What Happened: The slowdown in EV sales, as per Scaringe, is largely owing to the ‘truly extreme’ lack of choice within the U.S. EV market for vehicles priced under $50,000.
“If you want to spend less than $50,000 for an EV, I'd say there's a very, very small number of great products. Tesla Model 3 and Model Y are highly compelling, great products, but they don't have a lot of competition,” Scaringe said in an interview with The Verge.
While other EV makers have tried to make EVs that fit the below $50,000 price range, they “unfortunately” replicated the shape and overall proportions of the Model Y such that it ultimately provides no choice to the customer, the CEO opined.
“Ironically, because of the Model Y's success, you have a lot of incumbents that have built products that look and feel and are shaped a lot like a Model Y. That's very different from the internal combustion space where you have hundreds of choices, lots of brands, lots of variety of form factors,” Scaringe said.
Model Y is Tesla’s best-selling vehicle, seconded by its mass-market sedan Model 3. The Model Y starts at $44,990 for the base version in the U.S. while the Model 3 starts at $38,990.
R2 is expected to go into production in early 2026.
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