Tesla Develops Compact Electric SUV Under Model 3 Price

Tesla is developing a new compact electric SUV that would be smaller and less expensive than its current Model Y, according to four people familiar with the matter.

The vehicle, described as an entirely new design rather than a variant of the Model 3 or Model Y, would measure about 4.28 meters in length, or roughly 14 feet. That makes it substantially shorter than the Model Y, which spans 4.75 meters, or 15.7 feet. Sources said Tesla has recently contacted suppliers to discuss manufacturing processes and component specifications for the project, which remains in early stages. The company has not confirmed the plans or indicated whether production has been formally approved.

To achieve a price below the entry-level Model 3, which starts at around $37,000 in the United States and 34,000 in China, Tesla intends to incorporate a smaller battery pack, resulting in a driving range shorter than the Model Y's 306 to 327 miles. The SUV would also feature a single electric motor instead of the dual-motor setup in higher-end models and weigh approximately 1.5 metric tons, a 25 percent reduction from the Model Y's two metric tons. Three sources indicated initial production would occur at...