Tesla may be working on a smaller and cheaper electric SUV
Tesla could change strategy again. Reuters reported that the company is working on a smaller, cheaper electric SUV. It would be an all-new vehicle rather than a variant of the existing Model 3 or Model Y, according to the publication’s sources. The new electric vehicle would be about 14 feet long, shorter than the Model Y at 15.7 feet. Reuters did not specify whether it would be an autonomous or traditional vehicle, but a source reportedly said that Tesla was generally looking to offer a driverless option in its vehicle lineup.
The company was previously working on a budget-friendly electric vehicle with a target price of $25,000, but Tesla appeared to abandon that effort in 2024 to work on robotaxis. And as recently as early 2026, Tesla discontinued two of its EV models in order to refocus its business on robotics. Perhaps the brand felt it needed to have a larger automotive footprint after killing the S and X models and relaunching the budget EV project. Or maybe this is just one last whim of the company’s management and one that won’t actually come true. We’ll have to wait and see.
