Tesla scraps plans to build the cheaper Model 2

Tesla is reportedly shifting its focus away from building a lower-cost electric vehicle (EV), priced around $25,000, according to Reuters. This vehicle, previously seen as crucial for the company’s overall growth, is being sidelined in favour of prioritizing the development of a planned robotaxi, which shares the same small EV platform intended for the lower-cost vehicle.

Read: Microsoft claims it’s made a massive leap in quantum computing

Tesla CEO Elon Musk refuted Reuters’ claim, alleging the news outlet of misinformation without addressing specific details. Additionally, Musk responded to another post summarizing the Reuters report with an eyes emoji.

Reports suggest that Tesla has been working on both vehicles for several years, but Musk has been indecisive regarding whether to prioritize a conventional car or a futuristic robotaxi, despite lacking a fully autonomous car.

The concept of a low-cost Tesla was initially teased by Musk in 2020. However, by early 2022, Musk announced that work on the project had been halted due to competing priorities within the company.

Despite this setback, the project resumed, but internal disagreements arose regarding whether the vehicle should be a conventional car or a robotaxi.

In a biography by Walter Isaacson, Musk is quoted as advocating for a robotaxi design, expressing willingness to take the risk if it fails. However, lead designer Franz von Holzhausen and engineering VP Lars Moravy continued to advocate for a more traditional car design, citing the need for an affordable, small car to achieve Musk’s growth targets.

Ultimately, Musk agreed to move forward with a plan that would utilize the same platform for both vehicle models. However, recent reports suggest that work on the traditional car project has been halted in favour of the robotaxi approach.

Since agreeing to this plan there have been shifts in Tesla’s strategies, including changes in manufacturing locations and pricing adjustments for its models. These shifts reflect Tesla’s ongoing efforts to adapt to market dynamics and maintain its competitive edge.