Tesla confirmed late Tuesday night that a third-generation Tesla vehicle will debut in 2017 and it will cost $35,000.

The Tesla Model III will be half the price of the popular Model S. With sales of 22,477 Model S electric cars last year, the Tesla Model III is expected to compete with the BMW 3-series. The 3-series starts at a price of $32,750 (MSRP).

Tesla announced the Model III on Twitter, confirming reports from Auto Express magazine that the model was coming out.

Auto Express magazine had an exclusive interview with Tesla CEO Elon Musk about the Tesla Model III. In the interview the smaller Tesla Model III was rumored to be called the Model E, but Musk revealed that they already have a Model S and Model X.

"We were going to call it model E for a while and then Ford sued us saying it wanted to use the Model E -- I thought this is crazy, Ford's trying to kill sex! So we'll have to think of another name," Musk told Auto Express. "The new model is going to be called Model III, we'll have three bars to represent it and it'll be S III X!"

Thanks to the cheaper battery that will power the Model III from Tesla's Gigafactory, the price on the Model III will be much more affordable than the Model S.

The Model X will debut before the Model III. The Model X is a crossover vehicle that can seat seven passengers.

The Model III will be about 20 percent smaller than the Model S according to Musk and it will have a shorter battery life. The Model S gets about 306 miles before needing to be charged. The Model III will likely get around 200 miles before it needs to be charged, according to Auto Express.

Auto Express posted photos claiming to be pictures of the Model III which Tesla said on Twitter were mockups of what the car could look like.

What do you think of the more affordable Tesla car? Will you think of buying one? Leave us a comment below.