Tesla Developing a New Low-Cost Crossover: First Details Emerge

Tesla is working on an all-new compact and affordable electric crossover, according to a report from Reuters citing four sources familiar with the matter.

People briefed on the discussions say Tesla recently contacted suppliers to talk through early details of the project. According to those sources, the vehicle will be an entirely new model rather than a variation of the existing Tesla Model 3 or Model Y.

The insiders also said the upcoming crossover is expected to be built in China. At the same time, one source noted that Tesla is looking to expand production capacity in both the United States and Europe.

The new model is expected to measure about 168.5 inches in length. For comparison, the Tesla Model Y—the brand’s current smallest crossover—comes in at roughly 187 inches long.

Reuters also noted that back in 2024 Tesla CEO Elon Musk said the company would increasingly focus on autonomous robotaxis and humanoid robots. One source told the outlet the new crossover could potentially be offered either as a fully autonomous vehicle or in a conventional driver-controlled version.

Sources also said the upcoming model should cost significantly less than the Tesla Model 3, which starts at about $34,000 in the U.S. Tesla is reportedly exploring ways to cut costs, including using a smaller battery pack, which would likely result in a shorter driving range.

Another person familiar with the plans added that the crossover will probably use a single electric motor and be lighter than Tesla’s current models. The vehicle’s curb weight could come in at around 3,300 pounds. However, sources caution that production is unlikely to begin as soon as 2026.