Tesla now has cheaper Model Y and 3 cars, but are they still too expensive?

"Tesla rolled out "affordable" versions of its best-selling Model Y SUV and its Model 3 sedan, but the starting prices of $39,990 and $36,990 struck some as too high to attract a new class of buyers to the electric vehicle brand. Tesla's stock fell 4% and Tesla bull Dan Ives, an analyst at Wedbush, said he was disappointed that the cars were only about $5,000 cheaper than the next trims of the models. The new versions, called Standard, cost more than what the previous models started at, including a $7,500 tax credit that expired at the end of September."

"The much-awaited unveiling is crucial for Tesla as it pushes to reverse falling sales and waning market share amid rising competition in Europe and China, and the loss of the U.S. tax credit. CEO Elon Musk has for years promised mass-market vehicles, though last year he canceled plans for an all-new $25,000 EV, Reuters first reported. Instead, he chose to build lower-priced versions based on Tesla's current models, sparking concerns among investors and analysts that the cheaper cars would cannibalize sales of existing vehicles and limit growth."

"Both Standard versions offer 321 miles (516 km) of range and less powerful acceleration than the current higher trims called Premium. They can be ordered immediately, with deliveries set to start between December 2025 and January 2026 for many locations, Tesla's website showed. The Standard versions do not come with Autosteer, Tesla's driver assistance system, or touchscreens for rear passengers. Tesla has also removed the LED lightbar in the cheaper Model Y. Both come with textile seats, with vegan leather available for the Model 3, and manually adjusted side-view mirrors."

Tesla launched Standard versions of the Model Y SUV and Model 3 sedan with starting prices of $39,990 and $36,990. The price points disappointed investors and analysts, prompting a 4% drop in Tesla's stock amid concerns the reductions were modest. The Standard trims deliver 321 miles of range but reduce acceleration and exclude features such as Autosteer and rear passenger touchscreens. Deliveries are slated for December 2025 to January 2026 in many locations. The strategy follows cancellation of a planned $25,000 EV and raises worries about cannibalizing sales and failing to capture new mass-market demand.

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