Could a compact hatchback be coming from Tesla?

Recently, Elon Musk hinted that a compact Tesla hatchback might (someday) be designed and engineered in Germany. Wait. Could this really be happening? Soon? Well... it's certainly possible as the fourth Tesla Gigafactory is quickly taking shape — especially if it's constructed as lightning-fast as Tesla's prior Shanghai Gigafactory. 

Above: An artists's design rendering of a possible future Tesla hatchback EV (Source: Budget Direct Car Insurance)

If this new compact EV from Tesla comes to fruition, production (hypothetically) could ramp at its manufacturing plant in Grünheide — the location where Tesla is currently using only a portion of the land they originally purchased for 40M Euros.

So how can we be so sure this is in the cards for Tesla? It turns out that Elon Musk responded to a tweet from an observer expressing some concern about the size of Tesla's Model Y. Perhaps Model Y is a bit large for some cities across Europe? And a compact hatchback might make more sense?

Twitter: Elon Musk

Theoretically, a compact EV from Tesla could compete with the likes of Renault Zoe, Fiat 500e, and BMW i3. Yes, Tesla has an opportunity to disrupt this particular segment in Europe. Consider: Tesla has some serious "perks" such as better efficiency, better range, free software updates, and a widely available and ever-growing Supercharger network.

A smaller battery pack of around 40-50 kWh would likely take just 10-20 minutes to charge up to 80-100%. And even with home and/or destination chargers, the smaller battery pack will require considerably less time to recharge.

Above: Illustration of a compact Tesla hatchback posted by Tesla China along with job postings for the Shanghai Tesla Design Center (Source: Tesla China)

This isn't the first time the rumor mill got started when Tesla teased a compact hatchback EV. An illustration (see above) of a electric hatch was released by Tesla along with its job postings for their Chinese Design Center after the official Made-in-China Tesla Model 3 delivery ceremony.

In any event, something like this smaller Tesla hatchback could (indeed) be a good solution for tight European roads. And, narrow roads in China too. And, for that matter, India. Also, there are car buyers, worldwide, who don’t need (or want) a family sedan or SUV. In addition, with a potentially lower price point, a compact electric hatchback would certainly accelerate Tesla's mission to reach the masses.

Above: A deep dive into the potential for a compact hatchback from Tesla (YouTube: Infowealth)

Update: On Tesla's Q2 Earnings call this week, Elon Musk further cemented this possibility noting, "the thing that bugs me the most about where we are right now is that our cars are not affordable enough. We need to fix that... and make the cars as affordable as possible." He elaborated, "it would be reasonable to assume that we would make a compact vehicle of some kind."

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Written by: Iqtidar Ali. An earlier version of this article was originally published on Tesla Oracle.