Tesla has expanded its U.S. lineup with a new rear-wheel-drive variant of the Model Y priced at $41,990, according to the company’s website. The latest offering undercuts the previous base configuration by approximately $4,000, positioning Tesla aggressively in the mid-sized SUV segment. Production is slated to begin in the coming weeks at Giga Texas, with initial deliveries expected in California and Texas. The move reflects Tesla’s strategy to broaden its addressable market and counter pricing pressure from competing electric vehicle manufacturers.

In its fourth-quarter report, Tesla posted total revenue of $24.901 billion, a 3 percent year-over-year decline that fell short of the consensus estimate of $25.1 billion. Automotive segment revenue, which remains the largest contributor, plunged 11 percent to $17.693 billion, while energy generation and storage climbed 25 percent and services and other activities rose 18 percent. Adjusted earnings per share came in at $0.50, topping expectations by $0.05 but representing a 17 percent decline from the prior year. The mixed results sent shares lower in after-hours trading as investors weighed the risk of prolonged margin compression.

CEO Elon Musk outlined a capital expenditure program exceeding $20 billion in 2026, with significant investments earmarked for AI training compute at Gigafactory Texas, including a plan to more than double on-site H100 equivalent capacity. Major upgrades to the Optimus humanoid robot, including the forthcoming Gen 3 version, are set to be unveiled this quarter. Concurrently, Tesla will cease production of the Model S and Model X to free up capacity for next-generation robotics and autonomy initiatives. Analysts warn that the aggressive spending profile will require Tesla to demonstrate tangible returns on its AI and robotics ventures to sustain its premium valuation.

January new-vehicle registration data showed Tesla experiencing divergent trends across key markets. In Europe, registrations in France and Norway declined by double-digits compared with the same month last year, while Sweden and Denmark recorded modest gains. By contrast, Italy saw a remarkable 75 percent year-over-year increase in registrations following an 18 percent drop over the full year of 2025. Fierce local competition and pricing adjustments have been cited as drivers of the European slump, whereas targeted incentives and improved delivery logistics bolstered Tesla’s performance in Italy.