Tesla launches low-cost Model 3 variant in Europe

A 2021 Model 3 sedan sits in a near-empty lot at a Tesla dealership in Littleton, Colo. June 27, 2021. (AP Photo/David Zalubowski, File)

STOCKHOLM — Tesla launched the new, lower-priced version of its Model 3 car in Europe on Friday, two months after its U.S. debut, aiming to boost sales as competition intensifies and demand slows.

Tesla is grappling with softening demand across Europe, where new registrations have fallen sharply this year despite a refreshed Model Y line-up, with many buyers opting for competitor vehicles such as the Volkswagen and Chinese manufacturer BYD’s Atto 3.

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 cannibalizing 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.

(Reporting by Marie Mannes; Editing by Terje Solsvik and Kate Mayberry)