Tesla’s new “affordable” Model Y and Model 3

Tesla’s new “affordable” Model Y and Model 3 trim prices but not enough to change the market—they buy the company time, not transformation.

Episode Transcript

(00:01):
Hey everybody. Welcome back to the Elon Musk
Podcast. This is a show where we discuss
the critical crossroads that shape SpaceX, Tesla X, The
Boring Company, and Neurolink. I'm your host, Will Walden.
So Tesla is going to launch a more affordable Model Y and

(00:22):
Model 3. It's not the $25,000 model that
everybody was hoping for. No, it's like $40,000.
This is the affordable version of its Model YSUV and Model 3.
One of those $39,990.00, the other one's 36,990.

(00:42):
They're available for order withdeliveries expected in December
and January. The next trim model up is $5000
more. So my guess would be to to save
the $5000 and then buy them the next the better model.
Don't worry about these ones. These yeah, it's still $40,000.

(01:03):
That's a huge amount of money for a car.
We were all expecting a $25,000 car or maybe 32,000 would have
been nice for a new car. But yeah, we were, we were not
given that we are going to 40 thou basically 40,000, a 37,000
and a $40,000 car. Now they're doing this because

(01:28):
they're trying to reignite slow sales.
But the pricing landed higher than a lot of people expected.
And investors and potential buyers unconvinced that Tesla
has truly entered the mass market because Elon Musk has
promised this, promised this foryears.
We were supposed to get a, a cheap, you know, inexpensive, I

(01:51):
should say a value model of a Tesla sometime last year or the
year before ish. This is not it.
This is not affordable for most people.
So this is what they are, thoughlet me tell you what they are.
The new versions cut some of Tesla's features, premium

(02:12):
finishes, high end driver assists and automatic seat
adjustments, but they still get 300 miles of range.
Plus, the company said the changes allow for lower
production costs and quicker delivery schedules.
But the threshold that would bring in new budget minded
buyers for the price is way too high.

(02:35):
Tesla had previously positioned affordability as the key to
unlocking growth. Neon Musk even said last year
that a sub $30,000 vehicle afterincentives was essential for
broad adoption. So if you look at it like this,
the $7500 tax incentives are going away.
So they price this so it'd be around $30,000 if you get the

(02:58):
$7500 incentive from the US government.
So I can understand them pricingit at 37,000 and 30 and 40,000,
then it's around 30,000 for each.
But those are going away. Tesla stock fell 4.5% following
the launch, and investors saw the move as a pricing tactic

(03:22):
rather than a meaningful productadvance.
Remember when Tesla would advance their products all the
time and create new wonderful things instead of stripping
things away? What they should have done.
A lot of people have talked about this too, and there's
they're going to do this eventually.
I think if they don't go full AIand robotics, they're going to

(03:47):
build an affordable vehicle under $30,000, but I believe
that's far away. They don't have the capacity to
do that now and they don't really care to, I don't think
because they're making enough money right now.
The stock is crazy. People will the stock will
rebound, of course, because Elonor Tesla will come out with

(04:10):
something in the next few days to pump up the stock again.
Elon always says something. I'll post something on Twitter.
Like, you know, working with SpaceX and Tesla together is
whatever. You know, people thought this
was going to be the Roadster too.
I thought it was not going to bethe Roadster.

(04:30):
That would end cool. If we would have had two
announcements, a new Roadster and also a new $25,000 vehicle,
that would have been great. But that didn't happen, of
course. But you know, the standard
versions of these vehicles that are out now that just got
announced are roughly $5000 cheaper than the next level

(04:53):
trims. That's not really a new demand
though, $5000. When you're buying a car, for
most people it's saving up for afew more months. 3-4 months and
you can get 5000, maybe not 5000, but you can get a
substantial amount of money and get a loan, you know?
So the EV tax credit is expiring, which had helped

