Report: Elon Musk Kills Tesla's Cheap Car Project, Again, Denies It
Sources inside Tesla spill the dirt on Elon’s latest pivot away from a rumored $25,000 model.
Will Tesla or won’t Tesla build an affordable vehicle to slot under the compact Tesla Model 3 electric sedan? Since 2020, the answer has been a little unclear. It’s been promised, and then rumored to be canceled, and then revived. Last we heard, in January of this year, the more affordable Tesla was to be built in Austin in late 2025, utilizing a revolutionary new manufacturing process that doesn’t exist yet. It was typical Tesla hyperbole, and even Musk told listeners to the company’s earnings call that his prognostications should be taken “with a grain of salt because I am optimistic.” Now, it seems, any optimism in this smaller Tesla was misplaced.
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Reuters reports that Tesla insiders have confirmed that the smaller Tesla vehicle, rumored to be called the Model C or Model Q (and not the Model 2), has been canceled. The report bases this conclusion on three inside sources and internal messages. But there’s a bit of a twist, too. Musk, the man behind most of Tesla's stillborn plans, went on X, his social media platform, and immediately claimed the Reuters report wasn't true:
Of course, Musk hasn't specified why the Reuters report isn't true. Also, who knows—the cheap Tesla has been so on-again, off-again, we suppose you can never truly say "never."
Anyway, the platform the small Tesla would have been built off of, which required the complex tooling that hasn’t been created yet, will apparently live on … as a robotaxi. While the new manufacturing process seems to have been intended to lower production costs and create a profitable volume vehicle, instead the platform will underpin a smaller number of robotaxi vehicles, according to the report.
This may raise eyebrows considering the scrutiny of, and investigations into, the company’s Autopilot and Full Self Driving driver assistance systems, which have been linked to high-profile fatal crashes and incidents involving emergency response vehicles.
The report comes as Tesla’s most recent sales report (specifically, the 8.5 percent decline in first-quarter sales figures) brought sobering news for investors, and as the company slashed prices further on some of its models piling up in inventory. As Automotive News notes, the bottleneck here is a lack of consumer demand for the company’s vehicles, not a supplier or production issue.
Like a lot of the other staffers here, Alex Kierstein took the hard way to get to car writing. Although he always loved cars, he wasn’t sure a career in automotive media could possibly pan out. So, after an undergraduate degree in English at the University of Washington, he headed to law school. To be clear, it sucked. After a lot of false starts, and with little else to lose, he got a job at Turn 10 Studios supporting the Forza 4 and Forza Horizon 1 launches. The friendships made there led to a job at a major automotive publication in Michigan, and after a few years to MotorTrend. He lives in the Seattle area with a small but scruffy fleet of great vehicles, including a V-8 4Runner and a C5 Corvette, and he also dabbles in scruffy vintage watches and film cameras.
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