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Original report:
https://www.reuters.com/business/au...ew-smaller-cheaper-ev-sources-say-2026-04-09/
Articles / analysis:
https://insideevs.com/news/792521/tesla-affordable-ev-compact-suv-plans/
https://electrek.co/2026/04/09/kia-reveals-new-ev-plans-first-sdv-suv/
Reuters report:
Tesla is developing a new smaller, cheaper EV, sources say
April 9, 2026
The automaker has contacted suppliers in recent weeks to discuss details of the plan for the compact SUV – which would be a new vehicle and not a variant of Tesla’s current Model 3 or Y, the people said. The conversations involved the manufacturing process and specifications for various components, they said.
Three of the people said the compact SUV would be produced in China, and one said Tesla also aims to expand production to the United States and Europe. The car would be 4.28 meters in length, or about 14 feet, two of the sources said. That’s significantly shorter than Tesla’s top-selling Model Y SUV, which is about 15.7 feet long.
The effort follows a decision by Chief Executive Elon Musk to scrap a highly anticipated low-cost EV project in 2024 and pivot the company to focus on robotaxis and humanoid robots. A key question is whether this latest effort to develop a smaller SUV signals a strategy shift back to mass-market human-driven EVs or whether the new model would align more with Tesla’s vision for fully autonomous vehicles.
Such a model could potentially serve both purposes, according to one of the people familiar with the new-vehicle project and a Tesla employee with knowledge of its current product philosophy. The Tesla employee declined to confirm or deny details of any specific vehicle but said, in general, the automaker now aims to build models that would be driverless but offer a human-driven option.
While aiming for full autonomy across its lineup, the person said, Tesla realizes many global markets won’t see meaningful adoption – nor regulatory acceptance – of driverless vehicles for years. Preserving the option to build a particular model with or without driving controls could enable more sales and help ensure Tesla can keep its car factories running near capacity, the person said.
The four people familiar with the project said it remained in an early development stage. Reuters couldn’t determine whether Tesla has given the green light for the car’s production.
The automaker has a history of starting development on products that end up long delayed or canceled. Tesla showed off concept vehicles for a Roadster supercar and a Semi freight truck in 2017, for instance, but still hasn’t produced the sports car or mass-produced the Semi.
Two of the sources said Tesla aims to offer the new vehicle at a substantially lower price than its entry-level Model 3 sedan, which starts at $34,000 in China and about $37,000 in the United States. They said Tesla planned to save costs in part by using a smaller battery, which would mean a shorter driving range compared with 306 to 327 miles for the Model Y.
One of the people added that the automaker would also offer a single electric motor instead of two, a performance option on current Tesla models. Tesla also wants to make the car much lighter, this person said, at about 1.5 metric tons compared with about two tons for the Model Y.
Three of the people said the new model would be produced at Tesla’s Shanghai factory. While the timing remained unclear, the car’s production is unlikely to begin this year, the people said.
https://www.reuters.com/business/au...ew-smaller-cheaper-ev-sources-say-2026-04-09/
Articles / analysis:
https://insideevs.com/news/792521/tesla-affordable-ev-compact-suv-plans/
https://electrek.co/2026/04/09/kia-reveals-new-ev-plans-first-sdv-suv/
Reuters report:
Tesla is developing a new smaller, cheaper EV, sources say
April 9, 2026
- Compact SUV is in early development stage, sources say
- Car would be shorter than Model Y, and would be built in China, sources say
- Tesla didn't respond to Reuters questions about its plans for a new vehicle
The automaker has contacted suppliers in recent weeks to discuss details of the plan for the compact SUV – which would be a new vehicle and not a variant of Tesla’s current Model 3 or Y, the people said. The conversations involved the manufacturing process and specifications for various components, they said.
Three of the people said the compact SUV would be produced in China, and one said Tesla also aims to expand production to the United States and Europe. The car would be 4.28 meters in length, or about 14 feet, two of the sources said. That’s significantly shorter than Tesla’s top-selling Model Y SUV, which is about 15.7 feet long.
The effort follows a decision by Chief Executive Elon Musk to scrap a highly anticipated low-cost EV project in 2024 and pivot the company to focus on robotaxis and humanoid robots. A key question is whether this latest effort to develop a smaller SUV signals a strategy shift back to mass-market human-driven EVs or whether the new model would align more with Tesla’s vision for fully autonomous vehicles.
Such a model could potentially serve both purposes, according to one of the people familiar with the new-vehicle project and a Tesla employee with knowledge of its current product philosophy. The Tesla employee declined to confirm or deny details of any specific vehicle but said, in general, the automaker now aims to build models that would be driverless but offer a human-driven option.
While aiming for full autonomy across its lineup, the person said, Tesla realizes many global markets won’t see meaningful adoption – nor regulatory acceptance – of driverless vehicles for years. Preserving the option to build a particular model with or without driving controls could enable more sales and help ensure Tesla can keep its car factories running near capacity, the person said.
The four people familiar with the project said it remained in an early development stage. Reuters couldn’t determine whether Tesla has given the green light for the car’s production.
The automaker has a history of starting development on products that end up long delayed or canceled. Tesla showed off concept vehicles for a Roadster supercar and a Semi freight truck in 2017, for instance, but still hasn’t produced the sports car or mass-produced the Semi.
Two of the sources said Tesla aims to offer the new vehicle at a substantially lower price than its entry-level Model 3 sedan, which starts at $34,000 in China and about $37,000 in the United States. They said Tesla planned to save costs in part by using a smaller battery, which would mean a shorter driving range compared with 306 to 327 miles for the Model Y.
One of the people added that the automaker would also offer a single electric motor instead of two, a performance option on current Tesla models. Tesla also wants to make the car much lighter, this person said, at about 1.5 metric tons compared with about two tons for the Model Y.
Three of the people said the new model would be produced at Tesla’s Shanghai factory. While the timing remained unclear, the car’s production is unlikely to begin this year, the people said.
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