Why Tesla’s Affordable EV May Already Be Doomed

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SHANGHAI, CHINA - NOVEMBER 06: People look at a Tesla Model 3 sedan at the Tesla booth during the si...
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The hype for a $25,000 EV from Tesla may be coming to a screeching halt.

A recent report from Reuters dropped the bombshell that Tesla has scrapped plans for its mass-produced affordable EV. According to the report, two sources said they learned of the decision to scrap the project, often referred to as the Model 2, as early as February. Instead, Tesla’s CEO Elon Musk wants to focus solely on a robotaxi EV, according to Reuters.

Musk has already refuted the report on X, but it still casts a lot of doubt on Tesla’s ability to deliver an EV that starts at around $25,000.

Farewell Model 2, we hardly knew ye.


So Much For Going Affordable

There are a couple of reasons for Tesla to cancel plans for its affordable EV. First off, Tesla is likely feeling the pressure coming from overseas EV makers, particularly BYD. It’s hard to compete with the Chinese EV maker’s options like the Seagull that is aggressively priced below $10,000. BYD even took the crown as the world’s top seller of battery-powered EVs at the end of 2023, before relinquishing the title back to Tesla for the first quarter of this year.

Internally, it sounds like Tesla is going to shift its focus to autonomous driving with its next EV, according to the Reuters report. We previously learned that Tesla was working on a next-gen EV platform that would power both a $25,000 model and a robotaxi option, so this news isn’t completely out of the blue, though, it’s still concerning that the latest Reuters report claims that Musk wants to go “all in” on the robotaxi model only.

The Disappointment is Immeasurable

If the Reuters report turns out to be true, that means the cheapest Tesla will likely still be the recently-refreshed Model 3, which starts at $38,990 before any federal tax incentives. While the $25,000 Tesla may be canceled, we still don’t have any indication on how much the robotaxi model will cost. There’s also still a chance that Tesla will pursue a truly affordable model in the future.

For now, it’s just a waiting game to see what Tesla reveals as its next EV. It’s been a real rollercoaster following the so-called Model 2’s journey — fingers crossed this isn’t the end of this anticlimactic ride.

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