Tesla Drops Their Cheapest Vehicle: What’s Next for Buyers?
Published: October 3rd, 2024.
Tesla has quietly removed their most affordable electric vehicle, the Model 3 Standard Range Rear-Wheel Drive, from their lineup. The model, priced at $39,000, is no longer available on Tesla’s online configurator. The lowest-priced option is the Model 3 Long Range Rear-Wheel Drive, starting at $42,500, marking a $3,500 increase for buyers seeking Tesla’s entry-level vehicle.
The change, initially reported by Electrek, comes without any formal announcement from Tesla. The discontinued Model 3 Standard Range was one of the few Tesla vehicles that used lithium iron phosphate (LFP) batteries sourced from China. The timing of this move raises speculation that recent U.S. tariffs on Chinese-made EV components, including batteries, may have influenced Tesla’s decision. Increased costs associated with importing these batteries could have made the Standard Range model less competitive in the U.S. market. However, Tesla has not confirmed whether these tariffs directly contributed to the model’s removal.
Another factor may be the eligibility for the federal EV tax credit. Because of its Chinese battery sourcing, the Model 3 Standard Range did not qualify for the full $7,500 federal tax credit. By contrast, the new base model, the Long Range RWD, is fully eligible for the tax credit, making it a more attractive option. After applying for the credit, the Model 3 Long Range RWD’s effective price drops to $35,000 for qualifying buyers, adding an extra 91 miles of range over the discontinued model. With 363 miles of range, the Long Range variant offers better value than the Standard Range’s 272-mile range.
This change in Tesla’s lineup aligns with broader trends in the company’s pricing strategy. Over the past few years, Tesla has frequently adjusted their prices, lowering and raising them in response to market conditions. The company has also discontinued specific trims with little notice, as seen with the recent removal of the entry-level Cybertruck earlier this year.
Tesla’s move comes as the company posted its third-quarter delivery figures, reporting 462,890 vehicles delivered between July and September 2024. While this represents a 6.4% increase from last year's period, it fell short of analysts’ expectations, which forecasted over 469,000 deliveries. The shortfall could affect Tesla’s chances of meeting its 2024 delivery target of surpassing the 1.8 million vehicles sold in 2023.
Tesla is still focused on expanding their lineup, with rumors that a more affordable model could arrive by late 2025. It’s unclear whether this will be a new model or a simpler version of the Model 3, but Tesla is likely aiming for a lower price to stay competitive as more automakers enter the EV market.
The Long Range RWD Model 3 is Tesla’s least expensive option. While it comes with a higher price tag, it offers a longer range and better tax credit eligibility. Buyers must adjust to the new price, but the extra range and potential savings could make it a worthwhile trade-off.