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

*business · news · 2026-04-10 · Firstpost*

## 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 and produced initially in Shanghai.
- Tesla aims to price the SUV below the Model 3 by 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 has not yet approved production, and the vehicle remains in early development stages.

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

[Read the full story on Firstpost](https://www.firstpost.com/auto/tesla-is-developing-a-new-smaller-cheaper-ev-sources-say-13998774.html)

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