Hyundai is quietly lining up its next big volume play in electric cars, and it is not a flashy flagship. The company is road testing a compact battery-powered SUV that is meant to sit at the bottom of its EV range and tempt drivers out of small gas hatchbacks. The move signals how seriously Hyundai is taking the affordable end of the market, where price, practicality, and timing matter more than wild performance numbers.
Spy photographers have already caught the camouflaged prototype on public roads, hinting that development is well past the sketchpad stage. Paired with earlier design studies and Hyundai’s broader EV rollout plans, the little SUV looks like the missing link between today’s Ioniq models and the next wave of budget-friendly electric city cars.
What the camouflaged SUV tells us
The clearest look at the project so far comes from Spy shots of a heavily disguised Hyundai Is Testing Small Entry Level Electric SUV running around India, where compact crossovers are a staple of the streets. The test car sits upright with short overhangs and a stubby nose, classic cues for a city-focused SUV that still wants to look tough enough for rougher roads. Thick camouflage hides the surfacing, but the proportions suggest a footprint closer to a supermini than a family crossover, which should help keep weight and cost in check.
Additional images of the same prototype underline that this is not a rough mule bolted together from other models, but a near-production body that already carries production-style lighting and glazing. That lines up with descriptions of a camouflaged Hyundai electric SUV prototype spotted in Indi, which again points to a dedicated small EV rather than a quick conversion of an existing gas car. For buyers, that usually translates into better packaging, with more cabin space squeezed into a shorter body.
From Concept Three to a real-world budget EV
Hyundai has not been shy about previewing its next wave of compact EVs. At the Munich Motor Show, the company rolled out the Concept Three, a playful, boxy show car that previewed a smaller electric model that could sit below the Ioniq 5 in size. Reports on the Hyundai design study described it as a glimpse of an upcoming Ioniq that would target city drivers who want EV tech without a huge footprint.
We got a sneak peek of the same idea with the Concept Three at the Munich Motor Show in September, and that show car is now looking more like a blueprint than a fantasy. According to Hyundai’s German website, the production version is intended to replace one of the brand’s top-selling small hatchbacks, which explains why the company is so focused on getting the size and stance right. Another report on the same project notes that Hyundai is pulling the plug on its best-selling ICE powered hatchback to make room for the new EV, a bold move that raises the stakes for this small SUV’s success.
How it fits into Hyundai’s EV playbook
Hyundai is already deep into electrification, and this entry-level SUV is clearly part of a bigger pattern rather than a one-off experiment. Currently, about 80% of Hyundai’s European lineup is available with an electrified powertrain, and the company plans to offer an electric option for every major segment in the region by 2027. That strategy is backed up by a wave of new models, including an electric hot hatch that is set to kick off several fresh EV launches for European customers.
The small SUV on test slots neatly into that roadmap. Hyundai is already expanding its entry-level EV lineup with models like the affordable IONIQ 2, and the new SUV would give the brand a budget-friendly crossover to sit alongside those hatch-style cars. In Europe, The All Hyundai INSTER has already been named Supermini of the Year at the 2026 TopGear.com Awards, showing that buyers are willing to embrace small EVs when the package is right. The INSTER is described as the brand’s first A-segment sub-compact EV, with a range of up to 229 miles, and it sets a clear benchmark for what Hyundai expects from its smallest electric models.
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