Tesla is reportedly sketching a new, smaller electric SUV that would sit below the Model Y in size and price. Sources told Reuters the vehicle would measure roughly 14 feet long, a full foot shorter than the 15.7‑foot Model Y, and would be built from the ground up rather than as a Model 3 or Model Y variant. No official specs have been released yet.

Earlier this year Tesla shelved a budget EV project that aimed for a $25,000 price tag, pivoting instead toward its robotaxi ambitions. By early 2026 the company also discontinued the Model S and Model X to concentrate resources on autonomous hardware. Reviving a low‑cost SUV could restore a broader consumer foothold after those cutbacks.

If the SUV reaches production, it would give Tesla a compact offering to compete with emerging Chinese entrants that already price sub‑$30,000 crossovers aggressively. Consumers craving a Tesla badge but balking at current pricing may finally see an entry point, while investors watch how the move balances the firm’s dual focus on vehicles and robotics. The concept remains unconfirmed, but development appears active.