“Possibly in Europe it would make sense to do, I guess, a compact car, perhaps a hatchback or something like that,” Musk told a European online conference on batteries hosted by the German government, as reported by Reuters.
“In the U.S., the cars tend to be bigger for personal-taste reasons,” he said. “In Europe, (they) tend to be smaller.”
Shares of the Palo Alto, Calif., company at last check were down 1.8% to $545.50.
On Tuesday shares of Tesla reached a market valuation of $500 billion for the first time.
Tesla's share price has surged in the recent past, driven by its approaching inclusion in the S&P 500 index. Tesla will join the index on Dec. 21.
Musk has been one of the biggest beneficiaries of the stock's rise. Musk's net worth jumped $7.2 billion on Monday, giving him an estimated worth of $127.9 billion.
In October, Tesla reported Q3 revenue of $8.77 billion (up 39% annually) and non-GAAP earnings of 76 cents a share. Those numbers beat the FactSet consensus estimates of $8.28 billion and 56 cents.
Tesla received an upgrade from Wedbush Securities’ Daniel Ives, who lifted his one-year price target to $560 from $500 and said his new bull case is $1,000, up from $800.
TheStreet Founder Jim Cramer said Tesla has the possibility of being a major technology company that also makes cars.
"I think there is a lot of things under the hood of Tesla that are very positive," Cramer said.
"Wall Street has decided to get on board with Tesla. There seems to be very little notion that it matters exactly what price and what market cap the company has. It just doesn't matter.
"It's one of those situations where ... everyone is just behind a stock and no one wants to sell it. So, it goes higher until it finds some level that brings out sellers."
On Nov. 2 Musk said Tesla would unveil its updated Cybertruck design in "a month or so."