# Tesla is developing an all-new smaller, cheaper electric SUV, four people familiar with the matter told Reuters.

*business · news · 2026-04-10 · Deccan Chronicle*

## Key points

- Tesla is developing a new compact electric SUV distinct from the Model 3 or Y.
- The compact SUV is planned for initial production in Shanghai, with possible expansion to the US and Europe.
- Tesla aims to price the new SUV below the Model 3 by using a smaller battery and single motor.
- The new model may be designed for both driverless operation and traditional human driving controls.
- Tesla has not yet approved production, and the project remains in early development stages.

**Companies:** Tesla
**Countries:** China, United States

[Read the full story on Deccan Chronicle](https://www.deccanchronicle.com/business/tesla-developing-smaller-cheaper-ev-in-push-toward-affordable-market-sources-say-1949753)

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