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| The cheapest Tesla Model 3 so far. |
In a bold move to reignite sales momentum, Tesla appears to be pivoting toward a new, aggressive budget-vehicle strategy. The catalyst? A stripped-down, base Model 3 variant launched in South Korea, which, after local subsidies, achieves a price point long associated with the mythical, sub-$30,000 "Model 2" that never came to be.
This isn't the promised dedicated budget car, but it might be its spiritual successor. By making significant compromises on range and interior features, Tesla has engineered what is currently the world's most affordable Tesla, signaling a direct play for the mass market amidst intensifying global competition.
The "Model 2" Price, But Not the Car
The newly launched 2026 Model 3 Standard in Korea carries a sticker price of 42 million won (approximately $29,000). However, available government electric vehicle (EV) incentives slash that figure to an effective $25,800, finally hitting the elusive price band that fans and analysts have speculated about for years.
This pricing is notably lower than in Tesla's key market of China, where the Model 3 Standard starts around $33,770. Intriguingly, the Korean-spec vehicle is also manufactured at Tesla's Shanghai Gigafactory and exported, highlighting a market-specific pricing and specification strategy.
Explore the configuration for the Korean-market Model 3 on Tesla's official website.
How Tesla Reached This Price: The Specs Tell the Story
A close look at the specifications reveals the engineering and feature trade-offs required to hit this landmark price.
- Reduced Range: The most significant compromise comes in range. While the European Model 3 Standard boasts 534 km (WLTP), the Korean version is equipped with a much smaller battery pack, offering only 382 km on the same WLTP cycle. This aligns almost perfectly with the rumored 250-mile (402 km) range target for the once-anticipated Model 2.
- Spartan Interior: The cost-cutting continues inside the cabin. The model comes standard with black cloth seats and a single design of 18-inch wheels. Features like front seat ventilation and rear seat heating have been removed. Even adjustments are manual—both the seats and steering wheel are adjusted with physical levers.
- Infotainment Stripped: In a surprising move, Tesla has omitted basic audio features like a radio from the standard infotainment system. This level of de-contenting raises questions about the value proposition compared to the next available trim level.
A Strategic Move in a Competitive Landscape
The creation of this ultra-budget Model 3 is likely a strategic chess move. By offering a vehicle at this price point, Tesla can now compete more directly with the wave of affordable and capable EVs from Chinese manufacturers like BYD, Li Auto, and Xiaomi, particularly in Asian and European markets.
Given that the vehicle is produced in Shanghai, it is highly probable that Tesla will introduce a similar—or even more aggressively priced—variant in China itself to defend its market share.
All eyes are now on Tesla's upcoming earnings call scheduled for Wednesday, January 28. Investors and industry watchers will be keen to hear from CEO Elon Musk about whether this marks the beginning of a sustained budget-focused pricing strategy across its lineup.
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Disclaimer: Pricing and specifications are based on the South Korean market launch and are subject to change. Local subsidies vary by region and eligibility.