Tesla Launches Cheaper Model Y and Model 3 to Regain Market Share

October 8, 2025

Sharing :

NEW YORK — Tesla has introduced new, more affordable versions of two electric car models in an effort to boost sales amid a challenging market landscape. The updated Model Y, priced just under $40,000, features a simplified interior and arrives during a difficult year for the company, which faces increased competition and ongoing boycotts against CEO Elon Musk.

Despite the announcement, Tesla’s stock fell sharply, indicating investor skepticism about the impact of the new models. Analysts suggest that the market was expecting more significant innovations rather than updates to existing products.

Alongside the Model Y, Tesla also launched a less expensive version of its Model 3, which is available for under $37,000. In New York, residents can purchase it for less than $35,000 after applying a state rebate.

Although Tesla has long discussed the need for a budget-friendly vehicle, these new models still exceed the previously mentioned $25,000 price target. This release comes at a time when many consumers are likely to delay purchases due to the recent expiration of a $7,500 federal tax credit for electric vehicles.

The new Model Y features a reduced driving range of 321 miles, fewer audio speakers, and a fabric interior instead of microsuede. It also lacks a panoramic glass roof and a second-row touchscreen, making it less competitive against rivals like Ford’s Mustang Mach-E and Hyundai’s Ioniq 5.

The updated Model 3 has similarly reduced features, including a shorter driving range and less ambient lighting. As Tesla navigates these changes, it faces stiff competition in the growing electric vehicle market.

Sources:

AP News