Tesla rolls out lower-priced versions of two EVs to regain market share during challenging year
Tesla introduced lower-priced versions of two of its electric vehicles on Tuesday, aiming to boost sales amid a challenging year, but the move failed to reassure investors, and the company’s stock dropped sharply.
The new Model Y, priced just under $40,000 with a simplified interior, arrives as Tesla contends with an aging lineup, growing competition from foreign EV makers, and backlash tied to Elon Musk. Tesla also launched a more affordable Model 3 for under $37,000, which drops below $35,000 for New York buyers after state rebates. Analysts noted that the new offerings are far from the $25,000 vehicle Tesla once promised and may struggle to drive significant sales, especially following the expiration of the $7,500 federal EV tax credit.
The stock market responded cautiously: Tesla shares fell 4.5% to $443.09 on Tuesday, after gaining more than 5% the previous day in anticipation of the announcement. Edmunds analyst Ivan Drury said, “Investors were looking for something truly different, not an iteration of an old product. I can’t imagine this will bring levels back to what they want.”
Compared to previous versions, the new Model Y has a shorter 321-mile driving range, fewer audio speakers, a fabric interior rather than microsuede, no panoramic glass roof, and lacks a second-row touchscreen. The new Model 3 also trims its driving range, ambient lighting, and other features. Both models face stiff competition around the $40,000 price point from the Ford Mustang Mach-E, Chevrolet Equinox EV, and Hyundai Ioniq 5.
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