Tesla appears to have backflipped on its plans to scrap a smaller, more affordable model with human controls, a new report suggests.
Electric Cars
On-again, off-again plans for a smaller Tesla electric car to rival BYD and Kia are back on the cards, a new report has claimed.
News agency Reuters cites Tesla insiders as claiming work is underway on a smaller and cheaper electric SUV measuring 4.28 metres long, placing it in the same category as the Kia EV3, BYD Atto 2 and Jaecoo J5.
Work is at an "early development stage," Reuters reports, but it is said to be its own model rather than a variant of the Model 3 or Model Y, using a single electric motor and weighing 1500kg, about 400kg to 500kg less than the current Model Y.
Sources cited by Reuters claim the new small Tesla would be sold at a "significantly lower" price than today's Model 3 sedan, which is priced from $54,900 plus on-road costs in Australia.
To save cost, the battery would be smaller, for a shorter all-electric driving range than the 513km currently claimed for the base Model 3.
Tesla's new compact SUV is likely to be produced in China, Reuters claims, with talks to expand production to the US and Europe.
The Reuters report is the latest in years of rumours claiming Tesla has considered – and partially developed – a smaller and more affordable electric vehicle than its current offerings.
Plans for a version of the Cybercab autonomous taxi with a steering wheel and pedals were reportedly underway until chief executive officer Elon Musk scrapped them in early 2024 to focus on the driverless version.
There is a chance the small SUV may be offered only as an autonomous vehicle, but the report claims Tesla "now aims to build models that would be driverless but offer a human-driven option," citing sources.
Those close to the project also told Reuters that the smaller affordable EV is in its early development stage, but has not yet been confirmed by the brand or given a timeline.
Release timing for Tesla's smaller and more affordable EV is unknown – if the report is accurate – but it may not surface until 2027 or 2028, given the stage of development.
In the meantime, Tesla has focused its attention on entry-level, stripped-back Standard versions of the Model 3 and Model Y, which are yet to be confirmed for Australia.
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