(05:18):
sustain its lower end sales. Without that cushion though, the
new Model 3 and Y now cost more than they did just a month ago
when incentives were still active.
And Tesla's decision to adjust pricing instead of developing an
all new low cost model is a new shift.
Last year, he quietly canceled plans for the long promised

(05:39):
$25,000 EV, choosing instead to rework existing platforms for
affordability. The decision raised concerns
amongst investors that cheaper variants could cannibalize
Tesla's high margin models also.So there's tension between
Tesla's growth and its need to maintain profitability in the
tightening EV market. They have, they have a lot of

(06:01):
competitors now. BYD is just ready to take it.
Take them out all over the world.
Tesla's losing market share because BYD has very inexpensive
models that are amazing cars, and Tesla can't compete with
that. They need to have that $40,000
car, don't they? But these new cars, they drop

(06:22):
amenities like heated rear seats, an LED light bar on the
Model Y, and Tesla's auto steer system.
Interior materials are simpler too, with textile seats standard
and vegan leather optional on the Model 3.
Tesla also switched to manual mirror adjustments, a cost
saving move that marks a clear step away from the brand's

(06:44):
luxury image. The company's decision to scale
back features rather than introduce new tech is a weird
one. Many see the cars as a practical
move to stabilize revenue, whileTesla continues to pivot toward
AI driven ventures such as robotaxis and robots.
Others view it as a sign to retreat from Tesla's innovation

(07:06):
driven identity. So this could be compared to
dropping Steve Jobs turtleneck for sort of like a Walmart
hoodie. You know, you need to appear
premium and practical at the same time.
But Tesla, they're still premium.

(07:29):
They're not affordable from mostpeople.
Most people aren't going to buy a $40,000 car, to be honest with
you. They're going to buy a $30,000
car and these are $40,000 cars. This is how it is.
So competition is growing fiercer.
Like I said before, in the US, Chevy's Equinox EV and Hyundai's

(07:51):
Ionic 5, you know, they're, they're just ready to take out
Tesla. Tesla faces more than a dozen
electric and hybrid models priced under 30,000 in Europe.
In China, domestic automakers, BYD and others are sub 35,000.

(08:13):
So Tesla is squeezed between cheaper local rivals and premium
incumbents. But it's difficult.
It'll be difficult for Tesla to stand out.
They pioneered the EV industry, but can they continue to pioneer
to the next level? I'm not sure.
After this, it seems kind of weird.

(08:35):
They just downgraded a few things and then I think most
people will just save the money and or save the money up for
the, you know, few months and get a better model.
But, you know. Sales in the third quarter this
year rose to a record as buyers rushed to claim tax credits
before their expiration on September 30th.
But industry forecasts suggests that momentum won't last, is

(08:59):
going to level out or sink, and there's no incentive from the
government anymore. Tesla risk seeing demand
softened through the end of the year unless the new models gain
traction. I don't think they're going to,
though. They're too expensive.
Musk acknowledged the challenge earlier, saying during Tesla's
July earnings call that the desire to buy the car is very
high. It's just that people don't have

(09:20):
enough money in the bank accountto buy it.
So yeah, I mean, you want it nice to say like, yeah, I want
nice things. But you know, it's like, yeah, I
want a mansion too. I want a yacht.
I want to, I want to rocket. I want a helicopter.
And I don't have the money for those things, but it'd be cool
to have them. There's the desire to buy the

(09:41):
car. So I think Elon's head is in the
wrong place here. I'm going to go out a limb here.
I'm going to say something that not a lot of people would talk
about that are in my position and saying this is a stupid
move. I don't think people, I don't

(10:04):
think people care that much. You know, you're going to have
your people that are just super psycho Tesla fans that are like,
this is an amazing move. But if you step back, and I'd
like to step back from every topic that I cover here, step
back and think about it objectively, I don't see a

(10:27):
difference between a $40,000 carand a $35,000 car.
It's $5000, but they're still super expensive to the normal
person. If it's a 40 thousand $45,000
car, you know, there's a certainmarket that has that kind of
money for a vehicle and they'll justify it in any way they can,

