Tesla has launched new, more budget-friendly variants of its Model Y and Model 3 electric cars, signaling a proactive approach to revive sales momentum. The company’s latest offerings, the Model Y Standard and Model 3 Standard, boast an estimated driving range of 321 miles. The Model Y Standard enters the market with a price point just below $40,000, featuring a more basic interior specification.
This introduction occurs during a difficult period for Tesla. The automaker is grappling with increased competition from international EV manufacturers, a product catalog that some perceive as outdated, and consumer sentiment influenced by boycotts. The financial markets responded cautiously, with Tesla’s stock experiencing a notable decline after the announcement, indicating investor skepticism about the immediate impact of these new models. Experts note that a significant market turnaround was not anticipated from these updated versions.
The Model 3 Standard is priced under $37,000, and for New York state residents utilizing available rebates, the final cost can fall below $35,000. While Tesla has long discussed plans for a truly low-cost vehicle, these ‘standard’ models are considerably more expensive than the previously discussed $25,000 target. The timing also coincides with the recent lapse of the $7,500 federal EV tax credit, a factor that could influence consumer purchasing decisions in the coming months.
Compared to their predecessors, the new standard models offer a diminished driving range and a less premium interior. The Model Y Standard omits features like a second-row touchscreen and the panoramic glass roof, while also reducing the number of audio speakers. In the $40,000 EV segment, it faces strong contenders such as the Ford Mustang Mach-E and Hyundai Ioniq 5.