Tesla’s highly anticipated plans for an affordable electric vehicle (EV) have hit a snag. Sources familiar with the situation confirmed to Reuters that the production of a stripped-down version of the company’s popular Model Y, aimed at reducing costs, has been delayed in the U.S.

Originally slated for the first half of 2025, Tesla had promised the launch of a lower-cost EV, hoping to revive flagging sales with a more budget-friendly alternative to its high-end electric models. This new version of the Model Y, codenamed E41, is expected to begin production in the U.S., but it will now likely start several months later than initially expected.

Tesla’s move to create a more affordable Model Y follows the company’s broader push to capture a wider market. While the delay may be disappointing for many prospective buyers, the lower-cost Model Y still holds significant promise as a game-changer in the EV market, potentially attracting more consumers who have been hesitant to purchase higher-priced electric vehicles.

As the market for affordable electric vehicles continues to grow, Tesla’s ability to fulfill its commitment to making EVs more accessible could play a pivotal role in its future success. However, the delayed launch may challenge the company’s ability to maintain momentum in a competitive electric vehicle market.