Tesla is reportedly abandoning its plan to build a lower-cost EV thought to cost around $25,000, according to Reutersdespite this vehicle’s position as a pivotal product for the company’s overall development.
Instead, the company will focus its efforts on a planned robotaxi built on the same small EV platform that would also supposedly power the low-cost vehicle.
Tesla CEO Elon Musk has claimed, without evidence, that Reuters is “lying” in a Position on social media platform X, and did not dispute specific details. He also responded with an eye emoji another post which essentially summarized the Reuters report in different words.
Tesla has reportedly been working on these two vehicles for a few years now. But Musk wavered on whether to prioritize a standard car or one without a steering wheel or pedals, even though he has yet to create a fully autonomous car.
Musk first teased the idea of a truly low-cost Tesla in 2020. But in early 2022, he said Tesla had stopped working on the car because it did he had too much else to do.
That didn’t last long. The project came back, but the company and its CEO were divided on whether it should be a standard car or a futuristic robotaxi.
In Watler Isaacson’s recent biography of Musk, he described the CEO backing down in mid-2022 against the insistence of his engineers to report a car with a steering wheel and pedals. “This vehicle should be designed as a pure robotaxi. We’ll take that risk, it’s my fault if it sticks,” Musk said, according to Isaacson. A few weeks after that, Isaacson said, he reported that Musk said robotaxi would “transform everything” and make Tesla “tens of trillions.” [dollar] Company.”
But even after all that, Isaacson wrote that chief designer Franz von Holzhausen and vice president engineer Lars Moravy kept the more traditional version of the car alive as a “shadow project.” In September 2022, Isaacson wrote, Moravy and von Holzhausen made the pitch to Musk that they needed a cheap, small car to grow to Musk’s stated goal of 50 percent per year. They also unveiled the plan to use the same platform to power both different models.
Musk also said, according to Isaacson, that the $25,000 car wasn’t “really that exciting of a project”—despite the fact that it was the ultimate goal of the famous prototype.Master plan» for Tesla. But by early 2023, Musk had agreed to move forward with the plan his lieutenants had drawn up.
That plan is now in doubt, with Reuters citing internal documents showing that work has stopped on the traditional car project in favor of the robotaxi approach.
Things have changed since Musk agreed to that plan in 2023. Isaacson’s book explains that the reason Musk sought to set up a factory in Mexico had to do with wanting to build both vehicles there. But Musk quickly turned to building the two vehicles in Texas instead. Musk has since told investors that Tesla has backed away from going “full tilt” on developing the Mexico plant, in part because of high interest rates. And Tesla has spent the past year slashing prices on its best-selling models in an effort to stay competitive in China and maintain its huge advantage over competition outside that country.
