According to information from Reuters, Tesla has canceled plans to create a long-awaited low-cost car that investors were counting on to promote the mass car maker. The decision came after reports obtained by Reuters from three sources familiar with the situation and messages from the company. Insiders said the automaker will continue to develop self-driving robotaxis on the same platform for small cars.
The decision marks the abandonment of a long-term goal often stated by Tesla CEO Elon Musk – creation of affordable electric cars for the general public. Musk first announced in 2006 that he would produce luxury models and then use the profits to finance a “cheap family car”.
After the news, Tesla shares fell about 3%. Musk previously promised investors and consumers a similar car. In January, it said it plans to start production of an affordable model at a plant in Texas in the second half of 2025.
Tesla's cheapest model, the Model 3 sedan, costs about $39,000 in the US. The supposed canceled entry-level variant was expected to cost $25,000. Tesla did not respond to requests for comment. After the publication of the article, Musk wrote on his social media that "Reuters is lying again".