Form a Q! Cut-price 2025 Tesla Model Q to arrive in the first half of next year as US brand readies small SUV to battle the Hyundai Kona, BYD Atto 3 and MG ZS EV

Tesla will finally launch a more affordable EV to sit below its Model 3 and it’s coming sooner than you think.

It’s called the Tesla Model Q and it will land in the first half of next year, according to a senior Tesla executive.

During a call with Deutsche Bank, Travis Axelrod, Tesla’s head of investor relations, announced to the car-maker’s backers that the new cheap EV would be priced from less than $US30,000 ($46,500) and could possibly even cost less than $US25,000 ($38,800).

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According to Global China EV, which helped break the story, Axelrod said the new Model Q would be built on the brand’s “latest platform”.

It is believed to be undergoing development under the ‘Redwood’ codename.

The shock announcement that the cheap Tesla is on track for an arrival next year comes just months after April’s revelation that the entry Model 2 EV had been shelved, with the US brand preferring to invest in robotaxis.

Claimed to be 15 per cent smaller and 30 per cent lighter than the current Model 3, the new Model Q is said to have an overall length of around 3988mm.

Advanced production techniques will reportedly make the Model Q cheaper to produce than the Model 3 by potentially up to 50 per cent.

During the discussions with the bank it was stated the Model Q will be powered by a range of lithium iron phosphate batteries with buyers offered two sizes – a 53kWh unit and a larger 75kWh pack.

Both single- and dual-motor configurations will also be available.

Top of the range Model Qs will be capable of covering more than 500km on a single charge.

Tesla is keen for Chinese buyers especially to see the new EV as a direct rival for both the Volkswagen ID.3 and the BYD Dolphin that currently account for more than 20,000 vehicles sales per month combined in China.

Tesla hopes the arrival of the Model Q it will provide a huge boost in sales and drive growth of between 20-30 per cent in 2025 alone.

Next year is shaping up to be a big one for the US car-maker, with Tesla already promising the facelifted Model Y ‘Project Juniper’ will make its debut.

Adding credibility to the 2025 Model Q theory is the teaser Musk himself released back in June that included three models under drapes thought to be both the Model Q, Model 2 small car and new van or people mover.

Some US commentators have suggested that instead of a small SUV, Model Q (or Project Redwood) could be a cut-price derivative of the Model 3 sedan that will feature small batteries, less tech and lots of engineering cost-cutting under the skin.

Whatever’s the case expect an update likely from Tesla’s outspoken CEO, Elon Musk, on the new Model Q soon.