- Tesla scraps plans for $25,000 electric vehicle: Elon Musk’s company has reportedly abandoned its much-anticipated Model 2, designed to be a more affordable electric vehicle, in favor of focusing on a new robotaxi platform.
- Shift in strategy towards robotaxi development: Musk’s decision to prioritize the development of a robotaxi marks a strategic shift for Tesla, aiming to revolutionize car ownership with fully autonomous vehicles rather than pursuing the production of a budget-friendly EV.
- Increasing competition from Chinese automakers: Tesla’s move comes amidst rising pressure from Chinese automakers in the affordable EV market. Musk views these competitors as a significant threat to domestic manufacturers, prompting a reevaluation of Tesla’s product lineup and strategic priorities.
Reports indicate that Tesla has abandoned its plans to produce a more affordable $25,000 electric vehicle, dubbed the ‘Model 2’. Instead, Elon Musk has redirected focus towards a new robotaxi platform.
Elon Musk reportedly scrapped the idea of the Tesla Model 2 during an internal meeting in late February, opting to prioritize the development of a robotaxi, as per Reuters and sources familiar with the matter.
For years, Musk had been promising an electric vehicle priced around $25,000 to broaden the accessibility of electric cars. Initially mentioned in a 2018 interview, Musk envisioned producing millions of these vehicles annually by 2020. The plan was to base the more affordable EV on Tesla’s next-generation platform, with production aimed for late 2025, albeit with potential delays due to manufacturing complexities.
Tesla, while not responding directly to Reuters, dismissed the claims as misinformation. This strategic shift coincides with increased competition from Chinese automakers in the affordable EV market, which Musk sees as a threat to domestic manufacturers.
Despite Tesla’s focus on its high-end Cybertruck, it has been surpassed in production volume by China’s BYD. Earlier indications suggested Tesla might introduce an electric crossover vehicle in mid-2025, potentially serving as the anticipated affordable option for the mass market.
In addition to the shelved affordable EV, Musk has been championing the development of a Tesla robotaxi, aiming for full autonomy to redefine car ownership. Plans for such a vehicle, speculated to sport a futuristic design akin to the Cybertruck, have been mentioned in Musk’s interviews and biographies, overshadowing the feasibility of the affordable EV in a fully autonomous future.
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