Tesla has finally unveiled two new low-cost electric car models designed to compete with some of the largest manufacturers in the world as it loses its grip on the best-selling EV brand.
Following a recent downturn in sales over the last year, Tesla is aiming to reclaim its title as the world's leading manufacturer of electric vehicles.
While drivers have been swayed by growing competition in the EV market, cheaper alternatives or CEO Elon Musk's political involvement, Tesla will be hoping the new models can turn its fortunes around.
The new standard Model 3 will retail for $36,990 (£27,587), with a top speed of 125mph, an estimated EPA range of 321 miles and a 0-60mph time of 5.8 seconds.
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The larger midsize Model Y SUV will start from $39,990 (£29,827) and have an identical 321-mile battery range.
At present, the vehicles will only be available in the United States, although it is expected that they will be available in Europe and other key markets in the future.
As with previous models, the new EVs will come packed with impressive technology, including integrated Grok AI, Sentry Mode, Trip Planner, and full integration with the Tesla app.
The announcement comes as President Donald Trump's "Big Beautiful Bill" removes a $7,500 (£5,591) tax credit for zero emission vehicles, which could lead to a sharp decline in the number of EVs sold.
READ MORE: Tesla announces major overhaul of popular models with impressive 466-mile range upgrade
Tesla unveiled the two new low-cost electric models today
|TESLA
Reports suggested that Elon Musk had planned to launch an affordable electric vehicle with a price point of around $25,000 (£18,635), although these plans were scrapped.
The billionaire CEO has turned his attention to other projects, including xAI, Grok and the Tesla Optimus humanoid robot, most recently showing a video of it doing Kung Fu.
Experts have highlighted that the new Tesla models still cost more than the cheapest models in the United States would have cost when the $7,500 tax credit was included.
Following the announcement, Tesla's shares fell around four per cent, with investors underwhelmed by the offering.
The new Tesla Model 3 will retail for $36,990 (£27,587)
|TESLA
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Model Y Standard & Model 3 Standard are here pic.twitter.com/e2kXwAaQ0O
— Tesla (@Tesla) October 7, 2025
Michael Ashley Schulman was scathing in his review of the new models, describing them as Tesla "dropping its Steve Jobs turtleneck and slipping into a Walmart hoodie".
He noted that Tesla was no longer the "cool rebel at the edge of innovation", noting that the brand is trying to "play both Tesla and Toyota".
The new electric vehicles are available to order immediately in the United States, with deliveries expected to begin between December and January.
The new Model Y is being released just months after deliveries began of the upgraded Model Y, which features improved range and a Cybertruck-inspired LED light bar. The latter has been removed from the new model.
Reacting to the new Tesla models, Iain Reid, head of editorial at Carwow, said the affordable Model Y was "headline friendly", but was not yet "for the people".
He continued, saying: "For the moment, it will only be available in the US, but if it does make it here and lands somewhere between £30,000 and £35,000 price point range, it'll undoubtedly attract plenty of attention; a Tesla badge at that price will turn heads.
"But while it's great to see such an established brand pushing to deliver better affordability, this move doesn’t necessarily advance the EV game technologically.
"What a launch in the UK would do is put more pressure on the new challenger brands to rethink how they deliver both value and quality to new car buyers."