This would be a completely new vehicle, not a variant of the existing Model 3 or Model Y, sources claim. The new electric car is reportedly about 4.3 meters long, which is shorter than the 4.6-meter-long Model Y. Reuters did not have details on whether this will be an autonomous or conventional vehicle, but one source said Tesla generally wants to have a driverless option in its vehicle lineup.
The company had previously worked on an affordable electric car with a target price of $25,000 but appears to have abandoned that plan in 2024 to focus on robotaxi vehicles.
In early 2026, Tesla discontinued two of its electric models to shift its business focus toward robotics. Perhaps the brand felt it needed a stronger market presence after discontinuing the Model S and X, leading it to revive the affordable electric vehicle project—or perhaps this is just the latest whim of the company's management that won't actually come to fruition. Time will tell.