Tesla's Cheap EV Keeps Almost Existing: A New Rumor, a Flat Denial, and a Track Record of Being Wrong About That

Tesla's Cheap EV Keeps Almost Existing

Tesla has promised a genuinely affordable electric vehicle for years, cancelled one version of it, delayed another, and now — according to a fresh wave of reporting — may be building a third attempt that nobody at the company will confirm. The whole saga is a useful case study in how to read automotive rumors: multiple real reports, a flat denial from Tesla's China operation, and a track record that suggests the denial shouldn't be the last word.

Three Different "Cheap Teslas," Three Different Fates

To make sense of where things stand, it helps to separate the threads, because Tesla has had more than one "affordable car" project running at once.

The first was codenamed NV9 — widely reported as the roughly $25,000 "Model 2" — which Reuters reported Tesla had scrapped back in 2024 in favor of focusing on robotaxis. Elon Musk called that report "lying," on X at the time. Electrek and other outlets later concluded, based on their own reporting, that the project really had been shelved or deprioritized, even without an on-the-record admission from Tesla.

The second is E41, a stripped-down, cheaper variant of the existing Model Y rather than an all-new vehicle. Reuters reported in 2025 that E41 would cut cost by removing features like power-folding mirrors, the panoramic glass roof and the second-row display, among other changes surfaced through firmware leaks. That project was real enough to get a name and a production target — reportedly around 250,000 units in the US for 2026 — but it has slipped repeatedly. Reuters reported delays pushing the launch from the first half of 2025 to "sometime between the third quarter of 2025 and early 2026." As of this writing, no confirmed on-sale date has materialized.

Now There's a Third Rumor — and a Denial

In April 2026, Reuters reported, citing four unnamed sources, that Tesla is developing yet another vehicle: a genuinely smaller compact SUV, reportedly around 4.28 meters long against the Model Y's roughly 4.75 meters, built around a single motor and a smaller battery pack, and weighing in at about 1.5 metric tons versus the Model Y's roughly 2 tons. Three of Reuters' sources reportedly said it would be built at Tesla's Shanghai Gigafactory, priced well below the Model 3's China starting price, with US and European production potentially following later.

Tesla's China operation pushed back almost immediately. According to the Chinese financial wire Cailian Press, Tesla China said the market information being reported was "inaccurate." Tesla did not respond to Reuters' own request for comment, and the company has offered no further public statement on the project since.

That denial is worth weighing against Tesla's track record rather than taking at face value. The company issued a similarly flat denial around the NV9 cancellation in 2024, which reporting subsequently treated as having been accurate in substance despite the public pushback. That history doesn't make the April 2026 denial false — it genuinely might be — but it's a reason outlets like Electrek have continued treating the smaller-SUV project as an open question rather than a closed one. Reuters itself could not confirm whether Tesla has given the vehicle a formal production green light, and coverage at the time suggested a 2026 start was already considered unlikely given how early-stage the project reportedly was.

Why the Timing Matters Right Now

The reason this is worth revisiting this week specifically: Tesla's Q3 2026 earnings call is scheduled for October 21, with Musk expected to field questions on AI, full self-driving and the robotaxi rollout. Tesla's quarterly calls have been the venue for previous affordable-car updates and walkbacks, including the original "more affordable models in H1 2025" promise made back in an October 2024 call. If there's a status update on either E41 or the smaller Shanghai-built SUV, that call — not a leak — is the most likely place it surfaces next.

The UAE Angle

None of this is confirmed for Gulf buyers specifically, and nothing in current reporting mentions UAE pricing or availability for any of these variants. But the outcome isn't irrelevant here: Tesla models, including the Model Y, are already a visible presence on Dubai roads, including in ride-hailing and taxi fleets, and a genuinely cheaper variant — whether it's the stripped E41 or the smaller Shanghai SUV — would likely arrive in right-hand-drive Gulf markets on a lag behind the US and China, as Tesla's other models have.

The Bottom Line

What's actually confirmed: Tesla killed one cheap-EV project, built and delayed a second one (E41), and is now the subject of a fresh, Reuters-sourced report about a third, smaller vehicle that Tesla China has publicly denied. What's not confirmed: whether that third project is real, what it will be called, when or where it might launch, or whether it will ever reach the Gulf. Treat all of it — including the denial — as provisional until Tesla says something on the record.