In an effort to counter falling sales and regain lost market ground, Tesla has introduced more budget-friendly variants of its Model 3 and Model Y electric cars. The new Model Y Standard and Model 3 Standard are now available, featuring an estimated electric range of 321 miles (517 kilometers). The Model Y is priced just below the $40,000 mark, while the Model 3 Standard comes in at under $37,000.
This rollout occurs during a challenging period for Tesla, marked by an increasingly competitive EV landscape and customer acquisition hurdles. An aging roster of vehicles, robust offerings from global automakers, and calls for boycotts have contributed to the sales pressure. The financial markets responded poorly to the announcement, with Tesla’s stock price declining significantly, suggesting that the new models may not be the substantial sales catalyst the company hoped for.
Experts noted that the market was looking for a more significant departure from current offerings, rather than incremental updates. The revised models feature a less premium interior, including a reduction in audio speakers and the adoption of fabric upholstery for the Model Y. The panoramic glass roof and a secondary touchscreen have also been omitted. These vehicles are now competing in a price bracket populated by formidable competitors such as the Ford Mustang Mach-E, Chevrolet Equinox EV, and Hyundai Ioniq 5.
These newly priced “standard” versions, while cheaper than previous iterations, still fall short of Tesla’s long-held promise of a $25,000 electric car. The timing of their release is also noteworthy, as consumers may be hesitant to purchase EVs following the recent lapse of the federal $7,500 tax credit. The stock’s sharp fall on Tuesday followed a notable gain the previous day, highlighting investor uncertainty about the effectiveness of these latest offerings.