American automobile maker Tesla Inc. is still on tracks to make less-expensive electric cars, the company’s Chief Executive Officer Elon Musk said, while vehemently refuting a report suggesting the cancellation of the much-anticipated vehicle.
Reuters is lying (again)
— Elon Musk (@elonmusk) April 5, 2024
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The report in question from Reuters cited anonymous sources and internal company messages, indicating Tesla’s abandonment of plans for a budget-friendly vehicle, which many believed would be priced around $25,000. This is considerably lower than the current Tesla Model 3’s starting price of about $40,000. The company was reported to scrap the cheaper EV, sometimes referred to as the Model 2, in favor of focusing on self-driving robotaxis.
Tesla shares plunged over 6% on Friday following the report. However, Musk’s denial pushed the stock to partially recover from its earlier losses.
Musk had previously teased the possibility of a $25,000 model during a battery-related event in September 2020, underscoring Tesla’s ambition to make electric vehicles more accessible to the mass market. The company’s failure to deliver on this promise within the projected timeline has raised concerns among investors, especially in light of Tesla’s recent drop in quarterly vehicle deliveries and increasing competition in markets like China.
Companies like BYD offer a wide range of affordable electric vehicles, capturing significant market share with aggressive pricing strategies. Tesla, meanwhile, has been slow to adapt, focusing on the high-end Cybertruck which has faced production delays and rising costs.
Additionally, speculations about the cancellation of the affordable car project have stirred debates over Tesla’s priorities, particularly in light of Musk’s emphasis on advancing self-driving technology and the development of robotaxis. While Musk has repeatedly touted the potential of autonomous vehicles and their role in the company’s future, concerns persist regarding the readiness of such technology and its regulatory approval for widespread use. Meanwhile, investors await Tesla’s next earnings release scheduled for April 23.
