Tesla has introduced new, budget-friendly variants of its popular electric vehicles — the Model Y SUV and Model 3 sedan. The new base Model Y starts at $39,990, around 11% lower than the previous entry-level version, while the base Model 3 begins at $36,990. Both models are now available for immediate order.
What’s New and What’s Different
These new variants have been designed to make Tesla’s vehicles more accessible, though a few premium features have been removed to reduce costs.
- Range: The vehicles deliver a driving range of approximately 321 miles (about 516 km).
- Autosteer: The new base models do not include Tesla’s Autosteer driver-assistance system.
- Rear Touchscreen: The rear-seat touchscreen has been removed.
- Lighting: The LED lightbar feature in the Model Y has been omitted.
- Seating: Standard textile upholstery is included, with vegan leather available as an option on the Model 3.
- Side Mirrors: Mirrors are now manually adjustable instead of powered.
Despite these changes, both cars maintain Tesla’s signature performance, minimalist interior design, and advanced electric powertrain efficiency.
Why Tesla Made This Move
Tesla’s decision to roll out lower-cost versions seems to be driven by several key factors:
- Rising Competition in the EV Market
With a growing number of electric vehicles entering the market, Tesla aims to keep its edge by offering more competitive pricing to appeal to new customers. - Adjusting to EV Tax Credit Rules
Recent changes to U.S. EV tax credit eligibility have made some Tesla models ineligible for the $7,500 incentive. By reducing prices, Tesla brings these cars closer to an effective post-credit price range attractive to buyers. - Strategic Shift from a New $25,000 Model
Elon Musk had previously hinted at developing a $25,000 Tesla, but reports suggest that project has been paused. Instead, Tesla is focusing on offering more affordable trims of its existing models. - Balancing Premium and Entry-Level Demand
Analysts believe Tesla is attempting to expand its customer base without cannibalizing sales of its higher-end variants.
Orders and Delivery Timeline
Customers can place their orders for the new Model Y and Model 3 immediately on Tesla’s website. Deliveries are expected to begin between December 2025 and January 2026, depending on region and configuration.
Final Take
By offering cheaper versions of its most popular electric vehicles, Tesla is signaling a renewed focus on affordability and wider adoption. This move could help the company maintain its leadership in the EV segment, even as global competition continues to grow.
