Hoping to reignite slowing sales, Tesla has launched new, more budget-friendly versions of its Model Y and Model 3 electric cars. These “Standard” models, providing an estimated range of 517 kilometers (321 miles), were unveiled Tuesday. However, the financial markets reacted unfavorably, with Tesla’s stock price plummeting.
The stripped-down Model Y Standard is priced just below $40,000 and features a less opulent interior. This introduction comes at a difficult juncture for Tesla, grappling with an aging lineup, robust competition from global EV producers, and public sentiment issues. The stock’s decline suggests that this product update is unlikely to provide the substantial boost the company seeks, with experts indicating a desire for more significant advancements.
Accompanying the Model Y is a cheaper iteration of the Model 3, retailing for under $37,000. For New York buyers eligible for state incentives, the price could drop below $35,000. This comes years after Tesla first talked about a $25,000 vehicle, and these “standard” versions are still considerably more expensive. Their release also follows the expiration of the federal $7,500 EV tax credit, a move that might prompt potential customers to postpone their purchase decisions.
Compared to previous models, the new Model Y sacrifices some features, including a reduced driving range, fewer audio speakers, and a fabric interior. It also omits the panoramic glass roof and a rear touchscreen. The EV market in the $40,000 range is highly competitive, with models like the Ford Mustang Mach-E and Hyundai Ioniq 5 posing significant challenges. The Model 3 Standard also comes with a diminished range and fewer premium features.