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Tesla's answer to a murky EV future: Shrinkflation

yahoofinance | 2025-10-08 15:14 | 118 views

Tesla [has an answer](https://finance.yahoo.com/news/teslas-answer-to-a-murky-ev-future-shrinkflation-100055656.html) to the end of electric vehicle tax credits and slowing sales: slightly cheaper EVs. The electric automaker [unveiled lower-cost versions](https://finance.yahoo.com/news/tesla-to-reveal-cheaper-model-y-in-response-to-loss-of-tax-credit-131941343.html) of its bestselling SUV and sedan on Tuesday, in an event [whose teaser ginned up more excitement](https://finance.yahoo.com/news/tesla-stock-slumps-after-initial-jump-on-x-posts-teasing-product-launch-reported-to-be-cheaper-model-y-143110706.html) than [the double feature](https://finance.yahoo.com/news/tesla-reveals-slightly-cheaper-standard-184745030.html?fr=sycsrp_catchall). Wall Street appeared to like the announcement (+5%) more before people learned what it was (-4%). Tesla is a (cheaper) car company again. And while more competitive prices may goose vehicle purchases, the late turn toward affordability is a curious choice when Elon Musk's company [is supposed to be on the verge of a grand AI transition](https://finance.yahoo.com/news/teslas-tax-credits-are-ending-but-the-ai-benefit-is-only-beginning-100056802.html). This is like a tech giant celebrating its discounted smart speaker just before the hyped release of a superintelligence app. Why invest in a lesser version of a VCR when your best people are busy building a streaming service? Sure, there is [a business case to offer products](https://finance.yahoo.com/news/tesla-teases-tuesday-event-focus-043556880.html?fr=sycsrp_catchall) at lower price points, especially now, to make up for the disappearance of the $7,500 EV subsidy from the government. And with that math essentially canceling itself out, we are back to a slightly less premium car for the same amount of money. Call it "[car price shrinkflation.](https://finance.yahoo.com/news/teslas-answer-to-a-murky-ev-future-shrinkflation-100055656.html)"

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Comments (7)
Bulky_Specialist9645 2025-10-08 16:05

This year 70-80% of all EVs were leased, not purchased. The $7500 was used to substantially reduce the payment by around $300 per month. It's never been about a cheaper car, just a payment. This decontented Tesla does nothing to address what is going to take Tesla deliveries off a cliff in Q4.

torokunai 2025-10-08 16:22

This was clearly a panic reaction to OBBB arriving as a [Doom Blade](https://gatherer.wizards.com/M12/en-us/95/doom-blade) on Tesla's business model. It's really quite parlous that neither Berlin nor Shanghai has a local-designed smaller offering for their respective markets . . . $1,500 billion market cap but the supergenius's gotta control everything.

mishap1 2025-10-08 19:30

The lease provisions allowed people with either too high an income ($300k+ married) or for EVs that were too expensive ($80k+ for trucks/SUVs). Lot of people were just cashing in on the discount in the upper end.

Icy_Car803 2025-10-08 22:12

Isn't Shrinkflation is the nickname Elon's surrogates use for him?

iftlatlw 2025-10-08 23:10

The world market is the bigger issue, on top of an uncompetitive product which isn't a leader anymore.

TOPLEFT404 2025-10-09 11:33

Cat is out the bag! Tesla makes poor quality vehicles and tech announcements are for show. FSD is really camera driving without liability. They don’t report accidents. The CEO is a Nazi. They could go down to 80s Chevy Chevette prices I still wouldn’t buy

BringBackUsenet 2025-10-21 21:35

I'd rather have a '87 Yugo.

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