Honestly, the hype was massive. For weeks, social media was buzzing with teaser clips of spinning wheels and dark, moody headlights. Tesla fans were convinced we were finally getting the "Model 2"—that mythical $25,000 car Elon Musk has been dangling in front of us for years. But when the clock struck on Tesla news October 7 2025, the reality was a bit more grounded, and frankly, Wall Street wasn't exactly throwing a parade.
Instead of a brand-new platform, Tesla dropped "Standard" versions of the Model 3 and Model Y. On paper, it looks like a win for the average buyer. You've now got a Model Y starting at $39,990 and a Model 3 at $36,990. But here's the kicker: this happened literally one week after the federal EV tax credits expired. So, while the "sticker price" went down, the actual out-of-pocket cost for many Americans effectively stayed the same or even went up.
The Model Y Standard: What's actually under the hood?
If you were hoping for a revolution, this wasn't it. It's more of a strategic pivot. The new Model Y Standard is basically a stripped-down version of the bestseller we all know. It features a simpler interior—meaning no rear touchscreen for the kids—and 18-inch "Aperture" wheels that are clearly designed for efficiency over aesthetics.
Most interestingly, these units are ditching the signature glass roof in favor of a traditional solid top.
Why? Cost.
Tesla is trying to fight off a brutal wave of competition from Chinese manufacturers and a resurgent GM. By cutting these premium features, they can hit a lower price point without needing to build an entirely new factory from scratch. It's a smart business move, but for the people waiting for a $25k "Cyber-hatchback," it felt a little like getting socks for Christmas when you asked for a dirt bike.
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Why the market reacted with a shrug (and a 4% dip)
You might think cheaper cars would send the stock to the moon. Nope. On October 7, Tesla shares actually slid nearly 4%, closing around $433.09.
Investors are smart. They looked at the numbers and realized that these "affordable" models are a defensive play, not an offensive one. Tesla’s margins have been getting squeezed for over a year now. If they sell more cheap cars with lower margins, the overall profitability of the company takes a hit.
There's also the "Robotaxi" shadow. With the big "We, Robot" event scheduled for just a few days later on October 10, many big players were likely trimming their positions, moving money around, or just staying cautious. Nobody wanted to be over-leveraged if Elon’s autonomous promises didn't land.
The FSD factor and the October roadmap
While the cars were the headline, the software was the secret sauce. Alongside the hardware reveal, Tesla pushed out a massive Full Self-Driving (FSD) Supervised update.
We’re talking a neural network roughly ten times larger than the previous version.
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- Improved perception: Better at seeing small objects in low light.
- Phantom braking: Supposedly reduced (though we've heard that before).
- Emergency handling: Better logic for when things go sideways on the highway.
Tesla also confirmed they're extending the FSD transfer program into Q4. If you've got a current Tesla with FSD, you can move it to one of these new "Standard" models if you take delivery soon. It’s a clear attempt to juice delivery numbers before the end of the year.
The reality of "The $25,000 Tesla"
We have to talk about the elephant in the room: the cancelled small-car platform. Earlier in the year, reports surfaced that Musk had scrapped the dedicated $25k car to focus entirely on the Robotaxi.
The Tesla news October 7 2025 confirms that strategy.
By making the Model 3 and Y "cheaper" through part reduction rather than a new chassis, Tesla is betting that software and scale will win. They aren't trying to build the cheapest car anymore; they're trying to build the most profitable autonomous fleet.
What you should do next
If you're in the market for an EV, the landscape just changed significantly. The new price points are tempting, but there are a few things you should consider before hitting that "Order" button on the app.
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First, check your local state incentives. Since the federal $7,500 credit is gone (as of late September 2025), you need to see if your state is picking up the slack. In places like Colorado or California, you might still find enough rebates to make the Model 3 Standard a sub-$30k car.
Second, think about the hardware. These new "Standard" models are great, but if you're a tech nerd, you're losing the rear screen and the glass roof. If those things matter to you, look at the used market for 2024 "Long Range" models. You might find a better deal on a car with more features.
Lastly, keep an eye on the FSD subscription model. Word is that Tesla is moving away from the $8,000 upfront purchase entirely by early 2026. If you want to "own" the software forever, these October deals might be your last chance to bake that cost into your financing.
Actionable Steps:
- Calculate the Total Cost: Don't just look at the $36,990. Add in the destination fee and subtract any remaining local state credits.
- Test Drive the "Standard": Go to a showroom and sit in the new interior. See if the lack of a glass roof makes it feel too cramped for your taste.
- Audit Your Commute: The Standard models have shorter range. If you live in a cold climate or have a 60-mile commute, the savings might not be worth the extra charging stops.
Tesla is clearly in a transition phase. They're moving from a high-growth car company to an AI and robotics firm. Today’s news was a bridge to that future—a way to keep the cash flowing while they try to solve the autonomy puzzle.