(10:50):
which is I don't have to buy gas, never have to go to a gas
station again, which is great for a lot of people.
They just plug in it at their house.
They'll justify it by saying, well, I can keep this car for a
very long time. I can keep this car for 10 years
and it won't, you know, I won't really need any maintenance on
it. I just need new tires eventually

(11:11):
or brakes, you know, and some some other small things.
So the maintenance repairs are minimal.
So they get their money's worth,but they also have the 50 or
$60,000 to buy the car. And if you don't have $35,000 or
$40,000 to buy a car, you're notgoing to buy a car anyway.
Not going to buy that car. You got to find a cheaper

(11:32):
alternative. Might buy a hybrid.
And at this point I don't see a problem with hybrids at all.
And most people don't need an EV.
Most people would love to have an EV to get around town and
most people just drive around their city or their town.

(11:54):
Most people don't take long roadtrips.
You go to work every day, you come home and that's pretty much
it for most people's lives. And every once in a while you'll
take a long road trip on the weekend.
But that's why a hybrid is a really good choice because you,
if you have your, your day driver, which is electric, and

(12:18):
then on the weekends, crank up that, crank up that gas engine,
that ICE engine, and, you know, get out of town.
But a $40,000 EV when Tesla was saying that they're going to
have less expensive E VS $30,000would have been great.

(12:42):
You know, if if he could have got it to 29995 and just taken
out a few other things, that would have been a game changer
because everybody wants like people want a Tesla.
Like he said, people want a Tesla.
I think it'd be great to have a Tesla, but how could you have a
stripped down Tesla that is a great vehicle but doesn't cost

(13:07):
$45,000 or $40,000? You'd have to take out a lot of
stuff. Does it change a lot of
manufacturing and would it be worth it?
I think if you get under 30,000,people would buy it.
It just, it's that number, you know, $30,000 you can buy an ICE
vehicle. And I know people have the

(13:27):
reasons for not wanting an ICE vehicle, but you can get a
really nice ICE vehicle, ICE carfor under $35,000 for under
$30,000 that has most of the things that Tesla has.
You know, it's not it's fancy, you know, you don't have full

(13:48):
self driving, but have lane assist that's nice.
Cruise control does a lot of work, you know, and you have you
have sensors too, right? So you don't need your car to
drive you everywhere because look where you're going.
Get off your phone and the the those vehicles are what

(14:12):
everybody else buys, you know, can buy like a technologically
advanced Honda for. Let me just look this up real
quick. Hold on, bear with me here.
I'm not going to edit this because I think it's I think we
should do this together. We're even do it like Carvana
style, because that's where people want to find a deal,

(14:36):
right. Let's go to Carvana and let's
look for Honda and we'll look for something that's like how to
CRV? How about that 33,005 brand new

(14:57):
nice vehicle, 2025, What does itgot?
What do we got? Key features here Apple car
plate that's all you need Bluetooth music cool hands free
calling OK lane assist cruise control automatic braking blind
spot sensors collision detectionlane departure warning rear

(15:18):
cross traffic alert rear view camera I mean and I'm I'm a fan
of Tesla. I know the technology is
amazing, but if you're in the $35,000 range and you want and
you want something that's a daily driver, but you need,

(15:38):
maybe you need something bigger,maybe you need a Model Y that's
$37,000 or $40,000, Sorry. But if you go down the scale,
you see some of the 33,032 thousand really great shape,
basically brand new. Would you pick that up?
Maybe you might, but maybe you don't like Hondas.

(16:00):
That's cool. I understand that.
Let's see how much a used Tesla is here.
We're doing this all together right now.
By the way, I used Tesla. We're going to do these prices
together. A 2025 Model 3 with 5000 miles.

(16:23):
Let's see here. What do we got?
2024 Model Y for 34590, 2023 model 3.
So if you don't need the cuttingedge, you know, if you don't
need the cutting edge thing, youcan get a 2023 model 3 for
30,000. Sounds great, right?

