EV giant Tesla Inc (NASDAQ:TSLA) has launched a new long-range rear-wheel drive (RWD) version of its best-selling Model Y SUV in the U.S.

What Happened: The new Long Range RWD version has an estimated range of 320 miles, a top speed of 135 mph, and can go from 0-60 mph in 6.5 seconds. It starts at $44,990, the same starting price as the rear-wheel drive version of the vehicle it has replaced on the website.

The replaced RWD variant had a range of just 260 miles.

Tesla CEO Elon Musk took to social media platform X to state that the older RWD vehicles built by the company over the past several months can get more range for an additional $1500 to $2000 depending on the battery cells employed. This would add 40 to 60 miles of range to the car, he said, while adding that the company is working through regulatory approvals to enable it.

"We have to pay the bills somehow," Musk said as a reason for the extra charge.

Why It Matters: The new variant of the Model Y comes weeks after Tesla launched a new Model 3 Performance variant in the U.S. The new Model 3 variant has more power as compared to the other two versions of the mass-market electric sedan.

This came after Tesla reported an 8.5% year-on-year decline in first-quarter deliveries with 386,810 vehicles delivered across the world, marking the first time Tesla has reported a drop in quarterly deliveries in about four years since the COVID-19 pandemic in 2020. The company attributed the decline in volume partially to the production ramp of the refreshed Model 3 at its Fremont factory.

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