Tesla’s 3 Series competitor will have steel body

Tesla is planning to launch a smaller all-electric sedan to take on the BMW 3 Series, Audi A4, Mercedes-Benz C-Class and Lexus IS. Tesla chief vehicle engineer Chris Porritt told Autocar that for the vehicle to be cost competitive against its petrol- and diesel-powered competitors it would likely ditch the aluminium platform used by the Model S.

Porritt, who was man behind the limited edition Aston Martin One-77, says, "I expect there will be very little carry-over. We’ve got to be cost-effective. We can’t use aluminium for all the [small car’s] components."

The smaller electric sedan is expected to be available from late 2016 or early 2017, and will be around 20 per cent smaller than the Model S, which launches in Australia in the coming months.

CEO Elon Musk said at the company's recent annual shareholder meeting that Tesla wanted to name the new sedan Model E. It may have proven amusing to have a Model S, a Model E and a Model X (above) in Tesla's showrooms, but Ford objected and Tesla relented. The company has yet to announce what the smaller sedan's name will be.

Tesla is currently hard at work refining the operation of the falcon wing doors on the upcoming Model X SUV, as well as finalising plans for its lithium-ion battery Gigafactory.