(16:45):
You get 2025 model 3 for 40. All black out of black, all
blacked out. It looks pretty sick, $2000 cash
down. You know, that's their estimate,
$2000 cash down. All right, that's not bad,
right? So if you look back at what

(17:06):
Tesla is offering, it's about a 35,000 to $40,000 vehicle and
it's cut down. So it's not sub 330 thousand,
which would have been great, butyou can buy an ICE car for a

(17:26):
decent price and you could, you know, a nice ICE car for a
decent price. And that's what a lot of people
probably do. I'll be like, you know what?
This one isn't for me. I need something $20,000 less,
you know, or, or whatever, you know, the hottest CRV or Toyota
Rav 4 or something. Rav 4 is $25,000 to see those

(17:46):
things everywhere. It's not the fanciest car.
It's not like the prettiest car,but I see them everywhere.
I think it's, I think people arehaving good luck with them and
also something like a Honda. You'll never like the Honda.
They're so reliable. 2025 HRV, sub 30,000, that's it.

(18:11):
You know, it's a good car and most people, they'll make their
decision on the features that the car has and basically does
it do the things I needed to do and can it get me from A to B
safely? And will it like, I just wanted
to be dependable. I don't want it to break down.
I wanted to be safe. That's it.

(18:34):
You know, in most of these, mostof these vehicles, these ICE
vehicles, sub $30,000 ICE vehicles, they're fine.
You're going to buy, you're going to buy a fine car.
It's and I think people underestimate that when they're
searching for a Tesla or anotherEV because these are great

(18:55):
vehicles for what they are, you know, and they might not, might
not be a thing. Let's see if they have a Rivian.
Let's do one more. Let's see what you can get.
I've never, you know what, I moved to the South and I see
these Genesis cars everywhere. Those are ugly though.
Not a fan, not a fan. Let's look for Rivian Land

(19:26):
Rover. Let's let's go Mercedes see if
we can find a sub 30,000 Mercedes.
Dude you can get a 2024 MercedesMercedes-Benz C Class for
33,000. You can get a Mercedes for 40
thousand 2025. Why wouldn't you get a benzo yo
get a a GLB for 35,000? Why wouldn't you get one of

(19:53):
those instead of a Tesla? It's up to you.
You know, most people would be like, man, I got 40,000, do I
want that benzo? Maybe.
Do you want this Porsche? I don't know.
There's Pulsar. Would you buy a Pulsar?
I don't know. Who knows what's going to happen
with that company or with this car.

(20:13):
Sorry. If you buy a Pulsar now, what's
going to happen to it? Is it going to be able to be
serviced? Maybe.
I don't know. They're nice cars, though.
I mean, they're not bad. But you can get a pulse star
pulse star 2 for 36,037 thousand.
But it's the same thing that literally has the same thing as

(20:36):
the how that I was talking aboutbefore.
Lane assist, cruise, adaptive cruise control, automatic
emergency braking, blind spot sensors, collision detection,
lane departure warning, parking assist, which the other one
didn't, but who needs that anyway?
I'm not good at parallel parking, so I could use that
actually. Is it worth the 3637 thousand

(20:57):
price tag though? I don't know rear cross traffic
alerts. It's I mean, and also the other
you know, it's it's an EV. It's nice and it has all the has
a nice interior and big screen. Apple car, play Android, all of
the above hands free calling. I like how they put that.

(21:23):
It's like, man, every car just comes should come standard with
that. You know, it's just be like, Oh
yeah, hands free calling. Of course, like you have a
speaker and you have a microphone in your car.
Of course you got to do hands free calling.
It's so funny. It's so funny the way they try
to upscale things that are just normal now.

(21:44):
Bluetooth music. Yeah, the parking assist, yeah,
if you can parallel park for me,man, might be worth that money.
I there was a spot that I was trying to get into the other
day. I just couldn't fit in.
Couldn't do it. I was, I was going to the city
to film something and I just couldn't fit my car in there.

