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Tesla’s launch of Model Y RWD is the nail in the coffin at the worst time for legacy auto
Tesla’s launch of the Model Y Rear-Wheel-Drive (RWD) comes at perhaps the worst time for legacy automotive companies. It is affordable, comparable to similar models from competitors, and is perhaps the nail in the coffin, especially for the U.S. market, as it is an affordable car that features some of the best add-ons that EV buyers could need.
Last night, Tesla launched the Model Y RWD on its website, and with federal and local incentives, it could cost buyers under $31,000 as it qualifies for the full EV tax credit from the government. Packing the LFP, or lithium iron phosphate battery pack, Tesla has brought its most popular car to an affordable level with reasonable range ratings and more than acceptable performance metrics.
While it was a timely offering in terms of Tesla’s trek for 1.8 million deliveries this year after a lackluster Q3 due to factory upgrades that required production pauses, this vehicle offers the automaker two things:
- A new mode of demand for the Model Y, especially in the U.S. market, where it has already been extremely popular
- Another edge over the already-frustrated competition, which is falling further behind due to a number of factors, and has already thrown in the towel to Tesla and will use its Superchargers next year because developing infrastructure is difficult
Of course, the Model Y RWD is not the best crossover out there. We would likely reserve this for the Long Range version of the Model Y, which offers more travel distance per charge and better performance metrics.
That’s not to say that the Model Y RWD is something worth overlooking because, for many, it is the answer to the question they’ve had: how will I put the most popular EV in the U.S. in my driveway for roughly $35,000?
This was Tesla’s answer.
Obviously, there is no shortage of people who are at least thinking about buying an EV. Recent figures have shown that Tesla commands the U.S. EV market by a considerable margin, and although it seems there is still plenty of demand for its vehicles in the North American market, Tesla still has to find ways to cater to customers who need certain vehicles at certain price points.
The Long Range Model Y is an ideal car for most people and families. Crossovers are an extremely sought-after body style in this market, but they come at a price. Give someone who needs a crossover EV at a price they cannot pass up and pack on the world’s most expansive charging network on top of it, and it is simply not a matter of whether people will buy it. It’s a matter of when, and how many will be bought.
It is no secret that people may be somewhat worried that Tesla may not reach its 1.8 million unit delivery goal for the year. Even with the Model 3+, or Highland, whatever you want to call it, starting deliveries this month in Europe, Asia, and the Middle East and the Cybertruck likely beginning deliveries soon, there still needs to be some movement in the U.S. market.
Cybertruck deliveries are likely going to be somewhat small for the last quarter of the year, and Highland will contribute plenty of units to the Q4 figures, but the U.S. is still where Tesla dominates the most, but neither of these vehicles are available here yet.
Enter the Model Y RWD as the nail in the coffin for companies that are either striking due to UAW demands for better wages and benefits, or are struggling with EV software and quality, or just an overall lack of awareness in terms of the auto market.
Yes, there are some people out there that have no interest in an EV. However, there are plenty that are. Ford, GM, and Stellantis are not building any in the U.S. currently because of the UAW strike, Volkswagen may have some things to offer, but it hasn’t chosen to adopt the NACS charging connector to gain access to the Supercharger network. Hyundai is still early in its EV venture, and the IONIQ is certainly an attractive option, but the Model Y RWD will trump it because of its price and Tesla’s overall advantages, including charging and overall EV prowess.
We have talked plenty about nails in the coffin for EV makers before, but with a new demand trigger with the Model Y RWD for Tesla and Detroit pausing EV production while the terms of a new UAW contract get worked out, this is spelling nothing but trouble for Tesla’s competitors.
The Model Y RWD has opened a new can of worms for competitors to try and combat. Right now, at least in the U.S., it’s Tesla’s world, and competitors are just living in it.
I’d love to hear from you! If you have any comments, concerns, or questions, please email me at joey@teslarati.com. You can also reach me on Twitter @KlenderJoey, or if you have news tips, you can email us at tips@teslarati.com.
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Tesla taps Samsung for 5G modems amid plans of Robotaxi ramp: report
The move signals Tesla’s growing focus on supply-chain diversification and next-generation communications as it prepares to scale its autonomous driving and robotaxi operations.
A report from South Korea has suggested that Samsung Electronics is set to begin supplying 5G automotive modems to Tesla. If accurate, this would mark a major expansion of the two companies’ partnership beyond AI chips and into vehicle connectivity.
The move signals Tesla’s growing focus on supply-chain diversification and next-generation communications as it prepares to scale its autonomous driving and Robotaxi operations.
Samsung’s 5G modem
As per industry sources cited by TheElec, Samsung’s System LSI division has completed development of a dedicated automotive-grade 5G modem for Tesla. The 5G modem is reportedly in its testing phase. Initial supply is expected to begin in the first half of this year, with the first deployments planned for Tesla’s Robotaxi fleet in Texas. A wider rollout to consumer vehicles is expected to follow.
Development of the modem began in early 2024 and it required a separate engineering process from Samsung’s smartphone modems. Automotive modems must meet stricter durability standards, including resistance to extreme temperatures and vibration, along with reliability over a service life exceeding 10 years. Samsung will handle chip design internally, while a partner company would reportedly manage module integration.
The deal represents the first time Samsung has supplied Tesla with a 5G vehicle modem. Tesla has historically relied on Qualcomm for automotive connectivity, but the new agreement suggests that the electric vehicle maker may be putting in some serious effort into diversifying its suppliers as connectivity becomes more critical to autonomous driving.
