After more than a year of teasing more affordable models, Tesla Inc. has finally delivered — sort of. The electric carmaker on Tuesday unveiled new entry-level versions of its Model 3 sedan and Model Y SUV, priced at $36,990 and $39,990, respectively.
The new Standard editions promise an estimated 321 miles of range per charge but come stripped of many features found in pricier variants. Notably, they won’t include Tesla’s Autopilot system. Instead, drivers get only traffic-aware cruise control, while Autosteer — a key component of the basic driver-assistance package — is missing.
Tesla is hoping the lower-priced models will help revive sales after a difficult 2024, when demand for its vehicles slowed. Still, the pricing may disappoint some potential buyers. CEO Elon Musk once floated the idea of a $25,000 Tesla, a plan he later scrapped.
Even the new Model 3 fails to undercut the long-touted $35,000 price point Tesla championed ahead of the car’s 2016 debut, a figure that existed in reality for only a few months as a special off-menu option.
Inside, the new versions are even more stripped down than they appear. Known for minimalist interiors, Tesla takes that ethos further with the Standard models: No second-row touchscreen, manually adjusted steering wheel and mirrors, no FM/AM radio, and a pared-back seven-speaker audio system (compared to 15 speakers and a subwoofer on premium trims). Only the front seats are heated.
The result is Tesla’s most basic offering in years — one aimed at boosting volume, even if it falls short of Musk’s long-promised affordable EV.
Performance metrics also take a hit. While the Standard models achieve slightly better range than Tesla’s Performance variant, they fall short of the Premium versions’ maximum charge capacity. Acceleration from 0 to 60 mph is slower, and the vehicles use passive shock absorbers rather than the frequency-dependent system in higher-end models.
The launch follows years of pledges from Tesla to deliver vehicles in the $30,000 range. During an April earnings call, Chief Financial Officer Vaibhav Taneja indicated the lower-cost model was imminent and would reach widespread availability in the fourth quarter.
“We started the production of the lower cost model as planned in the first half of 2025,” Taneja said at the time. “However, given our focus on building and delivering as many vehicles as possible before the EV credit expires and the additional complexity of ramping a new product, the ramp will happen (in the fourth) quarter, slower than initially expected.”
The announcement comes as competitors move to undercut Tesla on price. Last week, Hyundai unveiled electric vehicles priced up to $9,800 below previous models, intensifying pressure on the industry leader.
Tesla’s sales trajectory has been turbulent. After posting record global deliveries in the third quarter, the company suffered unprecedented sales declines in the first two quarters of the year. While Tesla doesn’t disclose country-specific figures, its most recent annual report shows 46% of total revenue originates from U.S. sales and 21% from China.
Anticipated softening in U.S. demand threatens to leave idle capacity at Tesla’s two domestic factories, making lower-priced offerings a strategic imperative.
The company faces intensifying competition, particularly from Chinese manufacturers. BYD is expected to surpass Tesla as the world’s largest electric vehicle seller when full-year figures are released in January. Reports suggest Tesla plans to introduce a less expensive Model Y variant in China next year.
Musk’s political activities have also damaged the brand. His appointment to the Trump administration’s Department of Government Efficiency (DOGE) and endorsements of right-wing European political figures sparked protests at Tesla dealerships and acts of vandalism across the U.S. and Europe.
Musk’s subsequent break with President Donald Trump has done little to quell the backlash and may have alienated Trump supporters who had warmed to the brand. Before the split, Trump publicly encouraged Americans to purchase Tesla vehicles.
