Tesla unveils slightly cheaper ‘standard’ versions of Model 3 and Model Y

Tesla has been teasing for more than a year that “more affordable models” of its vehicles are in the works, but on Tuesday the company finally announced them. The company currently sells more bare-bones versions of its Model 3 sedan and Model Y SUV, starting at $36,990 and $39,990, respectively.

The new versions, each dubbed “Standard,” have an estimated range of 321 miles on a full battery charge, but will have fewer features than the more upscale rear-wheel-drive and all-wheel-drive models when they ship later this year. It doesn’t even have Autopilot, the company’s basic advanced driver assistance system. (Newer models only have traffic-aware cruise control, not autosteer to complete the “Autopilot” feature set.)

The release of cheaper models is believed to help Tesla return to a growth trajectory after declining sales in 2024. But pricing isn’t as low as some expected, especially considering CEO Elon Musk once teased the idea of ​​a $25,000 Tesla before ultimately canceling the project.

The new Model 3 isn’t priced below the $35,000 threshold that Tesla advertised for its 2016 release. The sticker price that made Tesla famous was never actually offered, except for a few months as an off-menu ordering option.

New 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 touchscreen. The steering wheel and side mirrors are manually adjusted. There’s no FM/AM radio and only seven speakers compared to 15 speakers and one subwoofer on the more expensive version. Only the first row has heated seats.

Cosmetically, Tesla has done away with the light bar that adorned the nose of the more expensive Model Y variants. The glass roof was also abolished on the standard model.

Although Musk and other Tesla executives have talked and joked at length about playing “Game of Thrones” in the past, [for] This lean thinking appears to be the main strategy for how the company approached the Model 3 and Model Y Standard.

Tesla plans to sell these versions in multiple global markets, including Europe. The expiration of the US federal EV tax credit last month means these prices are a no-brainer in the US, unless the buyer lives in an area with strong state EV incentives.

This is an interesting calculation for new EV buyers. Major automakers are also pulling back on plans for many more expensive electric vehicles at the same time, theoretically reducing competition, which could be a tailwind for Tesla.

Ford is working on a low-cost electric vehicle platform expected to launch in 2027. General Motors is bringing back the Chevrolet Volt. Emerging automakers like Rivian and Lucid Motors, as well as new entrants like Slate Auto, are pushing to launch EVs in either the Model 3 or Model Y Standard price ranges within the next few years.

Musk caused visible damage to Tesla’s brand earlier this year when he was involved in the second Trump administration. Tesla rebounded after the EV tax credit expired, posting its best quarter ever, but it’s unclear how long that momentum will last. A new standard model is likely to put competitive pressure on Tesla’s own products, not to mention potentially wreaking havoc on the used market.