World's cheapest Tesla launches at $29,000 and comes with plenty of compromise

Tesla is seemingly embarking on a new budget vehicle pricing strategy to liven up its flagging vehicle sales. It has introduced a unique base Model 3, the world's cheapest, which costs the equivalent of $25,800 after available subsidies.

The new Model 3 Standard, however, comes with plenty of specs and design compormises that have allowed Tesla to reach a price point previously reserved for the elusive sub-$30,000 Model 2 that never was.

Cheapest Tesla is not a Model 2

The 2026 Model 3 Standard that just launched in Korea is priced at 42 million won, or about $29,000. What's more, government EV subsidies slash the already record low Model 3 tag further to arrive at what is basically the rumored mass market Tesla Model 2 vehicle price point and range.

This is the world's cheapest Tesla vehicle as even in China the Model 3 Standard starts from the equivalent of $33,770, despite that the new Model 3 that launched in South Korea is also made in the Shanghai Gigafactory, then exported.

Range

One look at the vehicle's specs, however, tells a lot about how Tesla arrived at this enticing price tag. The Korean Model 3 Standard comes with a much smaller battery, for instance. Instead of the 534 km of range that the cheapest Model 3 Standard commands in Europe, the $29,000 Korean version musters only 382 km of range on the same WLTP cycle. Since the rest of the specs like the 6.2 seconds 0-62 mph acceleration stay the same, this indicates that Tesla has developed a brand new budget Model 3, at least for the Asian market. The affordable Tesla Model 2 was said to come with a 54 kWh battery pack and offer 250 miles of range and the new base Model 3 fits those specs to a tee.

Interior

Besides the smaller battery, the new Model 3 sports other compromises. It, for instance, comes only with black cloth seats and one set of 18" wheels. There is no front seat ventilation or rear seat heating, too, while the seats and steering wheel can only be adjusted manually with levers. Even basic infotainment system features like a radio have been nixed, putting the price difference with the next available trim in question.

Given that the car is made in Shanghai, Tesla will probably introduce its cheapest vehicle so far in China as well, but at an even lower price to stave off the onslaught of affordable Chinese EVs by brands like BYD and others. Tesla is due to report earnings on Wednesday, January 28, after market close, and Elon Musk might spill some beans about this new budget Tesla pricing strategy then.

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