Tesla China President Tom Zhu recently spoke with China-based state media channel Xinhua Net about a variety of topics related to Tesla. While the focus was on general plans related to Tesla China's future operations, the $25,000 compact car came up. Zhu confirmed that the smaller, cheaper Tesla will be designed in China, at a research center at Tesla's Gigafcatory in Shanghai.

Zhu said the Tesla electric compact car will be built in China and sold across the globe. In terms of timeline, Zhu also confirmed that Tesla is already working on the construction of the dedicated Research and Development (R&D) center that will design the upcoming compact car. It will be the first Tesla R&D center in the country, as well as the first outside the United States.


Tesla built the Shanghai Gigafactory in record time. Not long after it was producing Model 3 sedans at the Phase 1 portion of the plant, it quickly constructed Phase 2, which is already building the Model Y electric crossover. There's no reason to believe the R&D center won't follow suit and be up and running in the near future.

Zhu said in the interview (above) via Teslarati:

“The center is in Tesla Gigafactory Shanghai, where we are now. We are now building our China R&D center right here. This R&D center is also the first Tesla R&D center outside the United States. The research and development center has all necessary disciplines, covering vehicle design, vehicle engineering, vehicle development, and vehicle testing."

Zhu explained that Tesla China has a goal to "design, develop and produce" its own original Tesla car to sell in markets across the globe. The target price is $25,000, however, it's important to note that Tesla's vehicle prices aren't consistent across the globe, and currency conversions can cloud the reality. Nonetheless, it will be the cheapest Tesla available in all markets where it's sold. Zhu shared:

“In the future, we want to design, develop and produce an original model in China, manufactured here and sold to the whole world. This R&D center is the starting point of the goal."

Other reports suggest that the Tesla compact car will be a hatchback built on the Model 3 platform. Road tests are expected to begin later this year.

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