(22:05):
I had to go around the block andwalk like 2 blocks because my
car, it was in between like a giant construction truck and
another giant construction truck.
I was like, yeah, I could get inthere.
Couldn't fit. So yeah, if this pole star two
could make it in there, I'd be pretty happy with that.
I'd pay the extra money for that.
That's worth it. So I don't know.

(22:28):
What do you think? Let me know in the comments.
What do you think of this whole shebang here?
The whole sub $40,000 basically 40 to 40 to 37. $1000 vehicle.
It's not that much, right? Not that much of a difference.

(22:48):
37, 37 at 40, it's like $3000 difference in these two models.
Model 1 in the Model 3, it, it just doesn't make sense to me.
It's still a lot of money. More affordable would be.
Great, take out a few other features.
Make them sub 30. People would go wild.

(23:10):
People would go insane. The stock would have went crazy
if it was sub 30 guaranteed. Let's check the Tesla stock
right now, see where it's at. Probably went up a little bit,
not still down 4.45% today. We'll check it tomorrow, but
earlier today it was at about four 49450 high and now it's

(23:34):
down to 433 O 9. So.
Yeah, stock took a little dump, but yeah, it'll come back.
And BYD stock went up .55%, Hyundai went up 2.21%.
Hyundai what's up with? You all right all right thanks

(23:58):
everybody take care of yourselves and also thank you
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I have AI don't know. I said 1000 episodes yesterday.
It feels like I have 1000 episodes.
I might have 5 or 600. I must have more than that.

(24:19):
I'll have to check that sometimeand get back to you guys.
But it must have more than a 500episodes of this show.
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(25:06):
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(25:26):
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Let's see, I have milestone markers on my Spotify, but let's

(25:51):
see, let's see what we got goingon here.
And this is just Spotify for podcast is when I switched over
how many how many views I've hador how many downloads I've had
in all time. OK, so and this is because of
you. Over 3 million.
Downloads of the show. So in that sense.

(26:13):
All time let's. Do how many years has it been
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I know it's taking a little bit.I'm not sorry about this, but I
want to. I want to tell you guys what's
up. But anyway, we have. 3,000,000
Downloads 3. Million plus.

(26:36):
Downloads of the show. And.
We have about. I don't know.
How many followers on? Spotify do we have now let.
Me, go back here. See what we got going on.
We have 3 million. 15,000. 652 streams and downloads, almost

(27:04):
18,000 Spotify followers and I'mjust doing Spotify because
that's the one I have pulled up right now and I want to say
thank you for everybody. It's 33 million.
That's insane. Like that's crazy to me and.
I'm going to get. You some other stats some other

(27:25):
time, but I think you know, if we can, we can all stick
together here. 5 star ratings. So I started here.
Let's get you some other stats here.
What's what's that? So 2023 is when I started with
Spotify. I started working with.
Spotify here. Yeah.

(27:48):
So in that. But I've had the show since
2019, so it's six years old. I've been doing it for six
years. That's crazy, crazy, crazy,
crazy. So much, so much time.
So I've been around for six years, going to continue doing
it. Can't stop.

(28:08):
Won't stop, as they say. I'm still.
Trying to figure out. How many episodes I have?
Because it doesn't tell me in mystats here.
Just like look at all these episodes.
Cool, how many do I got? Doesn't tell me.
Don't tell me straight up front,but I have. 1000.

(28:29):
And eleven, 11101 episodes. That's where we're at now. 1100
and one 1101 episodes. That's.
Crazy 3,000,000 downloads 1101 episodes.
So thank you for that. Thank you for all your support

(28:51):
through 1101 episodes of the show.
That's a big deal. I didn't even realize that I was
over 1000, but I was just guessing the other day, so thank
you. I appreciate you.
All right, take care of each other.
And I used to do the regular outro because here we are.
Let's go, baby. Hey.
Thank you so much. For listening today, I really do

(29:14):
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