Tesla trims prices on Model Y and Model 3 to claw back share — Wall Street yawns

Tesla finally pulled the wraps off cheaper versions of its two best-selling EVs on Tuesday, a back-to-basics move aimed at jump-starting slumping sales. The market’s verdict: meh. Shares slid 4.5% to $443.09 by the close, erasing a rally from the day before.

The new Model Y Standard lands just under $40,000 and the Model 3 Standard sneaks in below $37,000 — even under $35,000 for some New Yorkers after a state rebate. The savings come with trade-offs. The Y loses range and creature comforts, dropping to an estimated 321 miles, swapping microsuede for fabric, cutting speakers, ditching the panoramic glass roof and skipping the second-row screen. The new Model 3 trims driving range and ambient lighting and pares back features as well.

It’s been a bruising stretch for Tesla. An aging lineup, stiffer competition from foreign EV makers, and boycotts aimed at Elon Musk have all taken a toll. The timing doesn’t help either: the $7,500 federal EV tax credit just expired for many buyers, giving would-be shoppers one more reason to wait. Even with the lower stickers, the fresh “standard” trims still sit well above the long-teased $25,000 Tesla that’s yet to materialize.

Analysts weren’t exactly dazzled. The broad takeaway is that investors wanted something truly new, not a de-contented spin on existing models. Meanwhile, rivals are swarming the same price band. Ford’s Mustang Mach-E, Chevy’s Equinox EV and Hyundai’s Ioniq 5 are all jostling around the $40,000 mark, and European showrooms are filling with even cheaper options.

Tesla’s pitch is straightforward: make the entry price less scary and bring more shoppers into the funnel heading into the holidays. Whether that’s enough to reverse market-share losses is the open question. For now, Wall Street is waiting for more than a lighter feature list.

With input from ABC News, Reuters, and Business Insider.