Tesla is reportedly in the works of developing a brand new, compact electric SUV that is set to be more budget-friendly than any of its current lineup of vehicles. According to sources familiar with the project, Tesla is taking a different approach with this new SUV, opting for a unique design rather than simply a smaller version of the Model 3 or Model Y.
The new SUV is said to be approximately 14 feet in length, making it nearly two feet shorter than the Model Y. This move signifies a potential shift in Tesla’s strategy, especially considering Elon Musk’s previous decision to put a halt on a $25,000 “Model 2” project in favor of focusing on robotaxis back in 2024. However, sources now reveal that Tesla aims to create cars that are primarily autonomous but still equipped with a steering wheel and pedals for regions where self-driving regulations are not yet in place.
To ensure that the price of this new SUV remains well below the $37,000 Model 3, Tesla is reportedly concentrating on utilizing a lighter frame, a single electric motor, and a smaller battery with a reduced range. This strategic approach is aimed at making electric vehicles more accessible to a wider audience and bridging the gap between drivers and autonomy.
It is worth noting that there has been a history of tension between Elon Musk and Reuters, the agency that first reported on Tesla scrapping its plans for an affordable car back in 2024. Musk has publicly criticized Reuters on multiple occasions, referring to them as “legacy news liars.” Despite this, there has been no official comment from Musk regarding this latest report on the new compact electric SUV.
While development is said to be underway in Shanghai, an official production date has not been announced. Tesla has a track record of starting projects that often face delays, so it remains to be seen when this new SUV will hit the market. As the automotive industry continues to shift towards electric vehicles, this new compact SUV from Tesla could potentially play a significant role in making sustainable transportation more accessible to a broader range of consumers.