Tesla launches new low-priced Model 3 as rivals surge and buyers drift away

Tesla launches new low-priced Model 3 as buyers drift away

Tesla's Model 3 is displayed during an event a day ahead of the official opening of the 2023 Munich Auto Show IAA Mobility, in Munich, Germany. Reuters

December, 6 2025

(Web Desk): A new lower-priced Tesla Model 3 has been introduced in Europe as the company tries to recover from slowing demand and rising competition.

The launch comes two months after the model’s debut in the U.S., reflecting Tesla’s push to attract more buyers with a cheaper option.

Across Europe, Tesla has been facing a clear decline in market interest. New registrations have dropped sharply this year, even with an updated Model Y now available in showrooms.

Many customers are switching to other electric vehicles, especially the Volkswagen ID.3 and BYD’s Atto 3, both of which are gaining rapid popularity in several European markets.

Tesla hopes that offering a more affordable Model 3 will help bring back attention at a time when buyers have more choices than ever in the EV market.

Tesla seems worried about losing its place in Europe. Buyers now have many good EV options, so Tesla needs stronger moves. A cheaper Model 3 might help, but the competition is growing very fast.

The Model 3 - which Tesla describes in a post on X as having an "ultra-low cost of ownership" - drops some premium finishes and features but offers a driving range above 300 miles (480 km). Deliveries are expected to start in the first quarter of 2026.

CEO Elon Musk has long promised mass-market vehicles, though last year he scrapped plans for an all-new $25,000 EV, opting instead to build lower-priced versions of existing models, a shift that has sparked concerns among analysts about cannibalising sales of higher-margin cars.

A low-cost Model Y crossover was launched in October as Tesla seeks to defend its market share against European and Chinese rivals offering increasingly lower-priced electric cars in Europe, with many selling EVs below $30,000.

The new Model 3 Standard is listed at 37,970 euros ($44,299.60) in Germany, 330,056 Norwegian crowns ($32,698) in Norway and 449,990 Swedish crowns ($47,820) in Sweden, according to Tesla's website. On its German website, the second cheapest Model 3, which is called "premium", comes in at 45,970 euros.

Tesla introduced the Standard variant of the Model 3 in the U.S. in October, where it currently sells for $36,990.

Musk has been shifting the company towards artificial intelligence, focusing on robotaxis and humanoid robots, but the new cars are key to hopes of near-term revenue growth.