Tesla has finally done what Elon Musk has been promising for years: launched affordable versions of its most popular cars. The new Model 3 Standard and Model Y Standard arrive with price tags of $36,990 and $39,990, respectively — a move clearly aimed at reversing Tesla’s sliding sales and growing competition in the electric vehicle space.
Shiny New Teslas
Lower car prices are good news. Transportation is a key part of anyone’s success, and the more cars we can get back down to a reasonable price the better. However, in 2025 America, we’ve learned to look at the hand that “feeds” us with both eyes.
Telsa is finally offering models at lower prices, with decent range, giving a wider range of buyers access to the EV shift without breaking the bank. The Model 3 Standard and Model Y Standard were officially announced today, starting at $36,990 and $39,990, respectively. Both new models offer an estimated 321 miles of range (516 km) and maintain Tesla’s same design language, but that doesn’t mean Tesla isn’t giving away any features. The cheaper Model Y loses its LED lightbar, rear touchscreen, and powered side mirrors. Both versions skip Autosteer, Tesla’s driver-assist system, and come with textile seats instead of the usual vegan leather — though you can still pay extra for that on the Model 3. As if to sprinkle salt in the wound, Tesla removed AM/FM radio from the budget cars.
Cheaper, more basic models of electric cars are a key piece of the path forward for greater EV adoption in America. The economy is struggling and cars are so expensive that many American families can no longer afford to buy even the cheapest new vehicles. Tesla is choosing not only a good time to put out a cheaper car for buyers, but it’s also a good time for the company to sell cheaper cars. But will it work?
Tesla Stock Falls
Tesla’s stock dropped 2.8 percent after the announcement, according to Reuters. And that might say more than a press release ever could. Musk has been trying to rally investors with talk of affordability for years, but so far, Tesla’s “mass-market” EVs have remained out of reach for most buyers. The long-rumored $25,000 Tesla — even at the time, was seen as the key to EV dominance — was quietly canceled. It would appear that the market responded to the fact that the “cheap Tesla” models clocked in at over $10,000 more than the previously-promised economy model.
According to a June 2024 Reuters investigation, several Tesla executives were blindsided when Musk publicly denied reports that the $25,000 model had been canceled — even though, internally, the project was already dead. The denial may have helped Tesla’s stock recover in the short term, but it also deepened investor mistrust in the long-term. Now, these “Standard” trims ring like a compromise: a cheaper sticker price with noticeably fewer features, but presented as innovation.
Desire Isn’t The Issue
Musk’s reasoning hasn’t changed. “The desire to buy the car is very high,” he said back in July. “It’s just that people don’t have enough money in the bank account to buy it. So the more affordable we can make the car, the better.” That’s true — but it also raises questions about Tesla’s long-term plan. The U.S. EV tax credit of $7,500 expired for Tesla buyers at the end of last month, effectively making cars more expensive overnight. The rush to buy a Tesla before the credit ended did decently to boost sales temporarily. It’s worth noting that the ending of the EV tax credit came directly off the heels of a newly-appointed Trump administration, of which Elon Musk was a central player in “cutting government spending.” Tesla sales plummeted during Musk’s tenor as The Techo King of DOGE due to protests and even vandalism. So, dropping new models now, after all that, looks a little less like altruism and more like damage control.
Advertised On X
Tesla teased these cars on X (Twitter) over the weekend, posting two cryptic clips — one showing a wheel spinning in the dark and another hinting at the October 7 reveal date. But the marketing flash can’t hide the bigger story: Tesla’s lineup is aging, sales are slowing, and rivals from China and Europe are catching up fast. Even loyal Tesla owners are growing wary, citing Musk’s increasingly political persona and a lack of genuine innovation since the Cybertruck, which debuted in 2019.
These cheaper Teslas might help Musk hit short-term targets tied to his $1 trillion pay plan, which depends on Tesla eventually producing 20 million vehicles a year. But the company still hasn’t shown how it plans to get there.
So yes, the new Model 3 and Model Y are cheaper. And that’s a good thing. But just as important as making “affordable” cars for us, Tesla is concerned about profit margins for shareholders. It should be interesting to see how these new cheaper models do.