Confirmed as part of the company’s Fourth Quarter 2015 Financial Results, the Model 3 will be roughly the same size as the Audi A4, BMW 3 Series and Mercedes-Benz C-Class, targeting a much higher-volume segment than Tesla has competed in before, particularly in European markets.

It will feature similar drivetrain technology to the larger Model S saloon and seven-seat Model X SUV, which is launching in Europe shortly, with large capacity batteries, ranges of up to 300 miles and fast recharging times. Prices could start at around £30,000-£35,000 in the UK.

Preparation is underway for production, with Tesla indicating that it will start building battery cells at its ‘Gigafactory’ in Nevada – a joint venture with Panasonic – this year. The company sold had sold 107,000 cars globally at the end of last year, with the Model S outselling the Audi A7 and A8 combined, and the BMW 6 Series and 7 Series combined, in Europe, the company said.