2026 Tesla Model Q set to be a Model Y Mini-Me

Sources from within Tesla have reportedly confirmed the upcoming Model Q will indeed be a shrunken, cheaper-to-produce version of the Model Y medium SUV.

According to a new report by Reuters, a trio of Tesla insiders claim the brand is working on a lower-cost version of the Model Y which is set to be made on existing production lines in Shanghai as of 2026.

The vehicle in question, widely anticipated to be the Model Q compact SUV, is said to be smaller and cost at least 20 per cent less to produce than the updated Model Y as a direct response to the ongoing EV price war Tesla is waging with myriad Chinese brands.

All of this intel roughly aligns with previous theories, expectations and information, save for the release date.

Previous reports had floated the idea of a 2025 global debut for the new budget-conscious model, specifically before mid-year, but it seems that timeline was either wrong or has been pushed back, potentially due to Tesla’s sales falling off a cliff in recent months.

Reuters has made waves with Tesla CEO Elon Musk before with its speculative and/or revealing reports and we’re sure this latest article will do the same seeing as the three insiders declined to be identified.

Tesla has confirmed plans for a smaller and cheaper model back in early 2023 but has thus far stopped short of revealing any key project specifics other than the targeted improvements in production and cost efficiencies as well as its place of manufacture: China, Texas and Mexico – pending Trump’s proposed tariffs.

Reuter’s insiders said the project was still confidential and not public knowledge, though previous reports have floated the ‘Project Redwood’ name.

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