New Tesla Compact EV coming next year: Carwow renders new budget electric car

April 12, 2024 by

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Elon Musk has confirmed that the new Tesla Compact EV will go on sale in late 2025, and Carwow has had a go at predicting this new MG 4 alternative’s design. 

  • New Tesla compact EV confirmed for 2025
  • Elon Musk denies reports that the car will be scrapped in favour of Robotaxis
  • Design previewed in exclusive Carwow renders
  • Takes inspiration from the Model 3 and Cybertruck
  • Set to cost from around £22,000
  • New battery is safer and more efficient
  • Electric motor is cheaper to produce

With customers finally taking delivery of their Cybertrucks, attention has now shifted to the forthcoming Tesla compact EV. A report from claims that Tesla will scrap this car to focus on self-driving Robotaxis instead, however Elon Musk has taken to social media to deny this.

He also gave us a glimmer of hope for the MG4 alternative earlier this year by finally setting a production date of late 2025. It’s rumoured to cot under £22,000, which would make it one of the cheapest electric cars on the market.

Has Tesla scrapped the compact EV?

The future of the Tesla Compact EV has been thrown into doubt by a report from claiming that the brand would scrap the car and shift focus towards the self-driving Robotaxi.

Tesla’s CEO Elon Musk has taken to X (formerly known as Twitter) to seemingly deny these claims, simply posting “Reuters is lying”. He didn’t reference and specific inaccuracies.

Cancelling the compact EV would be quite the U-turn for Tesla, because Musk confirmed that the car would go into production in late 2025 during Tesla’s 2023 financial results call. He said: “I don’t want to blow your minds but I’m often optimistic regarding time, but our current schedule says that we will start production towards the end of 2025, some time in the second half.

“That will be a challenging production ramp. We’ll be sleeping on the line practically, but I am confident that once it is going it will be head and shoulders above any other manufacturing technology that exists anywhere in the world.”

The target of 2025 does seem a bit ambitious. The Cybertruck was meant to go on sale in 2021, but it was pushed back to late 2023 by the time a raft of production issues had been ironed out. You can expect to see a concept version of the new compact EV at some point this year.

EXCLUSIVE RENDER: Carwow imagines new Tesla Compact EV’s design

It may be slated for a 2025 release, but Tesla still hasn’t revealed the new compact EVs design. A few teaser images have been snuck into Tesla presentations in the past months, and the Carwow team has used these pictures to predict what the new car will look like.

Tesla doesn’t really have a specific design language, every car seems to look wildly different to the one that came before, so it can be hard to predict where the brand will go next. The design sketches above appear to show a short, bubble-shaped car with a squat stance, something which Carwow has carried over to these renders. Like the Cybertruck, this car has a short bonnet with the windscreen extending forward quite a long way, something which will aid interior space.

In true Tesla style, you can expect to see a smooth and uncluttered front bumper, with just a slim vent lower down to cool the battery. The headlights are also very similar to the sleek new LEDs found on the new Tesla Model 3, and the light bar across the front is reminiscent of the Cybertruck.

Tesla could add some Cybertruck-esque triangular door mirrors as well. Looking to the rear of the car, it has a similarly clean design to the front. That full-width light bar and the small tail lights echo the rear end of Tesla’s pickup truck, and there are some subtle reflectors in the lower bumper like on the new Model 3.

These Carwow exclusive renders are just a prediction of what this new compact EV might look like, you’ll probably have to wait until the end of 2024 to find out how the car will actually look.

How much will the new Tesla compact EV cost?

Tesla’s self-proclaimed Techno King Elon Musk has already confirmed that the new compact EV could cost around $25,000, or £22,000. That’s £5,000 cheaper than the MG 4, and it’s almost £10,000 less than a BYD Dolphin.

Check out Mat’s in-depth review of the MG 4…

So how is this car going to be so cheap? Well aside from a raft of new battery and motor tech, Tesla is also working on some new, more efficient manufacturing techniques which should lower the cost of production.

The Tesla Model 3 and Monel Y make their way up the production line as a whole car, requiring bits to be assembled and disassembled multiple times along the way for things like painting and wiring.

This new car however will be built differently. Teams of people and robots will work on fully assembling separate parts of the car, before marrying them together at the end in one go. For example, the doors will be built, painted, wired and the door cards assembled off the car, before being bolted on at the end of the line. This means the car is only fully built once.

Musk claims that this will yield a 30% improvement in time, space and efficiency, as well as make this car around 50% cheaper to build than the Model 3 and Model Y.

The new Tesla Cybertruck replaces a lot of cables with wireless transmitters to save weight and make it easier to build…

In addition to this, a lot of work is being done to reduce the amount of wiring. All new Tesla models will use a 48V electrical system as opposed to a 12V setup, allowing for smaller and lighter wires to be used. A lot of wiring will also be removed completely, using wireless networks to control certain things instead.

New Tesla compact EV batteries and range

When this new Tesla compact EV does arrive, it’ll use a new type of battery which is more powerful, safer and cheaper than the Model 3’s thanks to something called a tabless design.

This technology is essentially a new way of connecting the battery’s cells together, and it reduces the size of the battery by around 35%. They can also store and release more energy without overheating, giving them as much as 16% more range per kilowatt-hour than traditional batteries.

Tesla is also planning to make the battery a structural part of the car, helping make it lighter and stronger, 10% lighter to be precise. That’ll boost the range by a further 14%. Let’s assume for the sake of argument that the new Tesla hatchback has a battery half the size of the Model 3’s, this would equate to a range of around 180 miles.

See how the Tesla Model 3 gets on in a range test…

To put that into perspective, the £27,000 Fiat 500 Electric has a range of 118 miles, potentially 62 miles less than the entry-level Tesla. And that car could end up costing around £5,000 less.

New Tesla compact EV motors and performance

To help further reduce the cost of this new Tesla, it will use a new type of electric motor which uses no rare earth materials. This makes it cheaper to make and lighter. In fact, this new drive unit will cost just $1,000 (£820) to produce, and it can be built in a smaller factory to help save even more money.

Tesla’s new drive unit will be smaller and cheaper to make…

So what does this mean for performance? Well Tesla will probably only use one motor to keep the price down, but that doesn’t mean it’ll be slow. Rear-wheel drive versions of the Tesla Model 3 can do 0-60mph in 5.3 seconds, quick enough to beat the Honda Civic Type R by half a second, and it’s possible that this lighter car with its clever batteries could be even quicker.

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