For as long as it’s been a company, Tesla has been promising an entry-level electric vehicle that would compel more people to make the switch from gas guzzlers to zero-emission. Elon Musk himself predicted that Tesla would eventually sell a $25,000 EV and revolutionize the auto industry. The Model 3, the Model Y, and even the Cybertruck were all supposed to have more attainable variants, but they never materialized.
Now, the company says it is finally ready to release its everyman EVs. Yep, there are two of them, and they are just stripped down versions of the automaker’s best-selling models: the long-rumored Model Y Standard, which starts at $41,600 (including destination charges and fees); and the Model 3 Standard, starting at $38,640. Both vehicles are available now to order, with customer deliveries starting December 2025.
The Model Y Standard was widely expected, but the barebones Model 3 is, to my knowledge, a bit of a surprise. Tesla says both vehicles will have an estimated 321 miles of range, a 15.4-inch infotainment screen, integrated Grok-powered voice assistant, heated first row seats, heated steering wheel, and a dual-tone interior made of textile and vegan leather.
The Model 3 Standard and Model Y Standard are based on the refreshed and “Highland” and “Juniper” updated models that launched in the US last year and earlier this year, respectively, but Tesla removed many standard features to lower the price. These include front and rear light bars, panoramic glass roof, power mirror folding, the second row display, and puddle lamps. The cabin lights, mood lighting, suspension, and seat controls have all been downgraded as well. The paint options are limited to the standard Stealth Gray and optional Pearl White and Diamond Black. And the 19-inch wheels are getting swapped for smaller 18-inchers.
Both vehicles are real-wheel drive powertrains with 0-60mph acceleration in 6.8 seconds. When DC fast charging, they can add 150 miles in 15 minutes. The sound system includes seven speakers, down from 15 speakers in other versions, with no subwoofer. There is no AM/FM radio, nor is there any extended storage in the center console. The steering is manually adjusted rather than power-adjusted. Gone are the frequency dependent shock absorbers, replaced by passive shock absorbers. And the driver assist system lacks Autosteer.
These are the vehicles that investors think will lift Tesla out of its present-day doldrums brought on by an aging lineup and blowback to Musk’s hard-right politics. The stripped-down versions of the Model 3 and Model Y are designed to be about 20 percent cheaper to produce than their refreshed models, according to Reuters. But there’s no question that the lower-cost EVs deviate significantly from the affordable vehicles that Musk has been promising for years.
He first mentioned it in a 2018 interview, saying, “A $25,000 car, that’s something we can do.” Then, in 2020, at the company’s first Battery Day event, he speculated that Tesla could eventually produce upward of 20 million of these vehicles in a year — or roughly twice the current production of Toyota, GM, or Volkswagen.
Musk has said the more affordable EV would be built on the company’s next-generation vehicle platform, and even suggested that it would have a Cybertruck-inspired design. But rather than prioritize a vehicle that investors took to calling the “Model 2,” he spent Tesla’s resources on the expensive, polarizing Cybertruck — which turned out to be a flop.
Musk has also actively gummed up the works for a cheaper Tesla vehicle. Last year, he reportedly canceled the company’s plans to build a low-cost electric vehicle in favor of going all in on the Cybercab, a steering-wheel-less autonomous vehicle that Musk says will start under $30,000. In earnings calls, he pushed back against the idea that Tesla even needed to make an entry-level model, arguing that self-driving cars would eventually make the whole project moot.
These are the vehicles that investors think will lift Tesla out of its present-day doldrums
But after some pushback, Musk eventually put a cheaper Tesla back on the menu. And a couple of months ago, he finally let the “cat out of the bag”: the affordable EV would just be a decontented Model Y. And last week, the barebones Model Y was spotted driving around Tesla’s Texas headquarters. Several details were also leaked through firmware updates.
Will a less expensive Model 3 and Model Y save Tesla? Some analysts believe so, predicting that the company’s deliveries will jump to 1.85 million vehicles in 2026 with the cheaper variant in the lineup. (Tesla’s sales are expected to drop this year for the second year-in-a-row.) But others couldn’t really contain their disappointment. Even Wedbush analyst and Tesla bull Dan Ives said he was “relatively disappointed with this launch as the price point is only $5k lower than prior Model 3’s and Y’s.”
A possible scenario is the lower-cost Model 3 and Model Y simply cannibalize regular Model 3 and Model Y sales. A truly affordable EV, one priced below $30,000, would stand a much better chance of reinvigorating Tesla, especially as the average sale price of a new car inches closer to $50,000. Car loans are getting pricier and longer, as shoppers pull every “affordability” lever that’s available to them regardless of the long-term consequences.
Tesla, with its scale and supply chain, could have changed the game entirely. Instead, it’s doubling down on something familiar.
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