Key Takeaways
1. Elon Musk revealed that the upcoming budget-friendly Tesla is a simplified version of the Model Y, possibly named Model Y Standard.
2. The Model Y Standard is expected to be priced at $39,990, but this may be a placeholder as it lacks several premium features found in the current Model Y.
3. Key specifications removed from the Model Y Standard include a hood light bar, glass roof, electric folding mirrors, and upgraded interior features.
4. Tesla’s strategy of offering simplified models has had mixed results, as seen with the Cybertruck RWD trim that failed to attract buyers despite a lower price.
5. To increase demand for the Model Y Standard, Tesla may need to lower the price to around $35,000 to offset the loss of tax credits and boost Q4 sales.
At the recent quarterly earnings call, Elon Musk let slip that the much-anticipated budget-friendly Tesla is actually “a Model Y, let the cat out of the bag there.” He did, however, emphasize that this version is still a “singing and dancing” Model Y, packed with all the features that its avid followers have come to expect.
Leaked Specifications
The less expensive Model Y has seemingly been unveiled in the website’s code just prior to the teased release on October 7, showcasing much of its specifications and price details.
This new, affordable Model Y is likely going to be named Model Y Standard, which means that social media debates could easily abbreviate it as Model Y S. This name would fit neatly just under the existing Model Y trim levels available in the US, as well as the larger six-seater Model Y L that is offered in China.
Pricing Insights
The advertised price of the Model Y Standard is set at $39,990, although this figure might just be a placeholder, considering that the current cheapest RWD version costs around $5,000 more. With several design features and interior options stripped away from the Model Y Standard, it’s uncertain whether it will see significant demand if Tesla sticks to a $40,000 price tag.
Notably, this version lacks a hood light bar, glass roof, and electric folding mirrors, and the suspension system has been downgraded. Inside, Tesla has opted for a basic interior with textile seats, manual rear seating, a standard steering wheel, and air vents, while the HEPA filter has been exchanged for a less expensive particulate filter. There are no rear screens or central console storage, and even the clothing hooks have been removed. However, the matrix headlights, which enable automatic high beams, and the front bumper camera for FSD 14 are still included.
Market Strategy
Tesla has already been delivering such simplified models in other countries like Mexico, and they made a similar decision with the Cybertruck RWD trim in the US. Unfortunately, despite being priced $10,000 lower, the Cybertruck’s cloth seats and absence of air suspension didn’t appeal to many buyers, leading to its quiet phase-out.
To make the Model Y Standard appealing, Tesla will need to set its price at least $7,500 lower, the amount of the lost tax credit, aiming for around the $35,000 range if they want to boost sales numbers for Q4.
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