Tesla stock moved slightly higher in premarket trade following a report that the company is working on a new, compact electric sport-utility vehicle aimed at a lower price point than its current models. The car is described as an all-new design rather than a derivative of the Model 3 or Model Y, and would be notably smaller than Tesla's current crossover offering.
According to the report, Tesla has been in recent contact with suppliers to discuss manufacturing methods and component specifications for the proposed vehicle. The discussions suggest the company is exploring process decisions that would support production of a distinct compact SUV, rather than adapting an existing platform.
Sources identified in the report said the car is expected to be assembled initially at Tesla's Shanghai factory. One of those sources added that the company aims to expand production at a later stage to include facilities in the U.S. and Europe. The proposed vehicle's length is cited at roughly 4.28 meters, which is considerably shorter than the Model Y's approximate 4.79 meters.
Price guidance in the report indicates the new SUV would be offered well below the entry-level Model 3, which starts at about $37,000 in the U.S. Cost reductions would be achieved in part through a smaller battery pack, the use of a single electric motor rather than dual-motor configurations, and by reducing overall vehicle mass. The new model's target weight is reported near 1.5 metric tons compared with about two tons for the Model Y.
Those involved with the reporting emphasized that the project is in early development. Production is not expected to commence this year, and it remains uncertain whether Tesla's internal approval for full production has been granted. The company previously canceled a separate anticipated low-cost EV project in 2024 as it shifted focus toward robotaxi and humanoid robot initiatives led by its chief executive.
The report prompted a modest market reaction, with Tesla shares edging upward ahead of the opening bell. Beyond the immediate stock response, the potential program touches several parts of the automotive and supply chain ecosystem - from battery suppliers and electric motor manufacturers to assembly operations in China and possible expansion into U.S. and European plants.
Note: The information above reflects details reported about the development and potential production plans for a new compact Tesla SUV. Timelines and approvals were described as uncertain in the reporting.