Tesla offers cheaper versions of 2 electric vehicles in bid to win back market share in tough year

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NEW YORK (AP) — Tesla rolled out new, cheaper versions of two of its electric car models on Tuesday in hopes the offerings will help revive flagging sales.

The new Model Y, costing just under $40,000 with a stripped-down interior, follows a slump in Tesla sales covering most of the past year due to anti-Elon Musk boycotts targeting the company. The company is also offering a cheaper version of its Model 3 for under $35,000.

The company is under intense pressure to lift sales but is facing big challenges. In addition to anti-Musk backlash, it is contending with a likely hit to demand after a federal tax credit worth as $7,500 for EV purchases expired at the end of September.

Tesla stock fell more than 2.5% to $441.08 in late afternoon trading Tuesday. It had closed Monday up more than 5% after the company teased fans with cryptic postings on social media about an imminent product announcement.

The stock has been trading near all-time highs even though both sales and profits have plunged in recent quarters.

Compared to previous models, the new Model Y comes with a shorter 321-mile driving range, fewer audio speakers and a fabric interior, not microsuede. The model also lacks a panoramic glass roof and a touchscreen in the second row.

The new Model 3 has also cut down on the driving range, ambient lighting and other features.

The new Model Y faces stiff competition in the $40,000 range for EVs from vehicles including Ford’s Mustang Mach-E, Chevrolet’s Equinox EQ and Hyundai’s Ioniq 5.