The entry-level Tesla Model Y RWD has been discontinued in the U.S., as the manufacturer launched a Long-Range RWD version of the car.

This move has been accompanied by an announcement that the discontinued Tesla Model Y RWD will get a special range boost option, pending regulatory approvals.

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40-60 more miles of range

The Tesla Model Y RWD (at least some of the cars) will get an option to unlock full battery capacity and increase the driving range by 40-60 miles. The cost is expected to be $1,500-$2,000.

According to Tesla's CEO Elon Musk, the Tesla Model Y RWD with an EPA range of 260 miles can gain 40 to 60 miles of additional range ("depending on which battery cells") with an upcoming paid boost, which will be offered for $1,500 to $2,000 (through over-the-air software update).

Tesla's boss revealed—indirectly— that the RWD cars produced over the past several months already were equipped with a battery pack of higher capacity, which means that they were software-limited to offer 260 miles: "The “260-mile” range Model Y’s built over the past several months have more range that can be unlocked for $1500 to $2000 (gains 40 to 60 miles of range), depending on which battery cells you have. Working through regulatory approvals to enable this."

 

This means that Tesla Model Y RWD owners who decide to pay for the range boost will get a driving range similar to those who will buy the newly introduced Tesla Model Y Long Range RWD—300-320 miles or so.

The Tesla Model Y RWD with 260 miles of range was offered for $44,990 (plus $1,640 in obligatory cost) before the $2,000 price cut to $42,990 in mid-April. The effective cost after the recent $7,500 federal tax credit was $37,130.

The new Model Y LR AWD starts at $44,990 plus $1,640 in obligatory fees, effectively $39,130 after, including a $7,500 federal tax credit.

Elon Musk did not answer the question in the comments as to why the battery capacity was limited. He only replied to a question "Why not just give it for free?" by answering that with "We have to pay the bills somehow".

 

The move from RWD to Long Range RWD Tesla Model Y is interesting. It seems that it was planned for months, and now all Tesla Model Ys are equipped with Long Range batteries. However, the battery cells (cylindrical 2170-type) might be supplied by more than one company with small capacity differences between the packs (Panasonic, LG Energy Solution, or others).

We initially thought that the RWD version was equipped with the LFP batteries when Tesla launched the model in October 2023. It could be the case at the beginning. However, potentially because of the $7,500 tax credit incentive's requirements in 2024, Tesla probably had to resign from the LFP and return to locally produced 2170-type cylindrical cells.

They were potentially weighing options, observing news related to the tax credit, and finally decided to reveal the cards.

One of the main things is that customers will get a less expensive long-range Tesla Model Y, some $3,000 under the Tesla Model Y Long Range AWD. It's not a trivial thing in 2024 when price pressure affects all EVs.

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