Tesla Inc (NASDAQ:TSLA)’s shares fell 4.5% after the company unveiled stripped-down “standard” versions of its best-selling Model Y sport utility vehicle and Model 3 sedan, with lower prices that do not fully offset the recently expired US$7,500 electric vehicle (EV) tax credit.
Aimed at budget-conscious buyers, the standard Model 3 is priced at US$36,990 and the standard Model Y at US$39,990, placing them among the least-expensive EVs in the United States and positioning Tesla to compete more directly with low-cost models from China. The next Model 3 variant costs US$42,490, while the 2025 Model Y Long Range Rear-Wheel Drive, refreshed earlier this year, is US$44,990.
Cost reductions come with feature deletions. Both cars forgo vegan leather seats and power-adjusted steering wheels, and instead offer cloth seats, no AM/FM radio, no back-row screen and fewer speakers. The lower-cost Model Y replaces a front lightbar with two conventional headlights and adopts a different roof design.
Tesla said the standard variants offer slightly less battery performance than pricier versions, while still outperforming other models in the company’s line-up. The pricing shift follows recent quarterly sales momentum that had previously benefited from the US$7,500 credit.
Model Y remains among the world’s best-selling cars, rivalling Toyota’s Corolla.