Tesla’s new cut-price EVs: A $39,990 Model Y and $36,990 Model 3

In a significant move, Tesla has introduced a new variant of the Model Y crossover tailored for the North American market. Enthusiasts have eagerly anticipated a more budget-friendly option, initially speculated to be the $25,000 Model 2. However, plans for this model were put on hold last year as CEO Elon Musk shifted focus towards developing humanoid robots. Despite this pivot, electric vehicle sales remain a dominant source of revenue for Tesla. With the expiration of the IRS clean vehicle tax credit at the end of September, there was a surge in EV sales across the U.S. for the third quarter of 2025. Yet, experts predict a notable decline in sales for the current quarter. The newly launched Standard Range Model Y is priced at $39,990 and boasts an impressive range of 321 miles (516 km) powered by its rear-wheel drive configuration. This contrasts with the Premium rear-wheel drive Model Y, which offers a longer EPA range of 357 miles (574 km). Interestingly, Tesla has historically restricted battery capabilities through software, but it appears that this standard-range Model Y utilizes a 69 kWh battery pack. The cost-saving measures extend beyond the powertrain; this model features fewer amenities. Notably, there is no AM or FM radio, no rear touchscreen for climate control, and the metal roof replaces the panoramic glass option. Additionally, the center console is simplified, and the steering wheel is manually adjustable. Interior options have been reduced, and the vehicle lacks a high-efficiency particulate filter, eliminating HEPA mode, along with seat heating in the back and cooling in the front seats.