Tesla announce cheapest Model Y and Model 3
Tesla has shaken up the car market with its most affordable models yet, a move to secure its dominance in the fiercely competitive EV industry.
Tesla has unveiled discount versions of the popular Model 3 sedan and Model Y SUV in the US, as the EV giant grapples with slowing sales and the expiration of a key US tax credit.
The standard Model 3 now starts at US$36,990 ($56,200), while the Model Y begins at US$39,990 ($60,700) – a cut of US$5000 to US$5500 ($7600 to $8350) off previous prices.
To hit these lower price points, Tesla has stripped away key features typically found on premium trims.
Both models lose lane-centring assists, although all other safety aids remain, with the option of Full Self-Driving (Supervised) available for US$8,000 (approximately A$12,100) on both cars.
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Rear passengers no longer have access to the highly anticipated entertainment touchscreen, which is typically used for streaming videos, playing games, adjusting climate settings, controlling media playback, and repositioning the front passenger seat to create extra legroom.
Additionally, the premium 15-speaker sound system has been replaced with a simpler seven-speaker set up, and FM radio has been removed in favour of digital-only radio.
Both models also lose electrically retractable mirrors, with the Model 3 losing power-adjustable mirrors (though the Model Y retains this feature). Both are rear-wheel drive and fitted with smaller battery packs – the Model Y gets a 69.5 kWh battery, down from 82 kWh in long-range versions, according to US reports.
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According to Tesla’s website, both base models have a claimed driving range of 517 km on 18-inch wheels and 488 km on 19-inch wheels, down from 575 km on 19-inch wheels in the long-range premium RWD version.
The new base models are currently available in the US market with no plans for Australia just yet.
Tesla’s move to announce cheaper variants comes after repeated promises by Elon Musk to produce more affordable vehicles, but other factors are also at play.
In the US, EV prices effectively rose by US$7,500 at the end of September following the end of their EV tax credit. This bolstered Tesla’s quarterly sales, but expectations are that they will slow for the rest of the year unless these new base models offer alternatives.
Tesla has already been grappling with slowing sales of its ageing line-up as competition has grown rapidly in other markets, such as China and Europe.
Here in Australia, Tesla’s Model Y sales hit record numbers for the first time in 18 months, with 3927 deliveries in September.
The latest announcement of affordable models will also play a key role in Musk’s strategy of delivering 20 million vehicles over the next decade – one of several operational milestones set by the company’s board as part of his proposed $1 trillion pay package.
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However, markets haven’t responded well to the new products, which analysts say is due to the modest price cuts.
“We believe the launch of a lower cost model represents the first step to getting back to a 500,000 quarterly delivery run-rate, but we are relatively disappointed with this launch as the price point is only $5000 lower than prior Model 3s and Ys,” analyst Dan Ives said in a note provided to Al Jazeera.
As a result, Tesla’s stock price finished down four per cent.
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Originally published as Tesla announce cheapest Model Y and Model 3
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