Tesla Launches Budget-Friendly Model Y and Model 3

Tesla just dropped the long-awaited 2026 Model Y Standard, the most affordable version yet of its best-selling electric SUV, and it’s arriving alongside the 2026 Model 3 Standard sedan. Both trims cut prices by about $5,000 compared to their Premium versions, but they also lose a few high-end touches in the process.

Tesla’s Most Affordable Model Y Yet

The new Tesla Model Y Standard starts at $39,990, while the Model 3 Standard (RWD) begins at $36,990. That price drop puts Tesla’s two most popular EVs within reach of a much wider audience, even as the company phases out the federal $7,500 EV tax credit.

Despite being cheaper, the Model Y still offers what matters most to Tesla fans: solid range, strong performance, and access to the brand’s Supercharger network. The EPA-estimated 321-mile range is only slightly lower than the Model Y Premium’s 357 miles.

Tesla says the Model Y Standard “features restyled front and rear lights” (they removed the lightbars), and while the company trimmed some creature comforts to hit that lower price point, it hasn’t compromised the core tech experience that defines the brand.

What’s Missing in the Model Y Standard

To make the Model Y more affordable, Tesla had to strip away a few luxuries. Gone are the panoramic glass roof (at least from the inside view), the rear passenger screen, and premium leather seating. The company also removed frequency selective dampers, replacing them with simpler passive ones – a change that may affect ride comfort.

Other notable omissions include AM/FM radio (everyone streams off their phone these days anyway), smaller 18- and 19-inch wheels, and a “Closed glass roof” that has a headliner to cover the glass from the inside. The result is a more basic, practical setup that still keeps Tesla’s familiar design language.

Performance takes a small hit, with a 0–60 mph time of 6.8 seconds (compared to 5.4 seconds on the Premium model). Top speed is capped at 125 mph, and charging speeds have dropped slightly from 250 kW to 225 kW, meaning that you’re now looking at around 160 miles of range in 15 minutes on a Supercharger.

Still Packed with Tesla Tech

That said, even in Standard trim, the Model Y keeps some of Tesla’s best features. Owners still get Supercharger access, automatic route planning, mobile app controls, and safety features like Sentry Mode and Dog Mode.

However, Autopilot isn’t standard on this model. Instead, it includes adaptive cruise control, automatic emergency braking, and blind spot monitoring – but it lacks the “Autosteer” lane-centering system.

The good news? Tesla built the car with all the necessary hardware for Full Self-Driving (FSD). Buyers who want it can unlock the feature with an $8,000 software upgrade. According to Tesla, the Standard versions “can ‘drive’ themselves ‘with your active supervision.’”

Model 3 Standard: The Same Approach in Sedan Form

The 2026 Model 3 Standard (RWD) follows the same playbook. It now starts at $36,990, offers up to 321 miles of EPA-estimated range, and cuts costs by ditching certain luxury items, including ventilated seats, power-folding mirrors, and the panoramic sunroof.

Acceleration is slightly slower too, with a 0–60 mph time of 5.8 seconds, roughly 0.9 seconds off the Premium model’s pace.

Why This Matters

Tesla has long promised a truly affordable EV, and while this isn’t quite the $25,000 car Elon Musk once teased, it’s the company’s biggest move toward that goal since shelving the low-cost EV project in 2024.

With the federal EV tax credit now gone, Tesla is hoping the reduced pricing will help maintain momentum in a market crowded with strong rivals like the Hyundai Ioniq 5, Nissan Leaf, and Chevy Equinox EV, all of which start in a similar price range.

Even so, these new Standard models give budget-conscious buyers a way to finally get behind the wheel of a new Tesla without breaking the bank.

The Bottom Line

The 2026 Tesla Model Y Standard and Model 3 Standard trims mark a new era for the brand, one focused on accessibility rather than pure luxury. With a mix of familiar Tesla technology, impressive range, and lower price tags, they could be the gateway for a new generation of EV owners.

Deliveries for both models are expected to begin later this year.