Tesla just launched a cheaper version of the Model Y crossover and added a new 7-seat option

• Tesla quietly launched a new, cheaper version of the Model Y that costs $41,990.
• The Standard Range model gets an EPA-estimated range of 244 miles and comes with rear-wheel drive.
• The automaker also added a 7-seat option for the Model Y, which comes at a $3,000 premium.

Tesla's planned $25,000 electric vehicle is still years away, but in the meantime, its Model Y crossover just got a whole lot more affordable.

The EV maker quietly launched a new entry-level Standard Range version of the Model Y with a starting price of $41,990, down $8,000 from the Long Range model, which used to be the lowest-priced option. The car costs only $4,000 more than Tesla's least expensive offering, the Standard Range Plus Model 3.

The new Model Y option has a lower EPA-estimated range of 244 miles, compared to the Long Range version's 326-mile rating. It also comes with rear-wheel drive, instead of the all-wheel-drive setup that is found on the Long Range version and the $59,990 Performance model.

Model Y buyers can also now opt for a 7-seat version, which costs an additional $3,000 and adds a third row with two seats. Both the second and third rows fold flat to maximize cargo space, Tesla says.

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Tesla said a $39,000 Standard Range Model Y would arrive in 2021 when it announced the new model back in 2019. But the company's CEO, Elon Musk, walked back those plans last July, telling a Twitter user that a driving range less than 250 miles would be "unacceptably low."

The new Model Y will compete with the entry-level Ford Mustang Mach-E, which offers an EPA-rated 230-mile range at a starting MSRP of $35,395 after the $7,500 federal tax credit. The price drop also comes as low-priced EVs like the Nissan Ariya and Volkswagen ID.4 are set to hit the US market.