Tesla has made the surprising decision to abandon plans for a low-cost electric car, instead focusing on the development of autonomous robot taxis. This shift marks a departure from Tesla’s long-standing goal of creating an accessible electric car, a mission that founder Elon Musk had emphasized was at the heart of the company.
Musk had previously promised investors and consumers that Tesla would produce an affordable model, with plans to begin production in the second half of 2025 with a starting price of around $25,000. However, with increased competition from Chinese electric vehicle manufacturers who are flooding the market with affordable cars priced as low as ten thousand dollars, Tesla has decided to focus on its more profitable line of business – autonomous vehicles.
The cancellation of the affordable car project has had repercussions on Tesla’s stock prices, with shares falling after the news broke. Musk disputed the report on social media but did not provide further elaboration. The decision to abandon the affordable car project comes amidst a challenging market landscape for electric vehicles, with slowing demand in the US and Europe and increasing competition in China.
Analysts attribute the delay in Tesla’s affordable car development to Musk’s decision to prioritize the production of the Cybertruck over a mass-market vehicle. The Cybertruck, a highly experimental electric truck, was introduced in 2019 with an initial price prediction of around $40,000. However, delays in production and manufacturing issues have pushed the release date of the lower-priced version to around 2025, now priced at $61,000.
In contrast, Chinese automaker BYD has experienced significant growth in electric vehicle sales, offering a range of low- and mid-range models at competitive prices. The company’s success in the electric vehicle market in China poses a significant challenge to Tesla’s plans for a low-cost car. Despite Tesla’s decision to cancel the development of a mass-market electric car,
