Tesla is reintroducing a seven-seat configuration for its Model Y crossover in the United States market. Starting January 13, 2026, customers will once again be able to order the optional third row for an additional $2,500. This move targets families seeking greater passenger capacity without stepping up to the significantly more expensive Model X SUV. The launch, however, coincides with a period of contrasting fortunes for the electric vehicle manufacturer.
Operational Hurdles and Legal Challenges
The company faces mounting operational headwinds. A class-action lawsuit was filed in Florida in January 2026, alleging that electronic door handles on Model S vehicles from model years 2014 to 2016 frequently fail and block access. Furthermore, the rollout of Tesla’s robotaxi service is progressing more slowly than initially projected. The program remains limited to specific zones within Austin and San Francisco and continues to require safety drivers behind the wheel.
A Detailed Look at the New Configuration
The third-row seating will be offered exclusively on the premium, all-wheel-drive variant of the Model Y, which has a starting price of $50,630. To accommodate this option, Tesla will equip these vehicles with a larger 16-inch touchscreen, a black headliner, and new 20-inch wheels. It is important to note that this is not the elongated “Model Y L” version available in China. Instead, the extra seats are integrated into the existing cargo space, with initial reports suggesting the quarters are tight and primarily suitable for children.
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Divergent Regional Performance
Tesla’s global sales narrative is split. In December 2025, the company achieved a monthly delivery record in China, handing over approximately 94,000 vehicles—a year-on-year increase of 13.2%. The broader picture is less rosy. Worldwide electric vehicle sales for Tesla declined by nine percent across the full year 2025, marking a rare annual contraction for the automaker. Intensifying price competition from Chinese rivals like BYD and Xiaomi is putting additional pressure on profitability.
Analyst Sentiment Remains Cautious
Market experts maintain a skeptical outlook. On January 12, 2026, Wells Fargo reaffirmed its “Underweight” rating on Tesla shares, raising its price target only modestly from $120 to $130. This target implies a potential downside of roughly 70 percent from current levels. The bank cited weak fundamental projections for 2026 and expressed doubt about the near-term financial contribution of Tesla’s Robotaxi and Optimus humanoid robot projects. The broader analyst consensus currently leans toward a “Hold” rating, with average price targets sitting substantially below the present trading price.
The return of the seven-seat Model Y represents a tactical play to capture a specific, higher-spending customer segment. Whether this product adjustment will be sufficient to offset the company’s broader global sales slump remains an open question. Tesla’s valuation continues to reflect ambitious growth expectations, leaving the stock exposed to significant downside risk.
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