Tesla engineers are working on an entry-level SUV that will sit below the Model Y and be priced significantly lower, according to a Reuters report citing four people familiar with the matter. In fact, this EV will even undercut the Model 3 sedan, Tesla’s current most accessible offering, it added. The Model 3 starts at USD 37,000 (approximately Rs 34.31 lakh) in the US. The carmaker has reportedly reached out to suppliers in recent weeks to discuss details regarding its plans for the SUV, which won’t be another variant of the Model Y but an all-new model.
- At about 4.3 metres long, it’ll slot in the midsize SUV space
- Smaller battery than Model Y and single-motor setup to keep costs lower
- Driving range will be lower than the Model Y
- Debut timeline is unclear right now
New Tesla EV details
The SUV would measure around 4.3 metres in length, making it a midsize SUV. For reference, the Model Y’s length ranges from 4,790mm to 4,976mm, depending on the wheelbase version. The upcoming model will be produced at Tesla’s Shanghai factory in China, with production later expanding to the US and Europe, the report added. The people cited earlier also said the EV manufacturer plans to rein in costs in part by using a smaller battery, which could mean a shorter driving range than the Model Y.
One of the people told Reuters that the automaker would offer a single electric motor instead of two. Tesla also wants to make the car much lighter, at about 1.5 tonnes or 1,500kg. The global debut timeline is unclear, and the car’s production is unlikely to begin this year.
Model S and Model X discontinued
Interestingly, this report comes shortly after Tesla pulled the plug on the Model S sedan and Model X SUV, two of its longest-running models, as it shifts focus towards large-scale production of humanoid robots. Tesla is currently preparing to begin production of its two-door Cybercab robotaxi, first shown in 2024, which has no steering wheel or pedals. However, a debut timeline remains unclear.
Low-cost Model 2 scrapped earlier
The report highlighted that Tesla’s track record with low-cost vehicles has been inconsistent. After launching as a luxury automaker in 2008, Tesla made it clear that its long-term goal was to build affordable electric cars for the mass market. Beginning in 2020, CEO Elon Musk even spoke of selling 20 million vehicles annually by the end of the decade, and a USD 25,000 Model 2 was expected to contribute significantly to that growth. But in 2024, Musk scrapped it to focus on robotaxis, later even calling a USD 25,000 human-driven EV “pointless” and “silly”.
A former Tesla manager noted that until recently, the company had moved away from developing an all-new traditional EV and was instead focusing on robotaxis as a way to reduce costs.
Strategy shift
As of now, it’s unclear whether this signals a return to human-driven EVs or if the new model will align with the brand’s push towards autonomy. According to sources familiar with the project, Tesla is now looking to develop vehicles that can operate autonomously but still offer the option of human driving. While Tesla continues to aim for fully driverless cars, many global markets have not seen widespread adoption of such technology. Offering both options could enable more sales and keep production volumes high.
When Tesla eventually introduced more affordable models, they turned out to be pared-down versions of the Model 3 and Model Y rather than entirely new cars. Priced at USD 37,000 (Model 3 Standard) and USD 40,000 (Model Y Standard) in the US, they were still seen as too expensive to bring in a new set of buyers and haven’t significantly boosted overall sales.
Tesla scaling up Supercharger network in India
In India, the Model Y remains Tesla’s only offering, priced at Rs 58.89 lakh for the rear-wheel-drive version and Rs 67.89 lakh for the long-range variant (both ex-showroom). The groundwork is already being laid on the infrastructure front, with the company steadily building its Supercharger network. Its fifth station recently came up in Navi Mumbai, taking the total to 20 Superchargers across the country. More installations are expected, especially along busy routes connecting major cities such as Bengaluru, Chennai and Chandigarh.
Suraj Viswanathan
Dhruv Dhaka
Viraaj Bhatnagar
Glenn Noronha
