Tesla reportedly scraps affordable EV plans

Reuters reported on Friday that Tesla has canceled its much talked about affordable EV, but will continue to develop an autonomous vehicle based on the same platform.

Two sources told Reuters that they learned of the decision to abandon the affordable EV, believed to be a crossover targeting a base price of $25,000, at a large meeting said to have taken place in late February. According to the source, Tesla CEO Elon Musk told Tesla to "throw all its energy into robot cabs."

A third source also told Reuters that the affordable Tesla EV has been canceled, adding that the automaker now plans to produce autonomous robo-taxis in much smaller quantities than had been expected for the affordable crossover.

Reuters also reported that an internal Tesla message from an unnamed manager dated March 1 referred to the decision to cancel the entry model, discussing the discontinuation of the entry model with engineering staff and telling suppliers "about the program cancellation." He reportedly advised them to refrain from communicating.

The report was heavily edited after its initial publication and included a reference to Mask's post on social media site X accusing Reuters of lying.

Reuters speculated that Musk's delay in committing to an entry-level model made it more difficult to launch an entry-level model due to increased competition from Chinese automakers. While Tesla worked to launch its cybertruck and Musk focused on other projects, the Chinese automaker doubled down on affordable models, taking share in China and Europe and weakening the business case for the low-margin $25,000 EV, Reuters reasoned.

Musk said that in 2020, Tesla's next-generation platform will enable $25,000 EVs. And just earlier this year, Reuters reported that Tesla had told suppliers that it wanted to start producing vehicles based on this next-generation platform in 2025.