When Tesla teased that it would launch a new vehicle last week, its stock rose in anticipation. Expectations were sky high. Tesla has been swamped by a tsunami of competitors offering arguably better EVs for less in recent years. Could this be where Tesla undercuts the entire industry once again? Could this pump their sales numbers back to pre-“Roman salute” levels and end their tepid slide into unprofitability? Then the event happened. All the vehicle was was a cheaper, stripped-down version of not just the Model Y but also the 3, dubbed the “Standard”. And as quickly as it came, the stock almost immediately slumped back down. Why? Well, it’s because these vehicles are nowhere near good enough, and they highlight just how badly Elon has cocked things up. Let me explain.
Over the pond, we have had a standard version of the new Model Y and 3 for a while now. Something Americans haven’t had for a good while. They are essentially identically specced to the Long Range variant, differing only in having a single motor and a slightly smaller battery. Here in the UK, we will continue to have the “old” EU standard variants, while the EU is switching to these “new” standard variants.
And that is an issue, because the “new” variants aren’t as good as the “old” ones.
For one, the “old” standard variant cars are significantly better equipped than the “new” ones. They have the exact same features and technology as the higher trim levels. But to make the “new” standard variants “cheaper,” Elon has stripped out the power-adjustable steering wheel, HEPA air filter, rear-row heated seats, adaptive beams, power-folding mirrors, panoramic glass roof, active suspension, autosteer (autopilot), the AM/FM radio and light bars. He has even fitted cheaper wheels, reduced the quality of the fabrics and reduced the colour options inside and out.
To give you an idea of how much this should cut costs, active steering and adaptive suspension alone typically cost thousands of dollars to spec.
So, you’d expect these “new” standard cars to be significantly cheaper than the “old” ones, right?
Well, no. They aren’t. Look at the table below:
**Comparing US car prices to EU prices is hard because we use a different currency and include taxes in the sticker price, while Americans don’t. As such, I have deducted tax from EU prices, and converted the currency to USD on the day of writing**
Let’s break this down, starting with the Model Y.
The “old” EU Model Y Standard, which we still have in the UK, is about $5,000 more expensive than the “new” one and has 21 miles less range. But, it is also a second faster to 60 mph, and has all that extra kit! As such, the “new” standard doesn’t actually have a better value proposition than the “old” one. In fact, it is arguably a worse value proposition, as $5,000 more for the “old” standard gets you arguably a whole lot more car.
The Model 3 is even worse.
The “old” and “new” variants actually cost the same, have the same range, and practically the same 0–60 mph time. But again, the “old” standard has thousands of dollars worth of kit that the “new” one doesn’t have. The “old” variant is a substantially better value proposition!
Tesla is going backwards. These new standard variants are ripping people off.
Why do that?
Well, as I detailed in a previous article, I suspected this would happen.
Firstly, Musk has abandoned EV manufacturing in pursuit of chasing AI dreams with the robotaxi and Optimus robot. As such, it has effectively cancelled the affordable “Model 2,” which was set to use a totally new vehicle platform to bring the price of production way down. The Model 2 was critical for Tesla to boost sales figures, increase profits, and keep its share of the EV market.
Secondly, this past year has seen Tesla sales drop so dramatically that the company is practically unprofitable. The only thing preventing Tesla from posting quarterly losses has been its sales of emissions credits, which are set to stop soon.
These “new” standard variants are an attempt to answer both issues. By offering cheaper EVs in the US, they can boost sales and increase revenue. This won’t be in the same league as a global bespoke, affordable EV platform could deliver, as it would be much cheaper, but it’s all Tesla has right now. However, by also stripping down the standard model and selling it at the same price as the older, far better-equipped model (that the US hasn’t had for a while), they can also boost profit margins. But again, likely not to the same level as a bespoke purpose-built affordable EV platform could deliver.
Basically, this is a half arse attempt to cover up Elon’s woeful mistake of cancelling the Model 2 to pursue AI.
Particularly as the EV market has already massively undercut these “new” standard variants.
Take the upcoming 2026 Nissan Leaf. In its S+ trim, it costs $8,512 less than the “new” Model Y Standard (of which it is about the same size). Yet it gets to 60 mph nearly a second quicker, has 43 miles of extra range, and will be better equipped. It charges slightly slower, taking 35 minutes to go from 10% to 80%. However, Tesla is known for exaggerating its charge speeds, so in the real world, they will likely take about the same time.
Nissan was able to do this by prioritising affordable EV platforms, not chasing AI unicorns, and not trying to fudge a modified decade-old premium EV platform into a new affordable one.
The same is true for the upcoming EV3. It costs the same as the “new” standard cars, with about the same range, acceleration, and real-world charge speeds. But it has far better equipment as standard (and a far better warranty).
These “new” standard cars are not going to save Tesla. They are behind the market, and worse than Tesla’s previous offering. I doubt they will make any difference to Tesla’s sales figures or bottom line. What’s more, they are proof that Musk made a fatal mistake turning his back on the Model 2, and not fleshing out Tesla’s EV lineup. A mistake that, had any other CEO made, would be grounds to be ousted. Particularly as this shows Musk has fully bet Tesla’s future on their deeply questionable AI robotaxis and Optimus robot. Thankfully, it isn’t like we are barreling towards an AI bubble collapse that would make the dot-com bubble look like a breeze… Oh, wait…
Thanks for reading! Don’t forget to check out my YouTube channel for more from me, or Subscribe. Oh, and don’t forget to hit the share button below to get the word out!
Sources: CNBC, BBC, CNN, InsideEVs, Autoexpress, InsideEVs, EV Database, EV Database, EV Database, EV Database, Car And Driver, Car And Driver, Car And Driver, EV Database, Will Lockett
I find it frustrating to watch Musk mismanage Tesla. I feel that he has a tendency to self-sabotage.
The Model 3 production hell seems to have been basically created by Musk’s interference. He wanted to have the factory line fully automated. He thought he was smarter than other automakers and his own production engineers.
He’s over-ambitious and lacking in humility. He seems unable to learn from the failures of others. He’s not Tony Stark / Iron Man. He’s Icarus.