Cheap Tesla Model 2 EV in doubt
Musk claims Reuters is ‘lying’ after newswire reports that plans for entry-level Tesla EV have been scrappedTesla has reportedly cancelled plans to produce a cheap entry-level Tesla Model 2, with US newswire Reuters claiming the EV giant has been forced to make a radical change in strategy behind the scenes.
According to Reuters, Tesla will now focus its resources on continuing to develop self-driving robotaxis that will be built on the platform that was originally set to underpin the Model 2.
Developed as a low-cost electric car for the masses, the Model 2 – a nameplate that hadn’t been confirmed – was expected to enter production at the company’s Texas plant in the second half of 2025, positioned below the Model 3 at a price of around $US25,000 ($A38,000).
Reuters is lying (again)
— Elon Musk (@elonmusk) April 5, 2024
Reuters said the decision to cancel the Model 2 was made in late February, citing multiple sources who confirmed the move that was apparently based on economic conditions.
Engineering staff have reportedly also contacted suppliers about the program’s cancellation, informing them to hold off on any further investments.
Musk has hit back at Reuters on X (Twitter), saying “Reuters is lying (again)” and following up with “Reuters is lying because Reuters in dying” – the latter shown with figures that purportedly show a turndown in website traffic for the newswire.
However, the outspoken CEO did not identify any inaccuracies in the story.
Instead, Musk went on to say “Tesla Robotaxi unveil on 8/8”.
Pundits suggest increased competition and an ongoing price war in China are contributing factors behind the claimed axing of the entry-level Tesla EV at such a late stage of development, making it difficult for the model to achieve sustainable profit margins.
But without it, Tesla’s wildly ambitious sales target of delivering 20 million vehicles a year by 2030 – twice the volume Toyota currently shifts annually – would be cast into doubt.
The forthcoming robotaxi will be produced in much lower volumes than the Model 2 on account of its higher price.
No timeline has been provided on when the fully autonomous small car will reach production, but the August 8 unveiling will shed more light on the program.
Related: Entry-level Tesla Model 2 targets $35,000 start price
Related: Tesla Model 2 coming in 2025
Related: Tesla says one million robotaxis will be on roads next year
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