Tesla introduces cheaper standard-range Model 3 and Y
Tesla has launched new standard-range variants of its Model 3 sedan and Model Y crossover for North America, starting at $36,990 and $39,990 respectively. These models feature smaller batteries and reduced features to cut costs, amid expectations of declining US electric vehicle sales following the end of a federal tax credit. The move comes after Tesla shelved plans for a $25,000 entry-level vehicle last year.
On October 7, 2025, Tesla announced the addition of standard-range versions to its Model 3 and Model Y lineup, aiming to offer more affordable electric vehicles in North America. The company had previously abandoned development of a $25,000 Model 2 earlier last year, as CEO Elon Musk shifted focus toward humanoid robots, though automotive sales remain the bulk of Tesla's revenue.
The Standard Range Model Y, priced at $39,990, provides 321 miles (516 km) of EPA-estimated range with rear-wheel drive, compared to 357 miles (574 km) for the premium rear-wheel drive version. It includes a smaller battery pack, believed to be 69 kWh, and various cost-saving omissions: no AM or FM radio, no rear passenger touchscreen for climate control, a metal roof instead of panoramic glass, a simpler center console, manual steering wheel adjustment, reduced interior trim options, a basic particulate filter without HEPA mode, no rear seat heating, and no front seat cooling.
Additional simplifications encompass fewer paint color choices, non-adaptive high-beam headlights with different LED designs for the refreshed model's light bar, manual side mirrors, and passive dampers rather than adaptive ones. While Autosteer is not included standard, the hardware is present, allowing owners to add Full Self-Driving capability later.
The Standard Range Model 3 starts at $36,990 and mirrors these decontenting measures. However, both models are still pricier than their predecessors from last week, with the reductions falling short of the $7,500 IRS clean vehicle tax credit that expired at the end of September 2025. That credit had boosted third-quarter sales, but analysts anticipate a significant drop in the current quarter.
In comparison, Hyundai recently cut prices on its US-built Ioniq 5 by $7,600 to $9,800, making it more than $2,000 cheaper than the equivalent Tesla after adjustments, with faster charging speeds despite slightly shorter range than the long-range Model Y.