Tesla’s “more affordable models” plan has led to two distinct developments: cheaper versions of the existing Model 3 and Model Y introduced in 2025, and a separate smaller SUV that Reuters reported was in development in April 2026. Tesla’s surfaced public materials do not confirm that SUV’s name, price, specifications, production timing or markets.
What Tesla meant by “more affordable models” in 2024
On April 23, 2024, TechCrunch reported that Tesla’s revised growth plan included “more affordable models” expected the following year. The company did not identify the vehicles or provide details on its investor call, according to the report. The announcement came after early-April reporting that Tesla had abandoned work on a low-cost next-generation car, but that context did not establish what the later plan would produce.
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At the time, the phrase left open whether Tesla meant lower-priced versions of vehicles it already sold, entirely new models, or both. Subsequent developments point to both—but they should not be treated as the same vehicle program. TechCrunch’s April 2024 report describes the original announcement and the uncertainty surrounding it.
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On October 7, 2025, the Associated Press reported that Tesla had introduced cheaper versions of two existing vehicles: the Model 3 sedan and Model Y SUV. AP characterized them as stripped-down offerings. Its launch-era U.S. price figures were below $37,000 for the Model 3 and just under $40,000 for the Model Y. Those are figures reported at the time, not current quotes or a guarantee of today’s prices or availability.
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These versions were lower-cost takes on familiar models, not confirmation of a new small car or SUV. For current pricing, equipment and availability, check Tesla’s listings for your market; vehicle prices and configurations can change. The Associated Press report provides the dated announcement and its U.S. price figures.
What Reuters reported about a separate smaller SUV
On April 9, 2026, Reuters reported that Tesla was developing an all-new, smaller and cheaper electric SUV. The report, republished by Yahoo Finance, cited four people familiar with supplier discussions and described the project as a new vehicle rather than a Model 3 or Model Y variant. Reuters said Tesla aimed to price it substantially below the entry Model 3, but reported no confirmed target price or launch date.
This is a reported development, not a public Tesla specification sheet or confirmation of a production-ready vehicle. Reuters’ account does not establish its consumer-facing name, final design, range, battery, performance, equipment, production start or markets. Calling it “Model 2” as though that were its official name would go beyond what the reporting establishes. Reuters’ report via Yahoo Finance attributes the project details to unnamed sources.
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How the developments differ
| Development | What it is | Price evidence | Confirmation status |
|---|---|---|---|
| Cheaper Model 3 and Model Y versions, announced in 2025 | Lower-cost versions of existing vehicles: a sedan and an SUV. | AP reported launch-era U.S. prices below $37,000 for the Model 3 and just under $40,000 for the Model Y on October 7, 2025; these are not current quotes. | AP reported that Tesla introduced the versions. |
| Smaller SUV reported in 2026 | A separately reported new SUV, not a Model 3 or Model Y variant, according to Reuters. | Reuters said it was intended to be substantially cheaper than the entry Model 3; no confirmed target price was reported. | Reuters reported development based on four unnamed sources; the surfaced official materials do not confirm its specifications or production plan. |
Why lower prices could help—and what they might cost Tesla
A less expensive vehicle could broaden the pool of buyers Tesla can reach and support higher sales volume. The tradeoff is that selling at a lower price can put pressure on margins. Reuters coverage of the lower-cost EV plan presented the volume opportunity alongside that margin risk as investor interpretation—not as a Tesla forecast or a proven result.
The available figures do not quantify how much the plan might change Tesla’s demand, sales or margins. Reuters’ investor-focused coverage via MarketScreener discusses the potential tradeoff.
What Tesla has officially confirmed about the reported SUV
Tesla Investor Relations published its Q2 2026 results on July 22, 2026. The surfaced release did not identify or confirm the separately reported smaller SUV. That is a limited check of the company’s results page, not evidence that Tesla made no other statement elsewhere. As of October 4, 2026, the surfaced official materials do not establish the SUV’s final identity, specifications, price, production date or intended markets.
Tesla’s Q2 2026 results release is the official company update referenced here.
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