Big changes coming for Tesla, including small car

Electric car pioneer Tesla is planning big changes that will incorporate a smaller EV and a radical change for its upcoming Model Y SUV.

Speaking on an investor earnings call during the announcement of the California-based company’s fourth consecutive quarter of profit, Tesla CEO Elon Musk gave key clues to upcoming change for the brand.

One of the most significant is the revelation there will soon be a smaller, cheaper vehicle than the Model 3 that currently spearheads the Tesla EV range.

“It would be reasonable to assume that we would make a compact vehicle of some kind and probably a higher capacity vehicle … these are likely things at some point,” said Musk, who was also cautious of revealing too much that could potentially slow sales of existing models.

“I don’t think we can comment on our detailed road map beyond what’s announced because we want to reserve that for product launches.”

Already the internet has sprung into life suggesting the smaller Tesla called by called the Model 2, to be priced well below the Model 3, which starts at around $79,000 in Australia.

By making a smaller car such as the Model 2, Tesla would be able to reduce the size of the battery pack without reducing the range of the car.

Musk is adamant electric cars need to be able to drive upwards of 300 miles (483km) to make them appealing to buyers increasingly transitioning from internal combustion engine vehicles.

Batteries are also the most expensive component of an EV, so having fewer of them makes the car cheaper – and, therefore, more appealing to consumers.

Musk also referred to a “higher capacity vehicle”, which some have speculated could be a van of some sort, possibly incorporating autonomous technology to make it appealing for ride sharing.

Musk also alluded that there were updates and tweaks that could be made to improve existing and upcoming Tesla models to improve their appeal.

“There’s a long way to go with the [Model] 3 and [Model] Y and Cybertruck … I think we’ll do the obvious things.”

And even before the Model Y – a mid-sized SUV based on the architecture of the popular Model 3 – has gone on sale in Australia Musk is talking of changes.

He says the Model Y that will be produced in a factory currently being built in Germany will be radically different to the car already on sale in America.

“We’re getting way better at making cars,” Musk told investors who have helped make Tesla the most valuable car maker in the world. “We’re really changing the design of the car in order to make it more manufacturable.

“The fundamental architecture of Model Y will be different in Berlin. It may look the same … but the internals will be different, quite different and fundamentally more efficient architecturally than what we’ve done today.”

Tesla has not announced details of the Model Y that will be sold in Australia, including which factory it will be sourced from.

The Model Y is expected to arrive here in 2021.

Tesla is also planning major changes to battery technology and has a planned – and much hyped – Battery Day in September, where the company plans to outline the new tech.