Next Big Thing: A Smaller Model Y with Huge Market Potential

Could Tesla’s announced next-generation vehicle be a smaller version of the Model Y?

Enrique Llanes
4 min readApr 25, 2023


Photo by SCREEN POST on Unsplash

The Model Y has become Tesla’s most popular choice around the world surpassing the Model 3 as the company’s bestseller in a short time.

Also, new factories in Texas and Berlin are exclusively producing this model which will increase output in the following years.

After March Investors Day, it is clear that Tesla is aiming for a cheaper and smaller vehicle to create a new category that can reach a wider market.

Rumors are that this new vehicle will be a compact SUV based on the current Model Y. It makes a lot of sense. Who would not take advantage of the already most popular model of the brand to design a smaller version?


Although recent price cuts have lowered the barrier for new buyers, the Model Y is still a pricy vehicle, ranging in the US between $49,990 and $56,990.

If Tesla expects to sell 20 million cars in 2020, it cannot be just by selling $50,000 vehicles. To reach a wider customer base, there has to be a cheaper vehicle.

This compact SUV could start as low as $25,000, which will set it in the line of…



Enrique Llanes

4X Top Writer // Tesla fan. Technology enthusiast. AI will change the world. Madrid.