Tesla is reportedly planning to produce a new, smaller, cheaper electric SUV for the mass market, following its successful Model 3 success. The company has reportedly contacted suppliers about manufacturing logistics and specifications for various components. The vehicle will be more than 18 inches shorter in length than its current Model Y SUV and will be cheaper than the Model Y, which currently has an MSRP of $39,990 for the lowest-tier model. It would be produced in China, with plans to expand production to the U.S. and Europe. This move signals a shift from luxury-priced vehicles to a more affordable model for mass market. Despite this, Tesla has seen demand issues for a while, including falling EV sales in the US and China, and its annual revenue declined in 2025 for the first time ever.