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

*business · news · 2026-04-09 · CNBC*

## Key points

- Tesla is developing a new compact electric SUV distinct from the Model 3 or Y.
- The new SUV is planned to be 4.28 meters long, significantly shorter than the Model Y.
- Production is expected to start in Shanghai, with possible expansion to the US and Europe.
- Tesla aims to price the SUV below the Model 3 by using a smaller battery and single motor.
- This project marks a shift from Tesla's recent focus on robotaxis back toward mass-market EVs.

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

[Read the full story on CNBC](https://www.cnbc.com/2026/04/09/tesla-is-developing-a-new-smaller-cheaper-ev.html)

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