American electric vehicle (EV) giant Tesla is finally taking steps towards correcting its old mistake. According to a Reuters report, Tesla is developing a new, smaller and much cheaper electric SUV, which will be much smaller and cheaper than the current Model Y. This news is especially important for the Indian market, where companies like Tata Motors and Mahindra are already selling affordable and locally made EVs.
According to the report, this new compact SUV is still in the initial development phase. Tesla has contacted suppliers in recent weeks to discuss the manufacturing process as well as the specifications of the components. Quoting sources, it has been revealed that the length of this car will be only 4.28 meters, which is much smaller than Tesla's best-selling car Model Y (about 4.79 meters or 15.7 feet).
Preparation to bring it at cheap price
The weight will also be kept at just 1.5 metric tons, whereas the weight of Model Y is around 2 tons. To save costs, it will use a smaller battery pack, due to which the driving range will be less than the Model Y's 306-327 miles (about 492-526 kilometers). Also, instead of dual motor, a single electric motor will be given.
Talking about the price, this new SUV will be much cheaper than Tesla's entry-level Model 3. The starting price of Model 3 in China is around $34,000 (approximately Rs 29 lakh), while in America it is around $37,000. There are plans to keep the price of the new car much lower than these, although the exact figure has not been disclosed yet.
Production will take place in China first
Its production will be mainly in the Shanghai factory of China, but later there are plans to expand to America and Europe also. The timeline for commencement of production is not yet clear and the chances of it starting this year are slim.
Why will this be a game-changer for the Indian market?
India is the third largest automobile market in the world, but EV penetration is still only around 4-5%. Customers here are extremely price-sensitive and the average car price is around Rs 12 lakh. Tata Motors has captured more than 60% share in the EV market with affordable cars like Nexon EV, Punch EV and Tiago EV.
Mahindra is also in a strong position with models like XUV400, BE 6 and XEV 9e. These companies focus on local manufacturing, small battery packs, design suitable for Indian roads and climate and affordable price (Rs 10-25 lakh range).
Tesla is still bringing expensive cars in India. The price of Model Y here starts from Rs 60 lakh to Rs 70 lakh, which is very expensive due to import duty. In such a situation, Tesla remains a distant dream for the common Indian customer. If the new small SUV is launched in India and local production or assembly starts, it could come in the range of Rs 20 lakh.