Key Takeaways
- Tesla has started designing a smaller, lower-cost SUV after discontinuing its Model X and S earlier this year, Reuters reported Thursday.
- The plans could mark a strategy shift for Tesla, which shelved earlier plans for a more affordable model to prioritize autonomous projects like the Cybercab robotaxi and Optimus humanoid robots.
Tesla could be on its way to reviving plans for a more affordable vehicle.
The electric vehicle maker is in the process of designing a new compact, lower-cost SUV model, distinct from the Tesla (TSLA) Model 3 or Y, Reuters reported Thursday.
A number of options are being considered to bring down the vehicle’s cost, from a smaller battery to a single motor or a smaller, lighter design, people familiar with the matter told Reuters. The new model could also be designed to be driverless-first, with an option for human driving, the report said, advancing Tesla’s focus on autonomous vehicles.
Tesla did not respond to an Investopedia request for comment in time for publication.
Why This Matters to Investors
A new, more affordable model could signal a shift in plans for Tesla, which recently discontinued production of its Model S and X vehicles and scrapped plans for a lower-cost EV project in 2024 to focus on its developments in autonomous vehicles.
The new model discussions come just months after Tesla announced plans to shut down production of its Model S and X vehicles as part of a pivot to focusing production on the Cybercab and humanoid Optimus robots. On Wednesday, CEO Elon Musk said on social media that there are “Only a few hundred Tesla Model S & X cars left in inventory.”
Musk and other executives could offer more insights on Tesla’s strategy when the company reports its latest earnings after the market closes on April 22. The EV maker’s first-quarter deliveries fell short of expectations earlier this month, as Tesla looks to turn around two straight years of declining sales.
Tesla shares were little changed in recent trading, and have lost roughly one-quarter of their value since the start of the year.