After more than a year of hinting that cheaper Tesla models were on the way, the company has officially introduced them. On Tuesday, Tesla launched new entry-level versions of its Model 3 sedan and Model Y SUV, priced at $36,990 and $39,990, respectively.
These new “Standard” editions offer an estimated 321 miles of range on a full charge but come with fewer features compared to the higher-end rear-wheel and all-wheel drive variants expected later this year. Interestingly, the Standard models don’t include Autopilot, Tesla’s basic driver-assistance package. They only come with traffic-aware cruise control, while Autosteer—a key part of the Autopilot system—is missing.
Tesla’s move to launch cheaper models is aimed at boosting growth following a decline in sales throughout 2024. However, the prices are not as low as some consumers expected, especially after CEO Elon Musk previously teased a $25,000 Tesla, a plan that was eventually abandoned.
Notably, the new Model 3 still doesn’t drop below the long-promised $35,000 price point that was widely promoted before the car’s 2016 launch. That price was briefly available as a hidden ordering option but quickly disappeared.
Inside, the Standard versions differ more than they do on the outside. Known for its minimalist interiors, Tesla has pushed simplicity even further. The cars lack a second-row touchscreen, and both the steering wheel and side mirrors must be manually adjusted. There’s no FM/AM radio, and sound comes from seven speakers instead of the 15-speaker setup with a subwoofer found in premium models. Additionally, only the front seats are heated.
Externally, Tesla removed the light bar found on the front of pricier Model Y trims, and the glass roof is also missing from the Standard versions.
Over the years, Musk and other Tesla executives have joked about playing “Game of Thrones for pennies,” referring to their relentless efforts to cut production costs. That cost-cutting mindset is clearly reflected in the design and pricing strategy behind the Model 3 and Model Y Standard.
Tesla’s new Standard models expand to global markets amid shifting EV competition
Tesla plans to roll out its new Standard versions across several global markets, including Europe. With the U.S. federal EV tax credit expiring last month, the new pricing will now be more straightforward for American buyers — unless they live in states offering generous electric vehicle incentives.
This shift creates an interesting dilemma for new EV shoppers. While major automakers are scaling back plans for some of their higher-priced electric vehicles, competition in the lower price range may actually intensify — a development that could ultimately benefit Tesla.
Ford is currently developing a low-cost EV platform scheduled to debut in 2027, while General Motors is reviving the Chevy Bolt. Meanwhile, startups like Rivian and Lucid Motors, along with newcomers such as Slate Auto, are all preparing to launch models within the next few years that will compete directly around the Model 3 and Model Y Standard’s price range.
Earlier this year, Elon Musk’s involvement in the second Trump administration sparked controversy and temporarily hurt Tesla’s brand image. However, the company quickly bounced back, achieving its best quarterly performance ever as the federal EV credit expired.
Still, it remains uncertain how sustainable that momentum will be. The launch of the new Standard models could not only reshape Tesla’s own product lineup but also disrupt the used EV market, potentially pressuring prices and competition across the board.
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