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Tesla Gets Feedback on More Affordable Models. Hint: It's Not Inspiring
TeslaTesla(US:TSLA) The Motley Foolยท2025-10-18 22:23

Core Insights - Tesla has introduced more affordable versions of its Model 3 and Model Y, but this move has raised questions about the company's commitment to maintaining its luxury brand image [1][3][5] - Significant cost cuts have been made, including a reduction in battery capacity and various feature removals, leading to a price drop of approximately $5,000 for the Model Y and $5,500 for the Model 3 [3][4][5] - Initial consumer and investor reactions have been mixed, with concerns about the perceived loss of quality and performance in the new standard models [6][7] Cost Reductions and Features - Tesla has reduced the battery capacity by about 10%, saving an estimated $1,500, and made other changes such as smaller wheels and less powerful motors, contributing to overall cost savings [4] - The Model Y Standard now starts at $39,990, while the Model 3 Standard starts at $38,630, both significantly lower than previous trims [5] - Feature removals include no ventilated seats, fewer speakers, and less ambient lighting, which have sparked debate over whether the new models still represent the Tesla brand [3][4][6] Market Response and Future Implications - The initial response to the new models has not met investor expectations, with some analysts noting a decline in performance compared to previous versions [6][7] - There are concerns about whether the new lower-priced trims will attract new customers or simply cannibalize existing sales, potentially impacting profit margins [7] - Tesla is in a transitional phase, shifting focus from being primarily a vehicle manufacturer to exploring areas like robotaxis and AI, which may influence long-term investment strategies [8]