Tesla reportedly developing new smaller, cheaper EV after killing Model 2

7 hours ago

Tesla is developing a compact, affordable electric SUV, priced below the Model 3, with production planned in Shanghai and potential expansion to the US and Europe.
The vehicle will feature a smaller battery and single motor to reduce costs, resulting in less range than the Model Y, and is described as an entirely new model, not a variant of existing ones.
This marks a reversal from CEO Elon Musk's 2024 decision to cancel the $25,000 EV program in favor of Robotaxis, despite internal warnings about Robotaxi profitability.
Tesla's sales have declined since 2023, with Q1 2026 deliveries missing expectations, while competitors like BYD advance in the affordable EV market.
The Robotaxi service in Austin has limited deployment and safety incidents, indicating delays in achieving full autonomy, leading to a renewed focus on human-driven vehicles.

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