Tesla is discontinuing the $25,000 model, according to Reuters, although Musk claims the news outlet is lying.
Reuters reports that Tesla has abandoned its efforts to produce an electric vehicle (EV) that is within the price range of consumers. Just a few months ago, in January, CEO Elon Musk expressed his “optimistic” outlook regarding the arrival of the low-cost electric vehicle in the second half of the year 2025. be an alternative, it has been rumored that the automobile manufacturer will “go all in” on robotaxis, which Musk has referred to be the transportation of the future.
According to reports, the project codenamed “Redwood” was the entry-level electric vehicle (EV) initiative that was ultimately scrapped. Musk remarked, “We’ll be sleeping on the line” in order to make the manufacturer’s prediction of a weekly production volume of 10,000 vehicles a reality. That prediction had been made by the automaker. Previously, he had asserted that Tesla was in the process of developing two new electric vehicle models that were anticipated to sell up to five million units yearly.
While the CEO has been describing his long-term plan for nearly twenty years, he has stated that he intends to use luxury automobiles to grow Tesla’s brand before leveraging the proceeds from those vehicles to support cheaper ones. In a letter titled “Secret Tesla Motors Master Plan” that was written in 2006, Elon Musk stated that “when someone buys the Tesla Roadster sports car, they are actually helping pay for development of the low cost family car.” Throughout the years that followed, he frequently reiterated such thoughts to prospective clients and investors.
The cancellation would result in the Model 3 sedan, which costs $39,000 and above, remaining Tesla’s most affordable vehicle. The affordable model that was abandoned was anticipated to begin at approximately $25,000 in price.
The news organization was informed about the cancellation in a meeting that took place in late February and was “attended by scores of employees,” according to sources who spoke to Reuters. According to the journal, it examined Tesla’s internal communications regarding the pivot, including one that advised employees to refrain from informing suppliers “about program cancellation.” There were further messages that purportedly instructed employees that “suppliers should halt all further activities related to H422/NV91,” which is a reference to the codenames of the budget model that are used internally and externally.
In response to the news, Musk commented on X (Twitter) on Friday, “Reuters is lying (again)”; nevertheless, he did not cite any grounds of contention in his message.
The company Tesla has a lot of work ahead of it. Not only has the demand for electric vehicles (EVs) decreased in the United States, but the rivalry in China is extremely severe, with the rapidly expanding BYD commanding the entry-level market in China. This month, the Chinese automobile manufacturer announced that its sales had climbed by thirteen percent compared to the previous year. While everything was going on, Tesla said on Tuesday that its deliveries had decreased by eight percent on an annual basis and by twenty percent from the previous quarter.