Tesla announced Monday that production of the Model Y Standard has officially commenced at the company’s GigaFactory in Germany.
“Model Y Standard says ‘Hello World’ – Production at Giga Berlin has started today!” the company announced via the ‘Tesla Manufacturing’ X account.
New Affordable Lineup
The production launch follows Tesla‘s October introduction of more affordable versions of its two best-selling models.
The Model Y Standard Rear-Wheel Drive, priced at $39,990, reduces the entry point by $5,000 compared to the previously cheapest Model Y available to US customers at $44,990. The Model 3 Standard is priced at $36,990.
The Model Y Standard was launched in Europe on October 10, though the Model 3 Standard variant has not been announced for the European market.
Cost-Cutting Measures
To achieve the lower price point, Tesla has removed several features from the Standard variants, including the rear passenger screen, glass roof, and ambient lighting.
In the US market, the Autopilot steer feature was also eliminated as the company focuses on driving customers toward purchasing or subscribing to its Full Self-Driving (Supervised) software.
Despite these reductions, Tesla‘s Design Chief Franz von Holzhausen maintains confidence in the value proposition.
“I think you get more than what you pay for,” von Holzhausen said in a recent interview. “I think it feels more premium than the price point ($40k).”
Both Standard variants offer an estimated range of 321 miles (516 kilometers), approximately 35 to 40 miles less than the Premium versions.
Market Reception and Analyst Views
Tesla delivered the first Model Y Standard units in the US last month, though Wall Street analysts have expressed mixed reactions to the pricing strategy.
Wedbush analyst Dan Ives, who maintains the most bullish price target on Tesla, stated the firm was “relatively disappointed with this launch as the price point is only $5,000 lower than prior Model 3’s and Y’s.”
Goldman Sachs analyst Mark Delaney echoed similar concerns, noting that “the degree of differentiation on price and features/form factor for the Standard trims is more limited than we had initially expected for Tesla’s lower cost models.”
Global Production Strategy
While production in the US has not been confirmed, deliveries are expected to begin between December and January.
CEO Elon Musk previously expressed uncertainty about US production, writing on X that “this variant of the Model Y doesn’t start production in the US until the end of next year. Might not ever, given the advent of self-driving in America.”
Expanding Model Y Portfolio
Tesla has been systematically expanding its Model Y lineup globally over recent months.
A three-row version was introduced in China in August, where demand has been particularly strong.
The model sold out for October deliveries by September 10, with current estimated delivery dates indicating that new orders may not arrive until December.
