When a Reuters report broke in April 2024 claiming that Tesla had scrapped its planned $25,000 electric vehicle, investors braced for impact. Minutes after the story hit, Elon Musk took to X to blast the report as false, tweeting: "Reuters is lying."
The post halted a 6% slide in Tesla's shares, which ultimately closed down 3.6% that day. But behind the scenes, senior executives knew the reality: the affordable EV–widely called the Model 2–was dead, with the company refocusing on self-driving robotaxis.
Sources say Tesla leaders, confused by Musk's denial, directly questioned him about the project's fate. Musk reaffirmed the cancellation, insisting the low-cost vehicle plans were over.
That decision may have cost Tesla its edge in the race for mass-market EVs. In April, the Chinese mainland automaker BYD outsold Tesla in Europe for the first time, driven by its Seagull hatchback, which starts under $10,000 at home and competes at double that abroad.
One year on, Tesla has yet to unveil a new budget-friendly model beneath the $42,500 Model 3. The saga underscores the tension between bold innovation bets and the promise of affordable EVs–a core pillar of Tesla's mission.
With rivals closing the price gap and consumer demand shifting, Tesla's next move will be critical. Will the company revive its all-new EV plan, or double down on high-margin, high-tech vehicles? Share your thoughts below.
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Tesla executives questioned Musk over $25K EV denial, sources say
cgtn.com
