Tesla Unveils Cheaper Model Y, Model 3 as US EV Tax Credit Ends

Tesla unveiled more affordable versions of its Model Y and Model 3 vehicles on Oct. 7, aiming to  offset the expiration of the US$7,500 federal tax credit for electric vehicle buyers in the United States. The Model Y Standard is priced at US$37,990, while the Model 3 Standard starts at US$34,990, both below the “Premium” versions priced at US$44,490 and US$41,990, respectively.

Production of the new variants began in June, Tesla executives told investors in July, without disclosing production figures. CEO Elon Musk said the move responds to affordability challenges: “The desire to buy the car is very high—it is just that people do not have enough money in their bank accounts to buy it.”

Meet Model Y Standard & Model 3 Standard – our most affordable vehicles

Ultra-low cost of ownership, engineered for safety & comes with the best Tesla features you love

– 321 mi of range
– Extreme efficiency that takes you farther + saves you $$
– Minimal maintenance
– Can… pic.twitter.com/2cMQ5NW6Yf

— Tesla (@Tesla) October 7, 2025