Called the Model 3 – written as Model III – the new model will be 20% smaller than the Model S luxury sedan, according to an interview held between Tesla CEO Elon Musk and Auto Express.

The report also says the model will go on sale in the U.S. for $35,000 in 2017 and about £30k in the UK as the carmaker looks to target affordability.

According to the report it is likely the new compact executive car will be based on an all-new platform rather than the one from the Model S, which will be engineered by Tesla’s engineering chief, Chris Porritt.

The report also says the new model will have a range of 200 miles (320km).

The recently announced new British-based R&D centre should be operational in time to help with the development of the new model whilst the firm’s new “Gigafactory” will make the batteries.

Meanwhile Elon Musk has also said that it is looking to offer owners of its first model, the Roadster, a battery upgrade to increase its range from 245 miles to around 400 miles.

‘The Roadster had an old-generation battery. We’ll upgrade it to a new generation battery pack and it should have a range of about 400 miles, which will allow you to drive from LA to San Francisco non-stop,’ he said.