. Some states like New Jersey offer an additional income-based incentive of $2,000, bringing the Model Y Long Range RWD’s price down to $35,490.
Meet the new Model Y
Maximum efficiency. Smoother rides. All-new interior.
New on the outside:
– Redesigned exterior with improved aerodynamics to unlock better range, performance & longevity– Updated wheels, tires & brakes + retuned suspension for a smoother ride
Our… pic.twitter.com/Fk40KzvP8m
— Tesla (@Tesla) January 24, 2025
The Long Range All-Wheel Drive model starts at $48,990 or $39,390 after the EV tax incentive. No Performance trim is offered on the 2025 Model Y, unlike previous model years. The affordable Model Y RWD is a great deal, considering the fact that the small electric SUV achieved international best-selling car status in 2023, according to Kelley Blue Book.
2025 Tesla Model Y trim breakdown
The Tesla Model Y Long Range Rear-Wheel Drive boasts more driving range than the all-wheel drive model, but it isn’t as quick. It achieves an Environmental Protection Agency-estimated 357 miles of driving range on a full battery. That’s impressive by today’s standards, since most base model mainstream EVs can’t get more than 300 miles on a single charge. The rear-wheel drive trim accelerates from 0-60 miles per hour in 5.4 seconds.
Tesla’s more expensive all-wheel drive trim has an EPA-estimated 327 miles of driving range (30 miles less than the RWD). That said, it rockets from 0-60 miles per hour in just 4.6 seconds. All-wheel drive SUVs also tend to get better traction than rear-wheel drive models, trading efficiency for capability.
Why is the 2025 Tesla Model Y RWD so affordable?
Tesla has been slashing prices on Model Y trims in the last few quarters, making the small electric SUV more affordable and thus more appealing to the masses. On the other hand, Tesla stock fell from $379.28 on January 2 to $221.86 on April 8. That’s a decrease of 41.50% over the course of a single business quarter.
Additionally, Tesla sales are down in eight of the 10 largest EV markets in Europe, proving that growing anti-Musk/Tesla sentiment is having a global impact on sales. So it would be remiss to disregard the company’s stock and sales issues as part of the reason why the new rear-wheel drive iteration of the Model Y is so affordable. Furthermore, the Model Y is the most American-made car in terms of assembly, so it’s better-positioned to endure tariffs than several automakers, including Ford.
Tesla troubles: Amid tough year, Tesla releases a new, cheaper version of the Model Y
Is the 2025 Tesla Model Y a good SUV to get?
How does the 2025 Model Y fare against competitors in the U.S. market? While it’s a sales leader in the small electric SUV segment, there are several alternatives that offer great value for the money.
Tesla Model Y rivals
2025 Kia EV6 (Starting MSRP: $42,900)
2025 Hyundai Ioniq 5 (Starting MSRP: $42,600)
2025 Volkswagen ID.4 (Starting MSRP: $45,095)
2025 Chevrolet Equinox EV (Starting MSRP: $34,995)
*These prices do not include the federal electric vehicle tax incentive or additional incentives.
Hyundai Motor Company produces two of the most competitive small electric SUVs: the Kia EV6 via its Kia brand and the Hyundai Ioniq 5. Both models are affordable for the segment and are appealing to drivers in their own ways. The EV6 is a sportier SUV with a more dynamic body style. The Ioniq 5 is a family SUV that nails the basics including driving dynamics. It’s a mainstream alternative to the popular Tesla Model Y.
The Volkswagen ID. 4 is an international Model Y rival and a serious contender in the European market. It offers a comfortable ride quality, smooth handling, and a quiet cabin, according to U.S. News & World Report. Chevy’s small electric SUV, the Chevrolet Equinox EV is the “best value for an EV right now” due to its low starting price, Edmunds reported.
Despite all the controversy that Tesla is experiencing due to Elon Musk’s political exploits, the Tesla Model Y remains a fierce competitor. Luckily for consumers, it’s far from the only attractive option in its segment.
This article originally appeared on USA TODAY: The 2025 Tesla Model Y is cheaper than ever but is it worth buying?
