Tesla has started selling a cheaper version of the Model 3 in Europe. What does this mean for the stock?

Tesla has launched sales of a simplified and therefore cheaper version of its Model 3 electric car in European countries. The company is trying to increase demand for its products in the face of growing competition and declining interest from Europeans. In the first 10 months of the year, Tesla's sales in Europe collapsed by almost 30%. However, investors do not care much about it anymore.

Tesla has named a new version of the Model 3 Standard electric car. It is distinguished by "ultra-low cost of ownership", the company said in a message on its page in social network X. The car is able to travel up to 534 kilometers on a single charge.

To lower the price, Tesla has removed a number of benefits that distinguish the now more expensive Premium version. For example, the company used cheaper materials (for example, for the upholstery of the seats), removed the screen for rear seat passengers, glass roof and improved lighting, and the cars have a less powerful engine and a smaller range, writes Yahoo Finance. The Model 3 Standard starts at €37,970 in Germany, while the Premium version costs from €45,970.

Tesla shares were little changed in price in trading on Dec. 5. However, they rose about 6% in the first week of the month - in parallel with the recovery of the technology sector as a whole, Yahoo Finance noted.

Tesla shares are reacting weakly to news from Europe as investors are now less concerned about car sales, Barron's said. Market participants are now more inspired by the company's artificial intelligence capabilities, including robotaxis and humanoid robots, the publication added. For example, Deutsche Bank analyst Edison Yu set a $470 target price on Tesla shares (3.5% higher than the current price), with $148 for robotaxis and $111 for robots. Together, these businesses are valued higher than the auto business ($170), Barron's reports.

Wall Street initially expected Tesla to release an all-new budget model in 2025 that would expand Tesla's potential market, but the company decided to instead produce more budget versions of its existing electric cars, Reuters and Barron's noted. Analysts in this regard raised concerns that the budget versions would simply take some sales away from higher-margin models, Reuters added.

It is difficult to assess the success of Tesla's strategy: there is not enough data on Model 3 Standard sales in the U.S., and they began after the $7500 tax credit was canceled, Barron's noted. The company started selling the Model 3 Standard in Europe two months after the electric car made its debut in the US.

Tesla is trying to boost sales amid growing competition and slowing demand, Reuters noted. Registrations of Tesla electric cars in Europe in October were 48.5% lower than they were in the same month a year ago, statistics from the European Automobile Manufacturers Association (ACEA) showed. Meanwhile, the total number of registrations in the region rose by 33% in October. In the first 10 months of 2025, Tesla sales in Europe collapsed by almost 30%, according to ACEA.

Many buyers in Europe are opting for competing models such as the ID.3 from Volkswagen and the Atto 3 from China's BYD, Reuters writes. Tesla CEO Elon Musk blamed high interest rates and a mixed economic outlook, but many buyers have been put off by Musk's support for far-right politicians in the EU and his relationship with US President Donald Trump, Yahoo Finance added.

This article was AI-translated and verified by a human editor