Tesla has scrapped plans to produce a low-cost electric vehicle (EV). according to Reuters. CEO Elon Musk said he was “optimistic” back in January the low-cost EV will arrive in the second half of 2025. Automaker to ‘go all in’ instead robotaxisMusk described it as the future of transportation.
The canceled entry-level EV project – often referred to as the ‘Model 2’ – was reportedly codenamed ‘Redwood’. There was a car manufacturer predicted the weekly production volume to be 10,000 cars, and Musk said, “We’re going to sleep on the line” to make it happen. He previously claimed that Tesla is working on two new EV models that are expected to sell up to five million units a year.
For nearly two decades, the CEO has described his long-term goal as using luxury cars to build the Tesla brand before using those profits to fund budget models. “When someone buys a Tesla Roadster sports car, they’re actually helping to pay for the development of a low-cost family car,” Musk said. he wrote In the 2006 “Secret Tesla Motors Master Plan” memo. In the years that followed, he often repeated these ideas to clients and investors.
Cancellation will leave $39,000 and up Model 3 sedan As Tesla’s cheapest car. The canceled budget model was expected to start at around $25,000.
Reuters‘ sources said they were informed of the cancellation at a meeting in late February “in which a large number of employees attended”. The publication says it has reviewed Tesla’s internal messages about the pivot, including one that advised a staff member not to inform suppliers of the “program cancellation.” Other messages allegedly told staff that “suppliers should cease all further activity on the H422/NV91,” referring to the external and internal codenames of the budget model.
Musk placed On Friday X (Twitter), “Reuters lies (again)” in response to the story – without listing any points of contention.
Tesla has its work cut out for it. Not only that Demand for EVs has slowed In the US, but in China, the competition is fierce fast growing BYD leading the country’s entry-level market. Chinese car manufacturer he said earlier this month, its sales were up 13 percent year over year. Meanwhile, Tesla said on Tuesday that its deliveries were down eight percent year over year decreased by 20 percent compared to the previous quarter.
