TSL is secretly developing a smaller and cheaper SUV: 4.28 meters long, with costs cut by 20%, codenamed NV91, aiming for mass production by midyear.

Reuters Exclusive: Tesla is secretly developing an all-new compact SUV, with a length of just 4.28 meters, and production costs at least 20% lower than the refreshed Model Y. The code names are NV91/NV93, and the plan is to begin mass production in China first, with the earliest launch in mid-2026. Internally, the vehicle is positioned as “autonomous driving, but with an option for human driving,” serving both the mass market and the self-driving vision through two tracks.
(Background: Elon Musk is pulling out bigger moves! Tesla has released a new model, the “Model Y L,” aimed at six-seat family vehicles, launching this fall)
(Additional context: JPMorgan slams Tesla as bearish ahead of its earnings report: price target $145).

Tesla is quietly developing a brand-new compact SUV. According to information Reuters obtained exclusively, this vehicle’s code name is NV91 or NV93, and it is the same project as the “$25,000 electric vehicle” Elon Musk has mentioned multiple times before.

At 4.28 meters long—an entire half meter shorter than the 4.78 meters of the current Model Y. This is not a refresh of the Model 3 or Model Y; it’s a completely new platform, with a production cost target at least 20% lower than the refreshed Model Y.

A big pivot in the affordable-car plan

In February 2024, Elon Musk suddenly announced the cancellation of the affordable electric vehicle plan, putting all resources into Robotaxi (Cybercab) and the humanoid robot Optimus, shocking the market. Now, that decision appears to be quietly reversed.

A Reuters source said Tesla has recently reached out to multiple suppliers to discuss details. The related project is currently in validation testing, and the earliest mass production timing would be mid-2026, but it could also be later.

A Tesla employee said the vehicle is internally positioned as “autonomous driving, but offering a human driving option,” meaning it is not simply an affordable commuter car—it’s making room for an autonomous-driving ecosystem.

Start with China, then move into the US and Europe

The production plan is divided into three stages: first launch production at factories in China, then expand to sell in the United States and Europe afterward. Taiwanese car owners may have to wait for a long time. Meanwhile, competition in China’s EV market has already turned fierce, with local brands like BYD continuing to pressure Tesla in the low-price segment.

Tesla’s 2026 Q1 delivery volume continues to face pressure, and JPMorgan has cut its price target to $145. At the same time, Cybercab is priced at around $30,000, and it is currently preparing for mass production at the Texas Gigafactory. In Davos, Elon Musk claimed that Robotaxi will “roll out across the US” by the end of 2026.

If this compact SUV is launched successfully, it will fill the price band below Cybercab, and it can also help the company stay above in its layout in the mass market again.

The biggest question in the market is whether Tesla plans to make an affordable car or keep pushing self-driving. According to Reuters sources and internal employees, this vehicle is designed to serve two goals at the same time.

In other words, it’s a transitional product for self-driving versions before Cybercab goes into mass production—and it’s a solution to stabilize sales volumes.