Musk Tweet Reveals Tesla May Design Small Hatchback EV

Tesla Inc TSLA CEO Elon Musk replied to a customer's comment about the Model Y being slightly too big for most European cities. When asked about a smaller European style Hatcback, Musk said, "Probably a good one to design & engineer in Germany."

While Tesla's Model 3 starts at $35,000, and offers much more at that price than competing electric vehicles, it's still more expensive than the average purchase price of a car in America. Many owners were also disappointed that when revealed, the Model 3 didn't have a hatchback, unlike every other Tesla model sold today.

Probably a good one to design & engineer in Germany

— Elon Musk (@elonmusk) July 10, 2020

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Why It's Important: Bringing an even lower cost, smaller Tesla could help Tesla's mission of transitioning the world to sustainable transport. This would give more people the ability to purchase a Tesla.

And since electric vehicles have less moving parts, and Tesla also sells software with the cars, the company may have an easier time making a profit on these small vehicles than traditional auto manufacturers.

Benzinga's Take: While many agree Tesla's Model 3 is a good price point for a smaller car, most still can't afford the base model. If Tesla truly wants all people driving an electric vehicle, a smaller, more cost-conscious option is a must. This vehicle would also do well in many parts of the world that don't have roads as big as the U.S., such as many parts of Europe and Asia.

Photo courtesy of Tesla.