Elon Musk has long said that the holy grail of popularizing electric vehicles came from Tesla, with a car that would cost as little as $20,000.
This dream now seems dead. Reuters reports that Tesla has canceled its plans for a low-cost car.
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The cheap, inexpensive car has been promised by Musk for years and investors were counting on it to drive mass adoption of the brand. Instead, the company will focus on developing autonomous robo-taxis.
The dream of “affordable electric cars for the masses” was Tesla’s guiding light, Musk said. As early as 2006, he said the “master plan” was to build luxury cars first, then generate profits to fund a low-cost family. car.
However, it appears that this market has instead been hijacked by Chinese automakers.
As recently as January, he said production of the car would begin in the second half of 2025 in Texas and that Mexico had already been cited as a project to build cheap cars. However, projects in Mexico have recently appeared to have stalled.
Worse, Tesla shares plunged earlier this week, with reported first-quarter deliveries coming in at 387,000, compared to estimates of 433,000. This represents a drop of 8% over one year.
The report states that employees first heard the news in late February and that Musk’s directive was to go all-in on the robotaxi. However, just this week it was revealed that Tesla’s lead AI engineer had left the company.
The good news is that the latest reviews of the updated “fully autonomous” Tesla technology have been positive.
Tesla shares are down more than 5% in this report and, given the latest rise in Facebook shares, this will push Elon Musk’s net worth below Mark Zuckerberg and to 4th on the list .
Elon Musk did not respond directly to the report, but posted it on Twitter.
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