Elon Musk has shut down a report that Tesla is scrapping its ‘$25,000 Model 2’ electric car in favor of its ‘Robotaxi’.
For the past few years, Tesla has been developing a next-generation vehicle platform that is going to enable the launch of two new vehicles: a smaller and cheaper vehicle, sometimes referred to as ‘Model 2’, and a dedicated self-driving vehicle, which Musk calls “Robotaxi”.
Now, Reuters reports that Tesla has scrapped plans for the former:
Tesla has canceled the long-promised inexpensive car that investors have been counting on to drive its growth into a mass-market automaker, according to three sources familiar with the matter and company messages seen by Reuters.
Musk quickly denied the report – saying that “Reuters is lying”:
However, Musk did respond to a post, seemingly in agreement, suggesting that Tesla might have shifted focus on the “Robotaxi” rather than the “$25,000 car”.
The Reuters report did note that Tesla “will continue developing self-driving robotaxis on the same small-vehicle platform.”
Musk previously said that Tesla plans to unveil its next-gen electric vehicles toward the end of the year and launch production toward the end of 2025.
Tesla is currently building its new production systems for the next-generation at its Gigafactory Texas facility in Austin.
Electrek’s Take
Top comment by Aaron
This has been semi-obvious for a while now.
It's pretty clear that Musk went all in on Cybertruck and FSD, and completely lost sight on the market. (Note: An extreme social media addiction might also be at play). During that time, a number of manufactures targeting low cost models (e.g., BYD, Kia, Hyundai) all went all-in on developing low-cost platforms.
Although he alluded to it during conference calls...the Model 2 made no sense after spending so much time on Cybertruck. Think about it...Tesla has never gone from concept to volume production in less than 5 years. Even if they unveiled a concept sometime during 2024...we are realistically looking at 2027-2030 before volume production. By that time BYD, Kia, etc. will have basically claimed this space.
Keep wishing people...but the writing has been on the wall since Musk decided to pursue a 100K influencer focused truck.
From a strategic standpoint, this made no sense to me. Tesla 100% needs a cheaper vehicle in order to expand its volumes.
I didn’t believe the report after it first came out, especially since I’ve seen a lot of real issues with Reuters’s Tesla reporting in the past. We even caught them sneakily back editing a post to make it look like Elon lied about calling out their reporting. I wrote a thread about it:
That said, it does sound like there’s something to the report, with at least Tesla prioritizing the robotaxi over the cheaper vehicle based on Elon’s follow-up reaction to the suggestion.
I know it’s not a reason for bad reporting, but if Tesla had a PR department, it could avoid issues like that.
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