Tesla unveils cheaper Model Y and Model 3
The company announced a $39,990 Model Y today.
Tesla finally unveiled its new, cheaper Model Y, the more affordable car that the company has been promising — but failing to deliver — for years.
The stripped-down Model Y, dubbed “Standard,” comes with a price tag of $39,990, 11% cheaper than the previous base-level Model Y offered by the EV maker. Tesla also unveiled a Model 3 “Standard” that starts at $36,990. (Prices for the models on the Tesla website appear to vary depending on states’ incentives.)
Still, both of the vehicles remain significantly above the $30,000 price point that CEO Elon Musk late last year called a “key threshold.” And for comparison’s sake, with the $7,500 federal tax credit having expired at the end of September, the new, stripped-down Model Y will still cost $2,500 more than someone would have spent buying a non-stripped-down base model with the tax credit.
Telsa stock fell on the news and was recently down 4.1%.
The Standard models have fewer features than their premium counterparts. The cheaper models no longer have second-row touchscreens, Autopilot, or glass roofs, among other changes, according to TechCrunch.
Before today, a new Model Y started at $44,990. Some analysts expected a deeper price cut of around 20%, which would have taken $9,000 off that price tag — or just $1,500 more than the federal EV tax credit that just expired — for a price of about $35,900.
Last year, the company scrapped plans for a new $25,000 model, instead opting to make a cheaper version of the existing Model Y.
“It’s just a Model Y,” Musk revealed during the company’s second-quarter earnings call in July. “Let the cat out of the bag there.”
“The desire to buy the car is very high, just people don’t have enough money in their bank account to buy it,” he added. “So the more affordable we can make the car, the better.”
Though the lower-cost car was originally meant to enter production in the first half of the year, the company recently moved production to the end of this year.
The average price of an electric vehicle in the US this summer was about $57,000, per Kelley Blue Book, while the average price of a Tesla — which lowered its prices more than any other automaker to boost sales last quarter — was $54,468.
