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

Tesla's remarkable trajectory in the automotive industry continues to intrigue many, especially considering the limited range of models they currently offer. With the discontinuation of the older Models S and X, CEO Elon Musk has redirected the company's focus toward ambitious projects, including the production of humanoid robots. Currently, Tesla provides only two models in the U.S., and sales of the much-anticipated Cybertruck have yet to meet expectations. However, a recent report from Reuters indicates that Tesla may be on the verge of introducing a new, smaller electric vehicle. This development is reportedly based on insights from four confidential sources affiliated with companies that supply parts and services to Tesla. They reveal that this upcoming EV will feature a completely fresh design, distinct from the existing Model 3 and Model Y. The anticipated compact EV is said to measure 168 inches (4.3 meters) in length, making it notably smaller than both the Model 3 (185.8 inches / 4.7 meters) and Model Y (188.7 inches / 4.8 meters). However, potential buyers in the U.S. may need to temper their excitement, as initial availability could be limited. According to three of the sources, this new vehicle is expected to be manufactured in China, which could lead to U.S. imports facing a steep 100 percent tariff. This tariff is one of the few policies that has remained steady across different administrations. Nevertheless, the possibility of expanding production to Tesla's existing factories in the U.S. and Germany could be explored in the future.