Tesla has been teasing “more affordable models” of its vehicles for over a year, but on Tuesday the company finally unveiled them. The company currently sells more bare-needed versions of the Model 3 sedan and Model Y SUV, starting at $36,990 and $39,990, respectively.
The new version, each named “Standard,” has an estimated 321 miles of range when fully charged with batteries, but when shipped later this year, it will likely have fewer features than more premium rear and all-wheel drive models. It does not even have the company’s basic advanced driving assistance system, Autopilot. (The new model only comes with traffic-aware cruise control, and does not include autosteer to complete the “Autopilot” feature set.)
The release of cheaper models is believed to help Tesla, which had fallen in sales in 2024, return to growth trajectory. But pricing isn’t as low as some would have hoped, especially considering CEO Elon Musk was once teasing the $25,000 Tesla idea before he finally canceled the project.
The new Model 3 is not below the $35,000 standard that Tesla advertised for its 2016 release. This sticker price, which made Tesla’s name known, was never actually offered, except that it was offered for several months as an off-menu ordering option.
Newer cars are much different on the inside than on the outside. Tesla cars are known for being minimalist, but the Model 3 and Model Y Standard take a Spartan approach to the extreme. There is no second row touch screen. The steering wheel and side mirrors are manually adjusted. There is no FM/AM radio, and the expensive version has 15 speakers and 1 subwoofer, while only 7 speakers. Only the first row has heated seats.
Outside, Tesla has discontinued the light bar that adorns the nose of the more expensive Model Y variation. The glass roof has also been discontinued in standard cars.
Musk and other Tesla executives have joked in the past that “It’s Game of Thrones (for money).” This is an effort to express the company’s insane efforts to cut costs as much from the car as possible. This waste-free thinking appears to be the main strategy for how the company approached the Model 3 and Model Y Standards.
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Tesla plans to sell these versions in multiple global markets, including Europe. The US federal EV tax credit expired last month, which means these prices will be very easy in the US, unless buyers live in areas with strong state EV incentives.
This is an interesting calculation for new EV buyers. Large automakers are simultaneously withdrawing plans for many more expensive electric vehicles, and in theory, competition is declining, which could be a tailwind for Tesla.
Ford is working on developing a low-cost electric vehicle platform scheduled for release in 2027. General Motors is bringing back the Chevrolet Bolt. Emerging automakers like Rivian and Lucid Motors, as well as new entrants like Slate Auto, are also pushing for EVs in either the Model 3 or the Model Y Standard price range in the coming years.
Musk caused visible damage to the Tesla brand when he was involved in the second Trump administration earlier this year. Tesla recovered after the EV tax credit expired, hitting a record quarter, but it’s unclear how long the momentum will last. The new standard model is likely to put competitive pressure on Tesla’s own products, not to mention the potential to wreaking havoc on the second-hand market.
