Key Takeaways
1. Tesla has launched a new base Model 3, priced at approximately $25,800 after subsidies, to boost declining sales.
2. The new Model 3 Standard features a smaller battery, resulting in a reduced range of 382 km compared to the European model’s 534 km.
3. This budget Model 3 includes basic features like black cloth seats and manual adjustments, omitting some comforts and infotainment options.
4. The Model 3 Standard is now the most affordable Tesla globally, even cheaper than the starting price in China.
5. Tesla may expand this budget model’s availability in China to compete with affordable local EVs from brands like BYD.
Tesla appears to be starting a new approach to budget vehicle pricing in an effort to boost its declining sales. They’ve launched a new base Model 3, which is now the least expensive in the world, costing about $25,800 after applicable subsidies.
New Features and Compromises
The latest Model 3 Standard offers a range of features and design adjustments that have made it possible for Tesla to hit a price point that was previously associated with the much-discussed Model 2, which never came to be.
The 2026 Model 3 Standard that was recently introduced in Korea has a price of 42 million won, which is roughly $29,000. Additionally, with the help of government EV subsidies, the already low price of the Model 3 is further reduced, putting it close to the rumored price range of the mass-market Tesla Model 2.
Comparison with Other Markets
This new Model 3 Standard is now the most affordable Tesla available, as even in China, the starting price for the Model 3 Standard is around $33,770. Interestingly, the new Korean Model 3 is also produced in the Shanghai Gigafactory and then shipped out.
A glance at the vehicle’s specifications reveals how Tesla managed to set this attractive price. The Korean Model 3 Standard is equipped with a smaller battery. While the cheapest Model 3 Standard in Europe offers a range of 534 km, the $29,000 version in Korea provides only 382 km on the same WLTP cycle. The acceleration remains the same at 6.2 seconds for 0-62 mph, suggesting that Tesla has crafted a new budget version of the Model 3 specifically for the Asian market. The anticipated affordable Model 2 was expected to have a 54 kWh battery and a range of 250 miles, which aligns perfectly with the new base Model 3 specs.
Additional Compromises
Beyond the smaller battery, the new Model 3 has other trade-offs. It features only black cloth seats and comes with just one set of 18″ wheels. There are no front seat ventilation or rear seat heating options, and seat and steering wheel adjustments are manual, using levers. Even basic infotainment features, like a radio, have been removed, raising questions about the price difference compared to the next trim level.
Since the vehicle is manufactured in Shanghai, it’s likely that Tesla will introduce this budget model in China too, potentially at an even lower price to compete against the growing number of affordable Chinese EVs from companies such as BYD. Tesla is set to announce its earnings on Wednesday, January 28, after the market closes, and Elon Musk may reveal more details regarding this new budget pricing strategy during the announcement.
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