Just weeks after the launch of the Model Y refresh, a slightly newer version of the five-year-old crossover, Tesla informed buyers on Sunday they can already have the car at a discounted financing rate. Interested buyers can qualify for a six-year loan at 1.99% if they put down $3,999 for the purchase of a long-range all-wheel-drive version. By contrast, financing rates for some of Tesla’s upscale models top 6%.

1.99% APR available for new Model Y Long Range AWD orders

US only / 72 months https://t.co/N83kkkSWyp

— Tesla North America (@tesla_na) May 3, 2025

The Y officially celebrated its refresh in March. But in the first four weeks, Tesla filled orders only for its $59,990 limited-edition Launch Series meant for early adopters and other loyal Tesla fans. The much cheaper long-range AWD version that starts at $48,990 has been available only since early April.

Incentivizing demand after just four weeks in the market suggests any appetite for the model at full price and the going market interest rate has already been largely absorbed. Tesla did not cite a reason and did not respond to a request from Fortune for comment.

From supply-constrained to demand-constrained

Tesla has suffered multiple crises in the past, but they typically revolved around whether it could scale production to meet existing demand. In order to avoid being swamped with more orders than it could ever hope to fill, Tesla regularly made its cars continuously more expensive and kept customers waiting for months.

Now the problem is not whether it has enough supply, but how to utilize all the production capacity it already has now that new orders have dropped off. Prospective customers in Silicon Valley’s Palo Alto don’t have to wait even 24 hours to take delivery. A brand-new Model Y refresh can be theirs the very same day they sign the down payment. 

Some owners even advise interested buyers to wait until the end of the quarter before placing an order, as an increasingly desperate Tesla tends to ramp up incentives to ensure volumes don’t disappoint the stock market.

The chief culprit behind the steep plunge in demand is none other than Musk himself. First he chose to refocus the company around an all-in bet on robotics—canceling development of a new $25,000 entry model after his vaunted Cybertruck flopped. Then he emphatically supported a deeply unpopular Trump administration, costing him customers. 

Initial data show Tesla’s European vehicle sales nosedived in April

With his job at DOGE now effectively over after failing to generate any meaningful savings for U.S. taxpayers on balance, Musk returns to his company this month to find Tesla the target of a damaging boycott as progressive customers opposed Musk’s chainsaw approach to streamlining the federal government.

In retaliation for his ham-fisted efforts, EV buyers are steering clear of both Tesla and the Model Y even though it now sports a fresher look. This could prove devastating to Tesla, as the vehicle is absolutely vital to its business. Manufactured in four plants on three continents, it is responsible for two out of every three cars the brand delivers. Any weakening in demand for the Y would result in a precipitous decline in the company’s sales volume.

Musk’s business in Europe, where there is far more competition for EV buyers, already appears to be in a state of collapse. Tesla sales plummeted last month in several affluent and EV-friendly markets, where deliveries to customers declined between 50% and 80% as buyers shifted to rivals like the new Volkswagen ID.7 electric sedan.

Tesla has never replaced any of its aging models, focusing instead on software updates

Any normal car company would have long since replaced its existing product lineup with entirely new ones to remain competitive, not to mention expand its offerings. But Musk, who sees Tesla as a tech company, has never once bothered to invest in a vehicle redesign.

Underneath, the Model S still shares the same construction as the first one that rolled off the line in 2012; ditto for all of Tesla’s other vehicles. Only minor design touches and updated interiors have been added to minimize cost. 

Tesla has instead emphasized its ability to remain competitive in the EV marketplace through raw material cost savings, sticker price cuts, and, importantly, software updates. This includes its advanced driver assist feature known as FSD Supervised, which runs entirely on artificial intelligence.

Everything rides on Tesla scaling its robotaxi fleet this year

For investors, Tesla is swiftly becoming a binary bet on whether Musk’s AI is so potent that it’s on the verge of disrupting the global ride-hailing industry. That’s if FSD can drive without human supervision. 

It could be his final chance. Three years ago, Musk warned solving autonomous driving was essential: “That’s really the difference between Tesla being worth a lot of money and being worth basically zero.”

The first limited robotaxi pilot program is scheduled for next month in Austin. With a small fleet of only 10 to 20 vehicles, the mathematical odds of a crash occurring ought to be fairly low.

The question facing investors in the $900 billion company is whether Tesla can rapidly scale this business to reach most parts of the nation in the coming months, like Musk promised, without risking dangerous accidents in the process.

As the most expensive member of the Magnificent 7 by far, Tesla is priced to deliver soaring growth well into the future. Worth nearly $1 trillion, investors are paying almost 100 times the forecast $2.91 earnings per share estimated for 2026. 

How long that will continue increasing looks like it will depend on the success of the robotaxi pilot rather than the Model Y refresh.