Tesla Is Reportedly Working On A New, Smaller Electric Car After All
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Hmm … curiouser and curiouser. In a saga that has gone on for several years, Tesla was not going to develop an electric car smaller and cheaper than the Model 3, and then it was, and then it wasn’t, and then it might be, and then it wasn’t, and now it seems to be doing so after all.
According to Reuters, four people familiar with this new development have claimed that Tesla is now working on a completely new, smaller, cheaper electric SUV.
What’s curious about this is Elon Musk claimed such a vehicle was not necessary because “Full Self Driving” and robotaxis would provide cheap transportation and dry up the demand for cheaper vehicles. However, over the past few years, Tesla sales have dropped and it’s been unable to get close to its target from a few years ago to sell 2 million vehicles a year, let alone it’s goal of selling 20 million vehicles in the year 2030. (Heck, Tesla would be lucky to get to 20 million cumulative sales by 2030 at this point!)
So, if the reporting is true, it appears that something has changed in Elon Musk’s mind. Though, it would probably be advisable to not dive too far into that mind…. Whether it’s what is going on with robotaxis or what is going on with the company’s vehicle sales, Tesla has apparently decided it should offer a smaller SUV — a vehicle class popular in Europe, South America, and Asia. Tesla is also reportedly struggling to find buyers in India right now, a market that would surely welcome a cheaper, smaller Tesla.
“Three of the people said the compact SUV would be produced in China, and one said Tesla also aims to expand production to the United States and Europe. The car would be 4.28 meters in length, or about 14 feet, two of the sources said. That’s significantly shorter than Tesla’s top-selling Model Y SUV, which is about 15.7 feet long,” Reuters reports.
Reuters also communicated with a Tesla employee about the possibility. “The Tesla employee declined to confirm or deny details of any specific vehicle but said, in general, the automaker now aims to build models that would be driverless but offer a human-driven option.” Hmm…. Why would they do that? Elon told us there would be no need for that, that it would be like having an attendant in the elevator to help you move between floors.
“While aiming for full autonomy across its lineup, the person said, Tesla realizes many global markets won’t see meaningful adoption – nor regulatory acceptance – of driverless vehicles for years.”
Hmm … curiouser and curiouser.
The new car is reportedly at a very early stage of development. Reuters also notes that even promised new models can sit in limbo for a long time — look at the Roadster 2.0 and Semi truck unveiled nearly a decade ago.
Naturally, I do think a smaller, cheaper Tesla SUV could sell quite well. Tesla is a well known brand globally and there are many people in markets where this vehicle class is popular who would love to get a Tesla but can’t afford the larger models. Look at China even, where Tesla achieves almost half of its sales. That said, in markets where Tesla is seen as a prestige brand, would a smaller, cheaper SUV drag the brand down and hurt sales of its core vehicles and profit margins as a result? Killing the Model S and Model X, the brand could really lose the halo effect that’s been around it for years. Overall, though, we’ve been saying for years that Tesla should offer models in more vehicle classes, especially this one, so we would expect to see the company’s sales increase if it develops such a model … quickly enough.
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