Tesla Reportedly Revives Affordable EV Plans with New Compact SUV

Tesla is reportedly moving forward with an all-new, compact electric SUV designed to be more affordable than any vehicle in its current lineup, according to four sources familiar with the project, claims Reuters.

This new vehicle is reportedly a fresh design rather than a version of the Model 3 or Model Y. Sources say Tesla has been talking to suppliers recently about manufacturing plans and parts for the SUV, which is expected to be about 14 feet long—nearly two feet shorter than a Model Y.

Bridging the Gap Between Drivers and Autonomy

The move marks a potential shift in strategy. In 2024, Elon Musk famously sidelined a $25,000 “Model 2” project to focus on robotaxis. However, a Tesla employee told Reuters the company now wants to build cars that are primarily driverless but still include a steering wheel and pedals for markets where self-driving laws aren’t ready yet.

To keep the price point well below the $37,000 Model 3, Tesla is reportedly focusing on a lighter frame, a single electric motor, and a smaller battery with a shorter range.

The Musk vs. Reuters Factor

While the report is detailed, it should be noted that Elon Musk has a long-standing feud with Reuters. In 2024, when the agency first reported that Tesla was scrapping its affordable car plans, Musk posted on X that “Reuters is lying (again).”

Despite those denials, the $25,000 car never arrived, and Tesla’s focus did indeed shift to the Cybercab robotaxi. Musk has frequently slammed the agency, calling them “legacy news liars” as recently as this year.

As of today, Musk has not publicly commented on this new SUV report. While development is apparently underway in Shanghai, there is no official production date, and Tesla is known for starting projects that end up delayed for years.