“Tesla has long promised a cheaper model. On Tuesday, the company unveiled stripped-down versions of its bestselling SUV and sedan, but the new lower prices don't quite cover the recently expired $7,500 EV tax credit.
Tesla introduced a "standard" Model Y and Model 3 that lack features such as wraparound ambient lighting and power-adjusted steering wheels [A], hoping to draw in budget-conscious buyers.
The standard Model 3 costs $36,990 and the standard Model Y $39,990, putting them among the least-expensive electric vehicles for sale in the U.S. and better positioning Tesla to compete globally against low-cost EVs coming out of China.
The lower-cost Model Y replaces a lightbar across the front with two conventional headlights, and has a different roof design. Both vehicles swap part of the vegan leather seats for cloth, leave out the AM/FM radio and backrow screen and have fewer speakers than more expensive variants, among other changes.
With a range of 321 miles, both vehicles offer slightly less battery performance than pricier versions but outperform other models in Tesla's lineup.
The next cheapest Model 3 is priced at $42,490. The Model Y price compares with $44,990 for the Long Range Rear Wheel Drive variant 2025 Model Y, which was refreshed earlier this year.
The Model Y has become one of the world's bestselling cars, rivaling Toyota's Corolla.
Tesla for years has said it would release a lower-price model to spur growth in an increasingly competitive landscape. That strategy shifted last year when Chief Executive Elon Musk canceled plans for a $25,000 "Model 2" to focus instead on the company's dedicated autonomous vehicle, the Cybercab, which lacks a steering wheel and pedals.
Musk has emphasized his desire to transform the electric-vehicle maker into an artificial intelligence and robotics company and said that all new Tesla models will be autonomous.
"I think having a regular $25,000 model is pointless," he told investors on an earnings call last year. "It would be silly, like it will be completely at odds with what we believe."
Executives have continued to discuss offering multiple "affordable models," though not without fits and starts.
In April, Tesla released a pared-down version of its Cybertruck that dropped features such as vegan-leather seats and power-adjusted steering wheels, and eliminated others, including the truck-bed cover. By September, that product was no longer available for purchase.
Tesla also increased the price on its luxury Model X and Model S vehicles and added "lux packages" that include upgrades such as Full Self-Driving (supervised) software and unlimited charging.
The cheaper variants could help alleviate some of the pain expected to hit electric-vehicle makers in the fourth quarter following the end of a $7,500 federal tax credit in the U.S. General Motors, Ford and Hyundai have all said they plan to continue offering incentives for battery-powered car sales to alleviate some of the sticker shock.
Electric-vehicle makers reported record sales last week after customers rushed to make the most of the credit, which expired on Sept. 30.
Tesla increased its global sales 7.4% in the third quarter from a year earlier, reversing significant sales declines that brought it down more than 13% in the first half of the year.
On a July earnings call, Tesla executives avoided naming coming low-price models until Musk interjected: "It's just a Model Y. Let the cat out of the bag there."
He said the point of a cheaper Model Y is to reach customers who can't otherwise afford to buy a Tesla.
"The desire to buy the car is very high," he said. "People just don't have enough money in the bank account to buy it. So the more affordable we can make the car, the better."” [B]
A. Power-adjustable steering wheels allow drivers to move the steering column up/down (tilt) and in/out (telescope) using electronic controls, rather than a manual lever. These power adjustments enhance driver comfort by enabling personalized positioning and can be linked to memory settings, automatically moving the wheel for easy entry/exit when the vehicle is turned off. A control switch on the left side of the steering column is used to make these adjustments.
How to Use a Power-Adjustable Steering Wheel
Locate the Control:
The adjustment switch is typically found on the lower-left side of the steering column.
Make Adjustments:
Tilt: Press the top or bottom of the switch to move the steering wheel up or down.
Telescope: Press the front or rear of the switch to move the steering wheel closer to or farther from the driver.
Check Position:
Adjust the steering wheel so you can see the instrument cluster and have your elbows slightly bent when reaching the wheel.
Save Settings (if equipped):
Some systems allow you to save your preferred position to a memory setting, linked to the driver's seat position.
Entry/Exit Feature (if equipped):
In vehicles with this feature, the steering wheel automatically moves to a stowed position when the key is removed, making it easier to get in and out of the car.
Key Benefits
Enhanced Comfort:
Drivers can find a perfectly customized and comfortable driving position.
Improved Visibility:
The steering wheel can be adjusted to ensure a clear view of the instrument panel.
Easier Entry/Exit:
The auto tilt-away feature helps prevent knees from hitting the steering wheel during entry and exit.
Personalized Settings:
With memory settings, the steering wheel can automatically adjust to the driver's ideal position.
B. Tesla Unveils Cheaper EV Models. Peterson, Becky. Wall Street Journal, Eastern edition; New York, N.Y.. 08 Oct 2025: B1.