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

*business · news · 2026-04-09 · New York Post*

## Key points

- Tesla is developing a smaller, cheaper electric SUV, currently in early development stages.
- The new SUV is planned for production in Shanghai, with possible expansion to the US and Europe.
- Tesla aims to price the SUV below the Model 3, using a smaller battery and single motor.
- This project follows the cancellation of the $25,000 Model 2 and may signal a strategy shift.
- Tesla intends to design future models for both driverless and human-driven operation to suit global markets.

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

[Read the full story on New York Post](https://nypost.com/2026/04/09/business/tesla-secretly-working-on-new-smaller-cheaper-electric-suv-report/)

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