Tesla launches cheaper versions of Model Y and Model 3, available for orders immediately – Here's how much it will cost
To make the Model Y more affordable, Tesla launched a $39,990 version, about 11% cheaper than the previous base model. It offers a range of 321 miles but omits features like a second-row touchscreen and has fewer audio speakers.
Tesla introduced new, more budget-friendly versions of its top-selling Model Y SUV and Model 3 sedan on Tuesday, priced at $39,990 and $36,990 respectively, a move that aims to combat declining sales and shrinking market share as competition increases, reported Reuters.
These standard versions have a range of 321 miles (516 km) and less acceleration than the higher-tier Premium ones. According to Tesla's website, they are available for order now, and deliveries are expected to begin between December 2025 and January 2026 in many locations.
The standard models do not have Autosteer, Tesla's driver assistance system, and touchscreens for rear passengers. Tesla has also discontinued the LED lightbar in the more affordable Model Y. Both versions feature textile seats, with vegan leather offered for the Model 3, and manually adjustable side-view mirrors.
Chief Executive Elon Musk has long promised mass-market vehicles, but last year, he reportedly cancelled plans for a new $25,000 EV, according to Reuters. Instead, he opted to develop affordable versions derived from Tesla's current models, raising concerns among investors and analysts that these cheaper cars might impact sales of existing vehicles, it said.
Impact of US EV tax credits
Late last year, Musk said that the vehicle would cost less than the "key threshold" of $30,000, factoring in US EV tax credits.
EV prices in the US increased by $7,500 at the end of last month when the credit expired. This boost helped push quarterly sales to a record high, but most expect sales to slow for the remainder of the year unless an affordable car becomes available, the report said.
Musk said in July during Tesla's second-quarter earnings call said, “the desire to buy the car is very high. (It's) just (that) people don't have enough money in the bank account to buy it.”
He added, “So the more affordable we can make the car, the better.”
(With inputs from agencies.)
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