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Affordable car meant to reverse falling sales, waning

market

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Unveil comes days after key US EV tax credits expired

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Social media abuzz since Tesla's teaser clips over the

weekend

By Abhirup Roy

Oct 7 (Reuters) - Tesla is expected to unveil

on Tuesday a more affordable version of its best-selling Model Y

SUV, as the electric vehicle maker seeks to reverse falling

sales and waning market share amid rising global competition.

Chief Executive Elon Musk for years has promised mass market

vehicles, though last year he canceled plans to build an all-new

$25,000 EV, Reuters first reported. The car expected this week

is an "affordable" vehicle based on current manufacturing and

design platforms.

Tesla posted two clips on X over the weekend, igniting

excitement among Tesla fans. One video shows headlights peering

out of the dark and another shows what looks like a wheel

spinning for a few seconds, followed by "10/7", the U.S. format

for the date October 7.

Neither Tesla nor influencers have indicated that an in-person

event is in the works, in contrast to previous major Tesla

launches. Still, analysts, investors and fans expect the company

to make some kind of announcement.

Major questions include the car's price, driving range and

efforts to strip down costs. Late last year, Musk said the

vehicle would be priced below the "key threshold" of $30,000

including U.S. EV tax credits.

In the United States, prices effectively rose by $7,500 at the

end of last month, when the credit ended. That helped goose

quarterly sales to a record, but expectations are that they will

slow down for the rest of the year, unless the affordable car

comes to the rescue.

"The desire to buy the car is very high. (It's) just (that)

people don't have enough money in the bank account to buy it,"

Musk said in July during Tesla's second-quarter earnings call.

"So the more affordable we can make the car, the better."

Musk initially promised that production of the vehicle would

start by the end of June. But Tesla only made what it called

"first builds" of the car, it said in July, adding that it would

be available for customers sometime in the last three months of

the year.

Tesla has already been grappling with slowing sales of its aging

lineup as competition has grown rapidly, especially in China and

Europe, where Musk's far-right political views also have

undermined brand loyalty.

Earlier this year, Tesla launched a refreshed version of the

Model Y with improvements including new light bars and a rear

touchscreen.

Musk has been pivoting the company toward artificial

intelligence, focusing on robotaxis and humanoid robots. Tesla

has said it will launch more affordable vehicles in its lineup

but has not provided details. Sources have told Reuters the EV

maker also plans to roll out a stripped-down version of its

Model 3 midsize sedan.

Affordable cars will also be key to Tesla delivering 20 million

vehicles over the next decade - one of the several operational

and valuation milestones set by the company's board as part of

its proposed $1 trillion pay package for Musk.