Tesla Stock Is Sliding Monday: What's Driving The Action?

Tesla Inc TSLA shares are trading lower Monday following reports that the company has postponed plans for an affordable version of its Model Y SUV.

What To Know: According to a Reuters report citing three sources with knowledge of the matter, Tesla has delayed the launch of a U.S.-made, stripped-down version of its Model Y that was originally planned for the first half of the year.

The report indicates that production of the lower-cost version of the Model Y, codenamed E41 internally, is expected to begin at least a few months later than Tesla previously forecasted. New timelines suggest the affordable model could enter production sometime between the third quarter and early next year.

People familiar with the matter reportedly said Tesla was aiming to produce 250,000 stripped-down Model Ys in the U.S. in 2026. The company also plans to produce the vehicle in China and Europe eventually. The vehicle is expected to cost about 20% less to make than the latest refreshed version.

The sources didn’t provide a reason for the delay, but the news comes amid rising global trade tensions following the Trump administration’s sweeping reciprocal tariffs on a slew of nations.

The report also indicates that Tesla is planning to launch a basic version of its Model 3 sedan. CEO Elon Musk previously said the company would offer vehicles priced as low as $25,000, but he suggested the company had shifted its focus to robotaxi development instead during the company’s third-quarter earnings call.

"I think having a regular $25,000 model is pointless. Yeah, it would be silly,” Musk said on the call.

Check This Out: Tesla Q1 Test Drive: Will Earnings Steer The Stock Out Of The Ditch?

Tesla is due to report first-quarter financial results after the market close on Tuesday. Analysts expect the EV maker to report earnings of 41 cents per share and revenue of $21.35 billion, according to estimates from Benzinga Pro.

Tesla reported its first decline in annual deliveries at the beginning of the year. Analysts expect annual sales to decline again in 2025 for multiple reasons, including potential brand damage related to Musk’s close ties to the Trump administration.

Automakers are facing higher prices and potential supply-chain disruptions due to tariffs. Reuters reported that Tesla has ramped up North American parts sourcing in recent years, which could lower tariff exposure for the lower-cost Model Y, known internally as E41.

TSLA Price Action: Tesla shares were down 5.29% at $228.45 at the time of publication Monday, according to Benzinga Pro.

Read Next:

• Tesla Battery Supplier CATL Unveils New Fast-Charging Battery With 323-Mile Range In Five Minutes

Photo: courtesy of Tesla.