Tesla just launched two brand new, affordable models. But the catch is that they are not actually new.
The newly unveiled models are practically just a Tesla Model Y SUV and a Model 3 sedan with some basic features removed to get the price tag down.
The Model Y pricing starts at $39,990, and the Model 3 starts at $36,990.
Tesla enthusiasts were speculating that the model would be priced around $25,000.
In the affordable version, the car is almost exactly the same except for changes that were roughly expected. In the Model Y, the panoramic glass roof is now gone. Instead of a center console with extended storage, there is an open center console, and instead of the power-adjust steering wheel, the car will have a manual-adjust steering wheel.
The leather seats and both front and rear light bars have been stripped. The second row seats also won’t be heated anymore, there is no auto-steer, and you can still supercharge in 15 mins, but it’s up to 160 miles now instead of 182 miles.
In the new Model 3, there are similar changes to the supercharger, leather seats, steering wheel, and more, except the affordable model still has the panoramic glass roof. The affordable Model 3’s second-row entertainment touchscreen has also been stripped.
The cars will still include integration with Musk’s AI chatbot Grok, according to an X post by the company.
The Tesla Model Y was once considered the best-selling car in the world, according to automotive analysts from Jato Dynamics, but was recently dethroned by the Toyota RAV4.
The 2021 Model Y vehicles were also the subject of a recent Bloomberg investigation that revealed people were hurt or even died when their Teslas lost power, often after a crash, and their doors wouldn’t open. The National Highway Traffic Safety Administration has since opened a preliminary probe into the 2021 Model Y door handles.
Musk has been teasing a new and affordable Tesla model for some time. The promise dates all the way back to Musk’s “The Secret Tesla Motors Master Plan” that he wrote in 2006, so it took Musk 19 years to semi make it come true.
Company guidance from last year had the reveal slated for the first half of 2025. But the months passed with no update. In an earnings call in July, Musk admitted that the new model won’t really be new at all.
When asked about details on the affordable model, Musk interrupted Tesla CFO Vaibhav Taneja to say, “It’s just a Model Y. Let the cat out of the bag there.”
It’s great timing for Tesla to unveil a more affordable option. The electric vehicle tax credit just expired last week, thanks to the efforts of the Trump administration, and prices for EV purchases are high right now. Tesla has since hiked up its lease prices as well.
An EV with a lower price tag is a great way to retain some of the buyers that would have been lost in the absence of the tax credit. It’s unclear how much of a boost it will be, but it will at least somewhat help a struggling Tesla.
The affordable yet stripped models are also still more expensive than the now premium Model Y and Model 3 cars were with the EV tax credit.
With a boost coming from the end of the tax credit, Tesla had stellar deliveries this past quarter. But besides that, the overall picture is grim. Tesla deliveries have tanked this year, at least in some part due to Elon Musk’s far-right political turn in the U.S. and Europe. Musk’s support of various far-right parties in Europe especially alienated a huge chunk of its customer bases in the UK and in Germany, a major market for the company.
To add on top of that, although Tesla dominates the American EV market, competition is thick elsewhere. Chinese competitors like BYD dominate the global EV market with affordable electric vehicles and easily run circles around Tesla. BYD’s cheapest model starts at roughly $8,000.