Tesla's Q4 and full-year 2022 financial report stated that its next-generation vehicle platform is under development and that additional details would be shared at the annual Investor Day in March 2023.

Other than the fact that it exists, not much else is known about the new platform. The general consensus is that Tesla is working on a smaller, more affordable car that will slot in underneath the Tesla Model 3 and Model Y, but we don't know that this is what the new platform is for.

Despite the recent price cuts, and an increase for the Model Y just days after, the cheapest model on sale in the USA (Model 3 RWD) still costs $43,990. This new entry-level price is below the average new car price in the USA but still out of bounds for many.

With new rivals like the $30,000 Chevrolet Equinox on the horizon and established models like the Bolt EV still doing well, Tesla must plug a gap. A smaller model also fits with the spy shots of an upcoming model our photographers snapped recently.

CEO Elon Musk has stated that the new platform would be produced at a much higher volume than any other model. That makes sense considering economies of scale. The profit margins on all other Teslas are high, but a smaller model will sell in bigger numbers but make less money per unit.

That's why we think it will be more than just one model. An EV platform is easy to adapt, so Tesla will likely do the same as it did with the Model 3/Y - two models built on one platform. Since the sedan and SUV have worked so well, Tesla will likely follow the same route with its smaller car.

We've also seen suggestions that it might be the basis for the long overdue robotaxi. All it needs is four seats, air-conditioning, Wi-Fi, and Tesla's upcoming Autopilot and Full Self-Driving suite, called Hardware 4.0. Elon Musk has confirmed that the new suite can't be retrofitted due to that weird phase when the company couldn't decide whether it wanted radar sensors or not. Since dropping the sensors in favor of a camera-only system, Tesla has returned to equipping cars with radar.

Still, Tesla owners can take some comfort in the knowledge that Hardware 3, currently equipped to all models fitted with the Full Self-Driving option, is still good enough to live up to Musk's promises. Whether those promises can be believed is a topic for another day.