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Ars Technica·2 min read

First, Tesla canceled the Model 2—now it's working on a new small EV

Tesla is developing a new small EV after canceling the Model 2.

Tesla is reportedly working on a new smaller, affordable electric vehicle, following the cancellation of the Model 2. Sources indicate that this new model will be an all-new design measuring 168 inches long, significantly shorter than the existing Model 3 and Model Y. However, production may occur in China, which could complicate US sales due to tariffs, and the project has not yet been officially greenlit by CEO Elon Musk.

Key Takeaways

1.
The new EV is reported to be 168 inches long, shorter than the Model 3 and Model Y.
2.
Production is likely to occur in China, facing potential 100% tariffs for US imports.
3.
Tesla's free cash flow is projected to swing from $6.2 billion to -$5.8 billion by the end of 2025.

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First, Tesla canceled the Model 2—now it's working on a new small EV | Trace