Tesla’s once-efficient global supply chain is turning into a significant challenge as new U.S. tariffs on Chinese imports disrupt production plans across multiple models. The latest setback comes with the delay of Tesla’s long-anticipated cheaper version of the Model Y, which had been aimed at making the EV giant more competitive in price-sensitive markets.
Initially, industry speculation suggested that this affordable Tesla would be a completely new hatchback model, designed to rival competitors like BYD Dolphin and Volkswagen ID.3. However, new reports confirm that the upcoming version is actually a scaled-down Model Y — featuring smaller battery packs, reduced performance, and trimmed-down hardware like display screens.
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In parallel, Tesla has also scrapped its plans to ship parts for the Cybercab and Semi from China, citing soaring tariffs as the main reason. This decision is expected to impact the production timelines at the company’s Texas and Nevada Gigafactories, where these vehicles were scheduled for trial production by October 2025 and full-scale production in 2026.
Market analysts, including Future Fund’s Gary Black, argue that the delay of the cheaper Model Y may ultimately benefit Tesla’s financial health, as it avoids cutting into the sales of its higher-margin models — especially in a turbulent economic environment shaped by global trade tensions.
