Tesla Unveils More Affordable Model Y and Model 3 Amid Sales Slowdown:

Tesla has officially launched more affordable versions of its popular electric vehicles — the Model Y SUV and the Model 3 sedan — priced at $39,990 and $36,990, respectively. The move comes as the electric vehicle (EV) giant tries to rebound from slowing sales and increasing competition, particularly in global markets like China and Europe. CEO Elon Musk has long promised a push toward mass-market EVs, but last year, Tesla scrapped its plan to build an entirely new $25,000 vehicle. Instead, Musk hinted that a lower-cost model would still come, aiming to bring pricing below the $30,000 threshold — especially when US EV tax credits were factored in. However, those tax credits, worth $7,500, expired at the end of September, effectively raising vehicle prices overnight. That expiration led to a short-lived boost in Tesla's quarterly sales, but analysts predict a slowdown for the remainder of the year unless new, budget-friendly models can attract buyers. “The desire to buy the car is very high. [It is just that] people don’t have enough money in the bank account to buy it,” Musk said during Tesla’s Q2 earnings call in July. “So the more affordable we can make the car, the better.” Hype and Delivery: A Slow Start Over the weekend, Tesla sparked buzz by posting teaser clips on X (formerly Twitter). One showed headlights emerging from the dark; another featured a spinning wheel, followed by the date “10/7,” hinting at an October 7 announcement. While Musk initially promised production would begin by the end of June, Tesla said in July that it had only completed “first builds.” Customer availability is now expected sometime in the final quarter of 2025. Despite the reveal, Wall Street was unimpressed. Tesla stock was down nearly 4% on the day of the announcement. Analysts argue that the price reduction isn’t drastic enough to stimulate the demand Tesla needs. “We are relatively disappointed with this launch as the price point is only $5k lower than prior Model 3’s and Y’s,” said Dan Ives, analyst at Wedbush Securities. “However, this could be the first step in returning to a 500,000-per-quarter delivery rate.” Global Pressure and Shifting Focus Tesla faces stiff competition, particularly from EV makers in China and Europe. The company’s lineup, now aging, is seeing reduced interest — a challenge made harder by Musk’s increasingly polarizing public image. In an attempt to future-proof the business, Musk is steering Tesla toward artificial intelligence, robotaxis, and even humanoid robots. While the company promises more affordable models are in the pipeline, it has yet to provide concrete details. The pressure is mounting. To hit its ambitious target of delivering 20 million vehicles over the next decade, affordable EVs are crucial. These milestones are also tied to Musk’s proposed $1 trillion compensation package, making the success of these new models more important than ever. For now, though, Tesla’s lower-cost Model Y and Model 3 offer a modest step toward broader affordability — but whether it's enough to regain momentum in a crowded EV market remains to be seen.

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