Tesla Working on Affordable Electric SUV: Tesla is reportedly developing a new, compact and affordable electric SUV to strengthen its position in the global EV market. According to a Reuters report, the company is planning this move as competition from Chinese automakers like BYD continues to grow rapidly.
Tesla has long dominated the electric vehicle segment, but its market share has declined in recent years due to the rise of budget-friendly EVs, especially from China.
New Compact SUV Under Development
Sources close to the development revealed that this upcoming SUV will be an all-new model, different from the Tesla Model 3 and Tesla Model Y.
The company has already started discussions with suppliers regarding:
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Manufacturing processes
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Component specifications
The SUV is expected to be manufactured in China initially, with plans to expand production to the US and Europe later.
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Estimated Length: 4.28 meters
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Positioning: Smaller than Model Y
Expected Pricing and Range
The upcoming EV is expected to be priced significantly lower than the entry-level Tesla Model 3.
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Model 3 Price:
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$34,000 (China)
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$37,000 (USA)
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This indicates that the new SUV could target a much more affordable segment.
However, to maintain lower costs:
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The range will likely be less than Model Y’s 526 km (327 miles)
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The vehicle is expected to be lighter
Tesla Facing Sales Pressure
Industry experts suggest that Tesla is currently facing declining EV sales for the third consecutive year. This comes as the company shifts focus toward:
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Autonomous driving technology
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Robotaxi services
Tesla has already deployed a limited number of robotaxis in Austin, Texas, many of which still include human safety monitors.
Strategy Shift After Project Cancellations
The move toward an affordable EV comes as a surprise because Elon Musk had previously canceled a low-cost EV project in 2024, often referred to as the “Model 2.”
Earlier, Tesla had ambitious plans to sell 20 million vehicles annually by the end of the decade—nearly double that of Toyota.
The company also has a history of delaying or canceling projects, including:
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Tesla Roadster (announced in 2017)
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Tesla Semi truck (yet to see full-scale production)
Model S and Model X Production Stopped
In another major development, Tesla has officially stopped production of its flagship models:
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Tesla Model S
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Tesla Model X
Only limited pre-configured units remain in global inventory, mostly in the US. Customers can no longer place custom orders for these models.
