Tesla Developing New Compact SUV, to Be Made in China and Priced Below Model 3

Tesla is developing a new compact electric SUV, which will be produced at its Shanghai factory in China. The vehicle will measure approximately 4.28 meters in length—significantly shorter than the Model Y—and represents an entirely new design rather than a redesign of the Model 3 or Model Y. To reduce costs, the new model will feature a smaller battery pack, resulting in a driving range lower than the Model Y’s 306 to 327 miles. Its target price will be substantially below that of the current entry-level Model 3 sedan, which starts at $34,000 in China and around $37,000 in the U.S. Tesla has recently communicated with suppliers about this vehicle program, though the start of mass production has not yet been confirmed and is not expected to begin within this year. Earlier in 2024, CEO Elon Musk had canceled plans for a low-cost electric vehicle to focus on fully autonomous cars, but the company has since adjusted its strategy, retaining vehicles equipped with driver controls to align with market demands and regulatory realities while maintaining factory utilization rates.