:max_bytes(150000):strip_icc()/GettyImages-2239225067-d609356f01544e1fbc36abd5e25b5f25.jpg "Tesla Launched Its ‘Most-Affordable’ Cars. Some Investors May Have Hoped for Cheaper")
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Key Takeaways
- Tesla on Tuesday afternoon announced lower-priced versions of its Model 3 and Y vehicles, with both sporting starting price tags below $40,000.
- The shares finished the day lower, perhaps indicating a hope the cars would’ve been cheaper.
Cheaper Teslas have arrived. But are they cheap enough?
The electric vehicle maker on Tuesday afternoon announced its “most affordable vehicles” on X, revealing Standard versions of its Model 3 and Y vehicles. The vehicles are available for order on the company’s website, with the 3 starting at around $35,000 and the Y near $38,000. Both models advertise a range of 321 miles in the new configurations.
The news was generally anticipated, with the company in recent days teasing impending news on social media. “Ultra-low cost of ownership, engineered for safety & comes with the best Tesla features you love,” the company said Tuesday on X. Tesla (TSLA) earlier today also announced an update to its self-driving system.
What This Means for Tesla Investors
Tesla’s stock retreated a bit on Tuesday, perhaps in part reflecting hopes the EV maker and tech giant would’ve priced new versions of its vehicles even lower than the sub-$40,000 levels it announced today. Stepping back, however, the stock’s upward climb over the past few months points to growing optimism about the years ahead.
Tesla watchers have for years awaited lower-priced vehicles; some may still be hoping for a new, more affordable model, rather than lower prices on existing ones. CEO Elon Musk late last year suggested that such a vehicle—perhaps priced under $30,000—might be more geared toward use as a robotaxi than a traditional consumer car.
The company earlier this month reported third-quarter deliveries that, at near 497,000, were higher than Wall Street expected, though market watchers generally believe that the expiration of EV credits pulled some demand forward.
“The launch of a lower cost model represents the first step to getting back to [an about 500,000] quarterly delivery run-rate which will be important to stimulate demand for its fleet,” Wedbush analysts wrote late Tuesday. The price, however, wasn’t as low as they hoped, leaving them “relatively disappointed with this launch.”
In any case, as the company’s shares have risen this year—the stock has been on a tear lately, rising off spring lows—bulls have cited other drivers for the stock. A cheaper model might have signaled a more aggressive push toward building a fleet of vehicles that could both represent a future robotaxi network and serve as a platform for selling autonomous driving software.
The shares finished Tuesday down nearly 5% to $433, leaving them up about 7% in 2025 through the close.
