Tesla recently announced that it has decided to abandon the development of a low-cost electric car, disappointing investors who had hoped that this would help the company become a mass-market carmaker. This change in direction comes as Tesla faces increasing competition from Chinese electric vehicle manufacturers selling cars for as little as ten thousand dollars. Instead of focusing on the affordable car, Tesla will continue to develop autonomous robot taxis.
This decision marks a significant shift from Tesla’s original goal of creating an accessible vehicle, something that founder Elon Musk often referred to as the company’s mission. Since 2006, Musk has promised investors and consumers that Tesla would produce an affordable family electric car. However, the company recently announced that it will no longer pursue this goal, despite Musk’s previous assurances that production of an affordable model would begin in the second half of 2025.
The cancellation of the low-cost car project has had an impact on Tesla’s stock value, with shares falling more than six percent after the news broke. Musk took to social media to dispute the reports, calling them lies, but did not provide any further clarification. This decision comes at a challenging time for Tesla and other automakers, as demand for electric vehicles in the United States and Europe begins to slow and competition in China intensifies.
Analysts believe that Tesla’s delay in developing an affordable car is partly due to Musk’s decision to prioritize the Cybertruck over the low-cost model after the successful launch of the Model Y crossover. The Cybertruck, which was first unveiled in 2019, is now expected to be available at a starting price of $61,000 in 2025, significantly higher than originally anticipated. This delay, coupled with manufacturing challenges related to innovative battery technology, has put Tesla at a disadvantage compared to Chinese companies like BYD, who have seen significant success in the electric vehicle market.
However, some experts predict that this setback may only be temporary for Tesla as they continue their efforts towards autonomous driving technology which could change everything about transportation and make it more efficient and safer.
In conclusion, Tesla’s decision to abandon its plans for a low-cost electric car has been met with disappointment by investors hoping for mass market growth potential but also highlights how competitive and fast-paced
