Topline
Tesla on Tuesday unveiled plans to sell cheaper alternatives of its Model Y and Model 3 cars, its first product release in years, as Elon Musk’s automaker created more affordable options for its bestselling vehicles in an apparent move to offset the recent loss of tax incentives to buy electric vehicles.
Tesla priced its Model Y Standard and Model 3 Standard vehicles at $37,990 and $34,990, below the “Premium” alternatives at $44,490 and $41,990, respectively.
Tesla’s last product unveiling came in 2019 when Musk promoted the Cybertruck, though deliveries for the vehicle were delayed until November 2023 following a series of production issues and battery supply restrictions.
The Model Y accounted for 7.4% of the global electric vehicle market through Q1 2025 and remained the bestselling EV worldwide ahead of the Model 3 and BYD’s Seagull, according to Autovista Group, an automotive data firm.
Tesla will use less premium materials to produce the new vehicles to offset the loss of a $7,500 federal tax credit for Americans purchasing electric vehicles, which expired last week, Bloomberg reported, citing people familiar with the matter.
Production of a more affordable model began in June, Tesla executives told investors in July, though they did not provide specifics—Musk, however, suggested it would be the Model Y: “The desire to buy the car is very high, it’s just people don’t have enough money in their bank account to buy it.”
497,099. That’s how many vehicles Tesla delivered through its third quarter, a record quarterly total. Of these, about 97% were Model 3 and Model Y vehicles.
Rumors have swirled in recent days of a new product release in the lead-up to Tesla’s teaser advertisements over the weekend, which featured just the headlights of a car. Photos of what appeared to be a Model Y variant were shared on social media earlier this month, fueling speculation the automaker’s latest announcement would feature the Model Y. Musk has for years promised more affordable alternatives for his Tesla’s electric vehicles, though he reportedly scrapped plans last year for Tesla to build a $25,000 model in favor of producing affordable options to its current designs. Others speculated whether the product release would be the “Roadster” promised by Musk in 2017, as Musk said last month the “new Roadster is something special beyond a car.” Musk, who in 2021 said the Roadster would be able to “fly,” announced last year the car would be redesigned in collaboration with his SpaceX.
Tesla will report third-quarter earnings on Oct. 22. Wall Street expects Musk’s automaker to report earnings per share of $0.49 and $25.1 billion in revenue, according to FactSet, an increase of 22.5% and 11.6% over the previous quarter, respectively.