Is Tesla working on a small compact car?

Tesla announced the opening of a brand new design studio in China.
The Chinese based studio will be in charge of designing cars for the world market.
 Which also means they don’t intend to have models specific to China.
(Not sure what will happen to their existing US design studios…)

The illustration above was sent to me by a reader and shows what a small Tesla hatchback could look like.
And I think it would be perfect for Tesla’s new factory in Germany.
While the Model 3 is quite popular in Europe, it is still a large car for that market. A Golf sized model would be perfect.

I am still amazed by the Model 3 popularity in the US. It is still an expensive car (Basically staring at $38 000. With most paint and decent looking wheels being very expensive options)
And yet, it was more popular than the Honda Accord last year. A much cheaper car from a very well established brand with impeccable reputation.
On top of it, the Model 3 is a sedan. A body style that is becoming less popular every year.

I do think a smaller hatchback would do exactly the same in Europe: compete with the established players. Like the Golf, Astra, Megan, 308 and others.

It would be the perfect car for their new European factory.