Post by : Rameen Ariff

Tesla has launched more affordable versions of its popular vehicles in the United States, with starting prices now under $40,000. The new standard Model 3 sedan starts at $36,990, while the Model Y SUV begins at $39,990. These prices are roughly 13% and 11% lower than the premium, longer-range versions of each model, aiming to make electric vehicles more accessible after the US phased out federal tax incentives for EV buyers.

The new models, however, come with fewer features, including reduced battery range, no ambient interior lighting, and the removal of the second-row screen. Tesla’s focus remains on its larger goals of developing autonomous driving technology and humanoid robots, with the vehicles serving as a key revenue source to fund these innovations.

Tesla shares dropped 4.4% after the announcement, reversing much of the previous day’s gains. Although the company recently reported a record quarter in vehicle deliveries, global sales are down about 6% year-to-date. Analysts expect US demand for EVs to decline following the end of federal tax credits, projecting a fall from nearly 500,000 units in Q3 to about 332,000 in the final quarter of 2025.

Executives noted that production of the new affordable models started in June but was delayed to align with the phase-out of tax incentives. Chief Financial Officer Vaibhav Taneja said output will increase gradually. Industry experts say these new models are designed to attract budget-conscious buyers while Tesla continues prioritizing long-term technology goals.

This strategic shift highlights Tesla’s balance between offering lower-cost EVs and investing in autonomous and robotics projects, keeping the company’s broader vision for the future of mobility in focus.

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