It was September 2020 when Elon Musk announced that the company was developing a global EV more affordable than the Model 3. By October 2024, the company had pivoted away from this project, focusing on highly autonomous vehicles starting with the Cybercab, and new variants of the Model 3 and Model Y.
As per a new Reuters report published on April 9, 2026, Tesla is reconsidering the purported ‘Tesla Model Q’ to open the brand up to a wider customer base.
Neither ‘Model Q’ nor ‘Model 2’ is an official name; both are internet-given titles. Here’s everything we know and anticipate about Tesla’s future entry-level model.
Smaller than a Model Y
Reuters said the new crossover SUV would be about 4.28 meters (168.5 in.) long, which would make it notably shorter than the Model Y. The report also said Tesla wants the SUV to weigh about 1.5 metric tons (3,307 lbs). For comparison, the entry-level Model Y is 188.7 inches long, and weighs up to 4,246 lbs.
To cut costs, the company is expected to use a smaller battery pack, which would likely result in less range than the Model Y, and a single electric motor.
Shanghai-first production plan
Three of Reuters’ sources said Tesla plans to manufacture the compact SUV in China, with Gigafactory Shanghai expected to handle initial production.
One source added that Tesla also aims to expand production to the U.S. and Europe later, though the report doesn’t mention whether it would be Austin or Fremont that would tool up in America. Reuters said the timing remains unclear, so start of production could be a couple of years out.
Spacious & Quality-conscious
During an interview on the Ride The Lightning podcast, published March 5, 2025, Franz von Holzhausen, the design chief of Tesla, spoke about the intention and design philosophy of the Model 3 Standard and Model Y Standard variants, and the complete Tesla lineup.
“We deliver a better value than what you’re paying for, more space, et cetera. I think that will always be something that we pay attention to here,” he said.
“And so we’re always looking to design a way around ideas that can make the products feel more premium, I guess, is a good way to talk about it, than the price point that you pay for it,” the chief designer added.
LFP Battery
In April 2023, in a strategy document titled ‘Master Plan 3,’ Tesla indicated that it will use LFP batteries offering an energy storage capacity of 53 kWh in its future compact EV.
LFP batteries typically have lower energy density than NMC batteries, so they are bulkier and deliver a shorter range. While Tesla offers them as an option in the Model 3 and Model Y, it could use them across the variant lineup in the future model to ensure maximum affordability and set a clear differentiation from the midsize models.
Human-driven and autonomy-ready
One of the more notable details in the Reuters report is Tesla’s reported autonomy strategy for future vehicles.
Reuters said Tesla now aims to develop models that could support a driverless configuration while also offering a human-driven version. That approach would allow Tesla to sell the same basic vehicle in global markets where fully autonomous driving is still years away from meaningful regulatory approval or wide customer acceptance.
Bi-directional charging & 48V system
The upcoming model could be the perfect fit for vehicle-to-load (V2L) and vehicle-to-vehicle (V2V) capability. Moreover, the company is expected to use a 48-volt auxiliary battery instead of the typical 12-volt unit in this EV. The more advanced setup should lead to reduced wiring complexity, weight, and energy consumption.
Before you dismiss these as wild speculation, note that Tesla has confirmed that these features are earmarked for future vehicles in its Q4 and FY 2024 updates (pdf), and is offering the Model Y L with the former.
Price target
Reuters said Tesla wants to price the new SUV substantially below the Model 3, which starts at USD 36,990 in the U.S. A starting price of around USD 30,000 with usable range, features, and specs would give Tesla a breakout product in the U.S. and other markets.
Based on what Reuters reported on April 9, 2026, Tesla’s affordable EV now appears to be an early-stage compact SUV program centered on entry-level pricing, lower weight, Shanghai-first production, and a product strategy that could work in both conventional and future autonomous use cases.
Also Read: Future Tesla cars: Launches expected between 2026 & 2028
Featured Image: Our exclusive rendering shows how a Model Y-inspired compact EV would look.
International Automotive News Editor since 2014, covering global motor shows, industry events, and test-driving various vehicles, with a focus on hybrid and electric cars in recent years.
