Tesla shares fell nearly 3% to about $440 on Tuesday afternoon, even as the company launched new entry-level versions of its Model 3 and Model Y vehicles.
The new Model Y Standard Rear-Wheel Drive starts at $39,990, reducing the entry point by $5,000 from its previous base price of $44,990.
The Model 3 Standard RWD is priced at $36,990. Both vehicles offer an EPA-estimated range of 321 miles, according to Tesla’s website.
Pricing details were highly anticipated amid concerns that lower MSRP could cannibalize demand for its higher-end trims.
Tesla shares were trading 0.9% lower on the day, moments before the release of the new version on the website. As of press time, the stock is trading $2.5 lower at $442.
The introduction comes a week after the expiration of the $7,500 US federal electric vehicle tax credit, which effectively raised out-of-pocket prices for consumers from October 1.
The new Model Y features several cost-saving modifications, including a closed glass roof instead of the panoramic one found in higher trims, a textile-and-vegan-leather interior, and manual-adjust steering rather than power controls.
Other differences include LED headlights, manual-folding mirrors, and auto high beams.
Production of the new Model Y is expected to begin later this year at Tesla’s Gigafactory in Grünheide, near Berlin.
During an internal meeting with employees this week, plant head André Thierig had teased that the new variant would be about 10% cheaper than the current Model Y lineup.
Originally planned for the first half of the year, the launch was delayed by several months and is now expected to bolster Tesla’s sales heading into the final quarter.
