Tesla Motors has announced the upcoming Model III sedan will form the basis of a crossover.

Speaking at the EIA Energy Conference in Washington D.C., Tesla's chief technical officer JB Straubel revealed the company's plans to sell 500,000 units annually by the end of the decade and the bulk of these sales are expected to come from the upcoming Model III. It is being developed alongside a crossover variant which will be positioned underneath the upcoming Model X.

The Model III will carry a starting price of around $35,000 and will be revealed in March 2016 before going on sale sometime in 2017 with a total range of more than 250 miles (402 km), according to company CEO Elon Musk. There's no word about when the crossover will be launched, but Tesla probably won't wait a long time since the crossover/SUV segment is still booming and it makes sense to have a cheaper alternative to the larger Model X.

Gallery: Tesla Model III to spawn crossover

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