Tesla has rolled out long-anticipated, lower-priced versions of its two flagship vehicles — the Model 3 Standard and Model Y Standard — following the recent expiration of the $7,500 federal tax credit for most of its U.S. buyers, according to CNN.
The Model 3 Standard now starts at $38,630, and the Model Y Standard starts at $41,630, including fees. The company already announced that orders will be delivered from November to January, expecting a spike in interest from consumers.
Design-wise, new models are almost identical to their larger counterparts, although consumers should be prepared to see cloth interiors, a lack of a second-row touchscreen, a shorter range, and slower acceleration.
The release follows slowing U.S. sales growth and the introduction of more affordable EVs from rivals like BYD and Hyundai. With half its revenue from the U.S., Tesla hopes the new models will maintain production and target budget-conscious buyers in a crowded market.
Analysts, however, view this as a tactical move, rather than a significant innovation. It keeps factories busy and market share steady as Tesla prepares for a sub-$30,000 model in 2025.
Meanwhile, competitors are closing the price gap, creating challenges for Tesla in China, where BYD may soon overtake it in the EV market, as well as elsewhere. In the U.K., for example, the Chinese automaker has already achieved significant success, making the country its second-largest market outside China.