Deepening Tesla–Samsung ties
The modem supply builds on a rapidly expanding relationship between the two companies. Tesla previously selected Samsung’s foundry business to manufacture its next-generation AI6 chips, a deal valued at more than 22.7 trillion won and announced in mid-2025. Together, the AI chip and 5G modem agreements position Samsung as a key semiconductor partner for Tesla’s future vehicle platforms.
Industry observers have stated that the collaboration aligns with Tesla’s broader effort to reduce reliance on Chinese and Taiwanese suppliers. Geopolitical risk and long-term supply stability are believed to be driving the shift in no small part, particularly as Tesla prepares for large-scale Robotaxi deployment.
Stable, high-speed connectivity is essential for Tesla’s Full Self-Driving system, supporting real-time mapping, fleet management, and continuous software updates. By pairing in-vehicle AI computing with a new 5G modem supplier, Tesla appears to be tightening control over both its hardware stack and its global supply chain.
Tesla’s new Full Self-Driving pricing strategy will eliminate one recurring complaint that many owners have had in the past: FSD transfers.
In the past, if a Tesla owner purchased the Full Self-Driving suite outright, the company did not allow them to transfer the purchase to a new vehicle, essentially requiring them to buy it all over again, which could obviously get pretty pricey.
This was until Q3 2023, when Tesla allowed a one-time amnesty to transfer Full Self-Driving to a new vehicle, and then again last year.
Tesla is now allowing it to happen again ahead of the February 14th deadline.
The program has given people the opportunity to upgrade to new vehicles with newer Hardware and AI versions, especially those with Hardware 3 who wish to transfer to AI4, without feeling the drastic cost impact of having to buy the $8,000 suite outright on several occasions.
Now, that issue will never be presented again.
Last night, Tesla CEO Elon Musk announced on X that the Full Self-Driving suite would only be available in a subscription platform, which is the other purchase option it currently offers for FSD use, priced at just $99 per month.
Tesla is shifting FSD to a subscription-only model, confirms Elon Musk
Having it available in a subscription-only platform boasts several advantages, including the potential for a tiered system that would potentially offer less expensive options, a pay-per-mile platform, and even coupling the program with other benefits, like Supercharging and vehicle protection programs.
While none of that is confirmed and is purely speculative, the one thing that does appear to be a major advantage is that this will completely eliminate any questions about transferring the Full Self-Driving suite to a new vehicle. This has been a particular point of contention for owners, and it is now completely eliminated, as everyone, apart from those who have purchased the suite on their current vehicle.
Now, everyone will pay month-to-month, and it could make things much easier for those who want to try the suite, justifying it from a financial perspective.
The important thing to note is that Tesla would benefit from a higher take rate, as more drivers using it would result in more data, which would help the company reach its recently-revealed 10 billion-mile threshold to reach an Unsupervised level. It does not cost Tesla anything to run FSD, only to develop it. If it could slice the price significantly, more people would buy it, and more data would be made available.
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Tesla Model 3 and Model Y dominates U.S. EV market in 2025
The figures were detailed in Kelley Blue Book’s Q4 2025 U.S. Electric Vehicle Sales Report.
Tesla’s Model 3 and Model Y continued to overwhelmingly dominate the United States’ electric vehicle market in 2025. New sales data showed that Tesla’s two mass market cars maintained a commanding segment share, with the Model 3 posting year-to-date growth and the Model Y remaining resilient despite factory shutdowns tied to its refresh.
The figures were detailed in Kelley Blue Book’s Q4 2025 U.S. Electric Vehicle Sales Report.
Model 3 and Model Y are still dominant
According to the report, Tesla delivered an estimated 192,440 Model 3 sedans in the United States in 2025, representing a 1.3% year-to-date increase compared to 2024. The Model 3 alone accounted for 15.9% of all U.S. EV sales, making it one of the highest-volume electric vehicles in the country.
The Model Y was even more dominant. U.S. deliveries of the all-electric crossover reached 357,528 units in 2025, a 4.0% year-to-date decline from the prior year. It should be noted, however, that the drop came during a year that included production shutdowns at Tesla’s Fremont Factory and Gigafactory Texas as the company transitioned to the new Model Y. Even with those disruptions, the Model Y captured an overwhelming 39.5% share of the market, far surpassing any single competitor.
Combined, the Model 3 and Model Y represented more than half of all EVs sold in the United States during 2025, highlighting Tesla’s iron grip on the country’s mass-market EV segment.
Tesla’s challenges in 2025
Tesla’s sustained performance came amid a year of elevated public and political controversy surrounding Elon Musk, whose political activities in the first half of the year ended up fueling a narrative that the CEO’s actions are damaging the automaker’s consumer appeal. However, U.S. sales data suggest that demand for Tesla’s core vehicles has remained remarkably resilient.
Based on Kelley Blue Book’s Q4 2025 U.S. Electric Vehicle Sales Report, Tesla’s most expensive offerings such as the Tesla Cybertruck, Model S, and Model X, all saw steep declines in 2025. This suggests that mainstream EV buyers might have had a price issue with Tesla’s more expensive offerings, not an Elon Musk issue.
Ultimately, despite broader EV market softness, with total U.S. EV sales slipping about 2% year-to-date, Tesla still accounted for 58.9% of all EV deliveries in 2025, according to the report. This means that out of every ten EVs sold in the United States in 2025, more than half of them were Teslas.
Tesla taps Samsung for 5G modems amid plans of Robotaxi ramp: report
Tesla Full Self-Driving pricing strategy eliminates one recurring complaint
