Tesla has announced a shocking decision to scrap the development of a low-cost electric car, a move that investors had been eagerly anticipating. This decision comes at a time when Tesla is facing increased competition from Chinese electric vehicle manufacturers who are flooding the market with affordable cars priced as low as ten thousand dollars.
Instead of pursuing the development of an affordable electric car, Tesla will now focus on the advancement of autonomous robot taxis. This strategic shift marks a departure from Tesla’s longstanding goal of creating an accessible electric car, a mission that its founder, Elon Musk, had often emphasized is at the core of the company. Musk had previously promised investors and consumers that Tesla would produce an affordable model, with plans to begin production in the second half of 2025 with a starting price of around $25,000.
The cancellation of the affordable car project has had repercussions on Tesla’s stock prices, with shares falling after the news broke. Musk disputed the report on social media but did not provide further elaboration. The decision to abandon the affordable car project comes amidst a challenging market landscape for electric vehicles, with slowing demand in the US and Europe and increasing competition in China.
Analysts attribute the delay in Tesla’s affordable car development to Musk’s decision to prioritize the production of the Cybertruck over a mass-market vehicle. The Cybertruck, a highly experimental electric truck, was introduced in 2019 with an initial price prediction of around $40,000. However, delays in production and manufacturing issues have pushed the release date of the lower-priced version to around 2025, now priced at $61,000.
In contrast, Chinese automaker BYD has experienced significant growth in electric vehicle sales, offering a range of low- and mid-range models at competitive prices. The company’s success in the electric vehicle market in China poses a significant challenge to Tesla’s plans for an affordable car. Despite Tesla’s decision to cancel its development project for an affordable mass-market electric car
