Tesla unveils slightly cheaper “standard” versions of the Model 3 and Model Y

Tesla spent more than a year teasing that “more affordable models” of its cars were on the way, and on Tuesday, the company finally revealed it. The company is now selling a more bare-bones version of the Model 3 sedan and Todal Y SUV, which start at $36,990 and $39,990, respectively.

The new versions, each “Standard,” get an estimated 321 miles of range on a full battery, and will come with fewer features than the more premium rear-wheel or all-wheel drive variants when they ship later this year. They don’t even have Autopilot, the company’s primary advanced driver assistance system. (New models only come with traffic-aware cruise control; Autosteer, which completes the “Autopilot” feature set, is missing.)

The release of cheaper models should help propel Tesla to growth after it saw sales decline in 2024. But pricing isn’t as low as some had hoped, especially considering CEO Elon Musk has teased the idea of ​​a $25,000 Tesla — before This project was eventually killed.

The new Model 3 doesn’t undercut the $35,000 price threshold that Tesla has been touting for some time since the car’s launch in 2016. That sticker price, which helped put Tesla on the map, isn’t offered for several months of savings as an off-list order option.

New cars differ more on the inside than on the outside. While Tesla cars are known for being minimalists, the standard Model 3 and Model Y take the Spartan approach to the extreme. There is no touchscreen in the second row. The steering wheel and side mirrors are adjusted manually. There’s no FM/AM radio and seven speakers compared to 15 speakers and one subwoofer on the more expensive versions. Only the first row has heated seats.

On the outside, Tesla has done away with the light bar that adorns the nose of the more expensive Y variants. The glass roof on standard cars is also gone.

Musk and other Tesla executives have Jokingly In retrospect, it’s about playing “Game of Thrones but (for) pennies” — an attempt to describe the company’s mad scramble to remove as much cost from its cars as possible. This bar thinking seems to be the core strategy of how a company approaches 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 those prices will be straightforward in the US, unless buyers live somewhere with strong state incentives.

This sets up an interesting calculus for new EV buyers. Major automakers are simultaneously withdrawing plans to reverse a number of more expensive electric cars, theoretically reducing capacity, which could be a boon for Tesla.

Ford is working on a low-cost electric vehicle platform in 2027. GM is bringing back the Chevy Bolt. Upstart automakers like Rivian and Lucid Motors, and even new entrants like Slate Auto, are pushing to launch EVs in the next few years that are priced on either side of the Standard 3 and Model Y.

Musk did tangible damage to the Tesla brand earlier this year when he participated in the second Trump administration. Tesla rebounded to have its best quarter ever as the EV tax credit expires, and it’s unclear how lasting that momentum is. The new standard models would likely apply competitive pressure to Tesla’s own offerings, not to mention the potential chaos it could bring to the used market.