The $36,990 Model 3 Standard and $39,990 Model Y Standard include fewer features than their more expensive variants.

Tesla on Tuesday afternoon announced lower-priced versions of its Model 3 and Y vehicles, with both sporting starting price tags below $40,000.

The new $37,990 “standard” version is about 15 per cent cheaper than the previous base offering, and has a driving range that is 10 per cent less than the premium version.