Welcome back to Critical Materials<\/a><\/strong>, the one-stop shop for the biggest stories in the EV world. Today, I\u2019m focusing on the post-mortem after Tesla\u2019s launch of its so-called reasonably priced entry-level electric cars. No matter whether you\u2019re a Tesla Superfan, a media pundit, a big-name investor, or just someone who passively keeps tabs on the EV industry, no one seems to be impressed by Tesla\u2019s new models.<\/p>\n Let\u2019s hop to it, folks.<\/p>\n 30%: The Stock Price Didn\u2019t Do A Damn Thing<\/p>\n Photo by: Tesla<\/p>\n For a while there, it seemed like Tesla\u2019s stock price could do no wrong. Whether it\u2019s the less-than-stellar sales of the Cybertruck or Musk\u2019s several attempts at reclaiming his title of the World\u2019s Richest Man via some of the largest corporate pay package deals<\/a> and stock transfers in human history, the price of $TSLA has not faltered.<\/p>\n Yet Tesla\u2019s facing a real sales slump, especially in Europe, where Chinese EV manufacturers like BYD<\/a> have started to make real inroads to steal customers away from their Model 3s. Whatever Tesla was set to announce, it was assumed to be good for a quick stock bump.<\/p>\n Not this time. Tesla stock closed down yesterday by about 4%. This morning, the stock only rose slightly, so at best, the announcement was a wash when it comes to stock price. Why?\u00a0According to Barrons<\/a> and noted Tesla bull Dan Ives from Wedbush, the Model Y and Model 3 just don\u2019t go far enough. Here’s Ives:<\/p>\n “The much-anticipated lower cost models, which started production in North America in June 2025, are expected to hit the market in FY4Q25 with an increased focus on reducing complexities with its manufacturing supply chain before launch to ensure a smooth rollout despite being slower than initial expectations but this price point is still relatively high versus other vehicles on the market.\u201d<\/p>\n<\/blockquote>\n And it\u2019s true. At one point in time, the Model 3 and Model Y were kind of unbeatable deals on paper when it came to range and charging for the price. When these cars launched, not much could touch them, which is part of the reason why the brand has had such a chokehold on the EV market.<\/p>\n Today, it\u2019s not hard to find a 300-mile range EV that matches the Model Y or Model 3\u2019s specifications on paper, for cheaper even. The Chevrolet Equinox EV <\/a>and Hyundai Ioniq 5<\/a> are just two examples. More are coming.\u00a0<\/p>\n Most importantly for Tesla\u2019s stock price, though, is that investors may not be convinced that the cheap Model Y and Model 3 are cheap enough to get as many customers in the door. Consumers are squeezed, and there\u2019s a real need for truly cheap cars. The brand cancelling its $25,000 entry-level car won\u2019t help it get back to its 500,000 unit quarterly goal, Ives said.<\/p>\n I think it’s silly to think that the Model 3 and Model Y Standard won\u2019t bring in some new customers, but I think this is a clear sign that Tesla\u2019s stock price really isn\u2019t based on its car lineup anymore. I\u2019m not sure if it ever will be again if Tesla doesn\u2019t figure out how to make a new model.\u00a0<\/p>\n 60%: So Tesla isn\u2019t A Car Company?<\/p>\n Photo by: Tesla<\/p>\n If you\u2019ve been paying any attention to the rising cost of living, you\u2019re probably familiar with the term \u201cShrinkflation<\/a>\u201d.\u00a0 It’s when a brand repackages the same product you\u2019ve come to know and love, but with alterations to the size or content to make it cheaper to make, without it necessarily being cheaper to buy. Same (or bigger) price, worse product.<\/p>\n Well, just like a family-sized box of your favorite cereal getting more than a little bit narrower this week compared to last, the Model Y Standard seems to be a good example of the phenomenon. Yahoo Finance<\/a> thinks the Model Y isn\u2019t a great idea, especially in the face of what they think is an assured plan to introduce a fleet of self-driving cars and go all-in on AI:<\/p>\n Sure, there is a business case to offer products 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.\u201d<\/p>\n But it looks odd, or perhaps even ominous, to tweak what will soon be outdated technology and product lines when you are also heralding a world-changing event. My “Tesla is not a car company” T-shirt has people asking a lot of questions already answered by my shirt.<\/p>\n<\/blockquote>\n The author compared the introduction of the Tesla Standard trim models to a big tech company introducing a VCR when everyone\u2019s making a streaming service.<\/p>\n Although the jury is out on whether or not Tesla\u2019s AI efforts or if AI as a whole are as viable or will ever be solvent, the low-effort, slightly cynical new Tesla models only further convince me that Tesla no longer considers itself a car company. But the slow and kind of sloppy introduction of the not-so-cheap new models does give us pause if Tesla and Elon Musk can actually hit their goals with AI.<\/p>\n I mean, it certainly wouldn\u2019t be the first time either party has reneged on a promise.\u00a0<\/a><\/p>\n 90%: Not Enough For Europe, Either<\/p>\n Photo by: BYD<\/p>\n The U.S. EV market has had one big goal since its inception: affordability.<\/a> Charging infrastructure and concerns about the product may also ring in consumers\u2019 minds, but arguably, it\u2019s all secondary when it comes time to pay for the car. And the price of EVs here has gone down over time.<\/p>\n But Europeans have far more affordable electric choices right now. Blame the market\u2019s openness to cars from China, the efforts of companies like Renault and Volkswagen to keep up, as well as a general preference toward smaller and cheaper models.<\/p>\n![\"2026](\"https:\/\/www.europesays.com\/us\/wp-content\/uploads\/2025\/07\/16x9-tr.png\")
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