Tesla’s reported decision to abandon plans for a lower-cost electric vehicle (EV) priced around $25,000 marks a significant shift in its strategy, according to Reuters. This vehicle was seen as crucial for the company’s growth trajectory. Instead, Tesla will concentrate its efforts on developing a robotaxi using the same small EV platform intended for the lower-cost model.
Elon Musk, CEO of Tesla, disputed Reuters’ report on his social media platform, X, alleging that it was false. However, he did not offer specific rebuttals to the reported details. Musk’s response included an eyes emoji to a post summarizing the Reuters report.
The development of these two vehicles has been ongoing for several years, with Musk wavering on whether to prioritize a traditional car or a futuristic robotaxi, despite not yet achieving full autonomy in Tesla vehicles.
Tesla 2020 Plan
Musk initially hinted at a budget-friendly Tesla in 2020 but stated in early 2022 that work on the project had ceased due to competing priorities. However, the project was revived shortly thereafter, leading to internal debates within the company about the direction to take.
In a biography by Walter Isaacson, Musk’s preference for a robotaxi over a traditional car with a steering wheel and pedals is highlighted. Despite this, lead designer Franz von Holzhausen and engineering VP Lars Moravy advocated for the traditional car, citing the need for an affordable, small vehicle to meet Musk’s ambitious growth targets. They proposed utilizing the same platform for both models.
Although Musk initially expressed disinterest in the $25,000 car, he eventually agreed to move forward with the plan outlined by his team in early 2023. However, recent reports suggest that work on the traditional car has been halted in favor of focusing on the robotaxi concept.
The change in plans may be attributed to various factors, including Musk’s decision to shift production plans from Mexico to Texas and Tesla’s efforts to remain competitive by reducing prices on its best-selling models, particularly in China.
