Tesla is developing a new compact SUV that is smaller than the Model 3.
The vehicle will be significantly cheaper than the company's current entry-level model. Tesla has initiated discussions with suppliers to produce the vehicle at its Shanghai factory.
This move signals a potential reversal of CEO Elon Musk’s decision to prioritize the Robotaxi over an affordable Model 2 project. The new vehicle is expected to cost less than the current $37,000 U.S. starting price of the Model 3.
Tesla intends for the model to compete with budget-friendly EVs from Chinese automakers such as BYD. The project is currently in the early stages of development.