Tesla launches a $39,990 Model Y and a $37,000 Model 3 to offset fading demand

After years of hype, teasers, and fan speculation, Tesla finally dropped its long-awaited $39,990 Model Y today, Tuesday.

The cheaper version of the company’s best-selling SUV quietly showed up on the automaker’s website this morning, delivering what Tesla-watchers have been expecting for months: a no-frills Model Y designed to claw back slipping demand in a brutal EV market that’s getting tighter by the day.

The base Model Y skips fancy extras like a glass roof, light bars, and premium seating, but still delivers a 321-mile range on a full charge. That’s only 36 miles less than the Long Range version.

The price undercuts the previous entry-level Model Y by about $5,000, giving buyers a cheaper way into the Tesla ecosystem just as the $7,500 federal tax credit disappears, thanks to President Donald Trump’s new spending bill. The new standard Model 3 also dropped, now listed at $37,000.

The announcement, as Cryptopolitan reported, follows days of buildup. Over the weekend, Elon Musk’s company dropped a mysterious teaser clip on social media showing a spinning, logo-branded part.

Nobody knew if it was a fan, a turbine, or a new wheel design, but the clip ended with the numbers “10/7.” On Sunday, Tesla followed that with another clip showing headlights glowing in the dark. Shares rose 5% Monday as excitement grew, with many investors hoping for big updates on the Roadster or Cybercab. But after today’s reveal, Tesla stock slid by 3%, closing Tuesday 4.45% lower overall.

Tesla cuts prices as it struggles to hold attention

Elon’s company has been bleeding momentum all year. No new mass-market model has come out since the Cybertruck launched in late 2023, and that vehicle never really caught fire.

From the infamous 2019 unveiling, where Elon smashed the truck’s window during a live demo, to eight voluntary recalls, the Cybertruck rollout has been rocky. It hasn’t matched the success of the Model 3 or the Model Y, both of which are now aging fast.

Earlier this year, Tesla had been aiming for a $30,000 stripped-down Model Y, but those plans changed after Trump’s tariffs and the removal of federal EV incentives. With U.S. buyers now facing full sticker prices, today’s price drop looks like a survival tactic. Competition from Chinese players like BYD and legacy names like Volkswagen is growing, and Tesla can’t rely on hype alone anymore.

The new cars aren’t the only update. Tesla also launched a revised version of its Full Self-Driving (Supervised) system today. Despite Elon’s decade-long promise to turn every Tesla into a robotaxi via software update, the vehicles still rely on human safety drivers, unlike rivals Waymo or Apollo Go.

Old promises pile up as pressure mounts on Musk

The next-gen Roadster is still missing. Elon announced it in 2017, said it could fly in 2021, and claimed last year it was being redesigned with SpaceX.It’s still not in production.

The Cybercab, a two-seater with no steering wheel or pedals, was shown at an invite-only event called “We, Robot” last October. Musk said it would cost $30,000, but it hasn’t gone into manufacturing either.

On the robot front, Elon claimed his Optimus humanoid robots would be able to babysit or work in factories. But they’re not for sale, while competitors like Unitree and Agility Robotics are already shipping bipedal robots.

Even with all this, the company’s stock has had a wild ride. After losing 36% in Q1, Tesla shares jumped 40% in Q3. So far this year, they’re up 12%, largely thanks to Elon buying $1 billion worth of shares himself in mid-September.

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