Tesla Eyes Cheaper EV Market with Smaller SUV

Tesla is reportedly developing a new, smaller electric SUV, according to sources cited by Reuters. This upcoming vehicle would be a distinct model, not a variant of the existing Model 3 or Model Y, and would measure approximately 14 feet in length, making it shorter than the current Model Y. The company has previously explored a budget-friendly EV, aiming for a $25,000 price point, but this effort was reportedly abandoned in early 2024 to concentrate on robotaxis. In a move to refocus on robotics, Tesla also discontinued two EV models at the start of 2026. This new project could indicate a renewed focus on expanding its automotive offerings, though its realization remains uncertain.