Tesla appears to be changing course on its goal of producing a more affordable electric vehicle (EV), according to a Reuters report. The report, citing anonymous sources and internal documents, claims Tesla has scrapped plans for a $25,000 electric car and will instead prioritize development of a robotaxi.
This decision marks a significant shift for Tesla. Making electric vehicles more accessible to the masses has long been a core part of the company’s mission. Elon Musk, Tesla’s CEO, outlined this vision in his 2006 “Master Plan,” which emphasized initial production of luxury models to fund the development of a “low cost family car.”
The Reuters report states that Tesla will dedicate resources originally intended for the low-cost EV to its robotaxi project. This robotaxi would utilize the same compact EV platform that was planned for the affordable car. Interestingly, Elon Musk has taken to his social media platform to dispute the Reuters report, calling it a “lie.” However, he hasn’t provided any specific details to contradict the reported shift in focus.
This news comes after years of back-and-forth regarding the low-cost EV. While the concept was first introduced in 2020, development was reportedly halted in 2022 due to internal conflicts over resource allocation. Though the project was later revived, it seems Tesla’s leadership couldn’t agree on whether to prioritize a traditional car design or a robotaxi concept.
Tesla’s decision to prioritize the robotaxi over the low-cost EV could have significant ramifications for the electric vehicle market. A more affordable Tesla could have accelerated widespread EV adoption, but the focus on autonomous vehicles suggests Tesla may be placing a bigger bet on the future of self-driving cars. Only time will tell if this gamble pays off.