Tesla's most affordable models have finally arrived.
On Tuesday, the EV giant unveiled the long-awaited budget-friendly version of the Model Y, Tesla's most popular vehicle — and it costs $39,990 with 321 miles of estimated range.
But in a surprise move, the company also announced a Model 3 Standard that costs even less — with a price of $36,990.
Notably, the lower-cost models ditch some of the features that have previously come standard in other Teslas.
The Model Y Standard, for example, comes with "Traffic-aware cruise control" but lacks the driver-assist feature "Autosteer" available in other variants. On the exterior, gone are the "LED lightbar" and "adaptive high beams" — the budget model gets more traditional "LED headlights" and "Auto high beams" instead.
There's also no FM/AM radio inside either of the new vehicles.
The flip side is that buyers can now save $5,500 by opting for the Model 3 Standard over the rear-wheel drive Premium variant, and $5,000 when buying the Model Y Standard over the Premium rear-wheel drive version.
There are signs that Wall Street was hoping for lower price points; Tesla's stock dipped 3% on Tuesday following the announcement. Shares of the EV maker closed down 4.45%.
Tesla lists an estimated availability of November to December for the Model Y Standard and December to January for the Model 3 Standard.
The announcement of the new Standard models comes after Tesla reported record quarterly sales last week, as US buyers rushed to snap up EVs ahead of the end of the $7,500 tax credit for a new electric vehicle.
Without the tax credit, Tesla's Model 3 and base Model Y start at around $42,500 and $45,000 in the US.
While the $7,500 EV incentive is no more, New Yorkers may be able to get the new "Standard" editions for even cheaper, thanks to the state's EV incentive, which can push the overall price of the Model 3 Standard down to $34,990, and the Model Y Standard to $37,990 for eligible buyers after rebate.
For years, investors and fans have been searching for hints on the status of Tesla's elusive, affordable model, which CEO Elon Musk teased as early as 2018.
At the time, Musk said that Tesla would be able to deliver a $25,000 EV within a few years, addressing a hole in the electric vehicle segment of sub-$30,000 options. Industry analysts have long said that one of the barriers to mass adoption of electric cars is an affordability problem.
"To accelerate the transition to sustainable energy, we must produce more EVs, they need to be affordable, and (produce) a lot more energy storage," Musk said at Tesla's Battery Day in 2020.
Year after year, however, the CEO kept missing his self-imposed deadlines. Tesla ramped up its focus on self-driving technology, which Musk has made a top priority for the company.
When asked last October by Tesla's investors about when the company expects to deliver a $25,000 model with no self-driving capabilities, Musk said the endeavor would be "pointless."
"It would be silly," he said. "It would be completely at odds with what we believe."
