Tesla unveils cheaper Model Y and 3 after US tax credit ends
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The news: Tesla unveiled more affordable versions of its best-selling Model Y SUV and Model 3 sedan after the expiration of a USD7,500 federal tax credit for electric vehicle buyers in the US.
The numbers: The Model Y Standard starts at USD37,990 ($57,730) about 15% cheaper than the previous base model, and the Model 3 Standard at USD36,990.
Both models have reduced features compared to Premium trims, including no Autosteer, no rear passenger screens, no second-row heated seats and simplified interiors, according to its website.
Tesla shares were down about 4% in late afternoon trading in New York.
The context: The new Standard models follow repeated promises by Tesla to produce a more affordable vehicle. CEO Elon Musk scrapped plans for a USD25,000 EV last year to focus on self-driving technology and humanoid robots.
But the US federal EV tax credit of up to USD7,500 expired last month, raising effective prices and prompting Tesla to accelerate deliveries in the third quarter. Analysts now expect a sharp drop in EV demand in the fourth quarter, with BloombergNEF projecting a 24% decline in US EV sales. Investors have also raised concerns that the new Standard models could primarily cannibalise sales of higher-priced versions.
