TMTPOST --    Tesla Inc. on Tuesday launched cheaper   variants of its best-selling   models   as the electric   vehicle ( EV )   titan is working to   weather the   end of U.S. federal   tax   credit   for clean vehicles, which   has driven   its deliveries hit the quarterly record   ahead of expiring   the subsidy.

Credit：Tesla

The Rear-Wheel   Drive ( RWD )   Model Y   Standard   sport utility vehicle ( SUV )   variant   now starts   at $39,990, and   the RWD Model 3   Standard sedan is priced   at   $36,990   for the U.S. market,   according to   Tesla   website.   These   variants   are   about 11%   and 13%   cheaper, respectively,   than the   premium longer-range RWD   versions of each model.  

Both   of variants are scaled-down compared   to their premium   RWD   variants. The cheaper   Model   Y   Standard has a   range of 321 miles on a full range   due   to a smaller, 69.5   kWh   ( kilowatt-hour )   battery, down from 357 miles in the premium version, and takes   6.8   seconds to   accelerate to   60 miles per   hour ( mph ) , 1.4 seconds slower   than the premium   version. The current   Model   3   Standard can   go   for 321 miles on a single charge   and   sprint   to 60 mph   in 5.8 seconds, compared with   a range   of 363   miles and   a 0-60 mph time of   4.9 seconds   delivered by the   premium variant.

Both new models   have   no rear passenger screens, no   second-row   heated seats, and even   no   built-in FM   radios.   The Model   Y Standard has just 7 speakers   for audio   system   while the each   of the other   versions boasts   15 speakers   and 1 subwoofer.   For   driver assistance, new   models don ’ t offer Autosteer   so   drivers have to adjust the steering wheel   manually. Both   models   have simplified interiors   including textile inserts, instead   of the microsuede and textile decor.  

Tesla ’ s   more affordable models are unsurprising   as the   company has to counter   the   loss   of a   major U.S. government   incentive   boosting EV sales in recent years.   As   part   of the Trump   administration ’ s rollback of   emission   mandates, the federal   tax   credit   of up to $7,500 on EVs and   plug-in hybrids   expired on September 30,   making   a   new   EV more   expensive.   The   lower prices   may attract   some   buyers   when the federal subsidy   went away.

Tesla last   week announced it   globally   delivered 497,099   vehicles for the third quarter of 2025, setting its   quarterly delivery   record as the federal   tax   credit   came to an end. The deliveries represented   a   7.4%   year-over-year   ( YoY )   increase,   and easily   beating the average Wall   Street   analysts   expected around 456,000   units,   according to FactSet. The margin of that beat was the widest since the first quarter of 2021.

The latest deliveries   marked   an   unique   U-turn,   in part   driven   by American buyers   who   rushed to   buy a car   before   the tax credit ended.   Tesla just posted a 14%   YoY decrease   in delivery for   the   quarter ended June, the   second straight   quarterly   decline, highlighting intense competition   and   political backlash against CEO   Elon Musk.   Tesla is estimated to have retained its leadership with a 43.1%   U.S. market share from January to September,   according to data   from Motor   Intelligence, down from   a 49%   share as of the end   of 2024.

The   end of   tax credit   is not   deemed as   the only reason for   the   big   quarterly   sales beat.   RBC Securities analyst   Tom Narayan   believed that weakness   for BYD   Co.,   Ltd.   and other   Chinese   competitors resulting from   Chinese government   initiatives to end price   wars and help   domestic suppliers   also worked.

"While the U.S. EV credit expiry in September likely helped, we also think the softening performance by domestic Chinese [ original equipment manufacturers ] were a contributing factor to Tesla's performance," Narayan   said.  

Wedbush   analyst   Dan Ives, a long-time   Tesla bull, said that "China remains a positive point" for Tesla. More low-cost EVs entered the Chinese market, but the recently updated Model Y is spurring "continued demand in the region," he said.