Elon Musk shuts down report that Tesla is scrapping its ‘$25,000 Model 2’ electric car

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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

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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