Day: October 7, 2025

• Tesla announced new, more affordable versions of the Model Y and Model 3 on Tuesday.
• Investors have been clamoring for a more affordable version of Tesla’s popular EVs.
• The Model 3 Standard costs $34,990, and the Y Standard costs $37,990.

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 $37,990.

But in a surprise move, the company also announced a Model 3 Standard that costs even less — with a price of $34,990.

It 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.

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.”