Tesla unveils the Model Y and 3, which some consider too expensive despite being “affordable.”

Tesla introduced «affordable» versions of its best-selling Model Y SUV and Model 3 sedan. But others said that the beginning costs of $39,990 and $36,990 were too costly to entice a new class of purchasers to the electric vehicle company.

CEO Elon Musk has marketed the car as a method to reach a wider variety of buyers, stating last year that a price below $30,000 after incentives was critical.

Tesla is attempting to reverse dropping sales of its older portfolio, despite increased competition in Europe and China and the elimination of a $7,500 tax credit. The new automobiles have some premium finishes and features, yet they have driving ranges of over 480 kilometers.

Tesla shares fell 4.5%, while Tesla bull Dan Ives, an analyst at Wedbush. expressed disappointment that the cars were only around $5,000 cheaper than the next-tier models.

The new basic versions are more expensive than the cheapest US models from September. When the now-expired tax benefit was included.

Musk has promised mass-market vehicles for years, but last year he dropped plans for a whole new $25,000 electric vehicle, as Reuters first revealed. Instead, he chose to construct lower-cost versions based on Tesla’s current models. Sparking investor and analyst concerns that cheaper cars would reduce sales of older vehicles and hinder growth.