Affordable EVs seem to be a nut that no automaker can crack, as every promise of a “sub-$30,000” model or similar has fallen through in favor of higher prices. It now seems that Tesla is following suit, despite repeated promises that it would develop a mass-market EV at a reasonable price. Earlier today, Reuters reported that the automaker had ditched its efforts to develop the car and would look instead at developing autonomous taxis on the platform that would have underpinned it.
CEO Elon Musk has been beating the affordable EV drum for a while, telling investors in January that the car would enter production in Texas as soon as late 2025. The automaker doesn’t have a communications or PR department to respond to inquiries, but Musk posted on X, saying, “Reuters is lying (again).”
The car, which was projected to start in the mid-$20,000 range, would have helped Tesla compete against the increasingly fierce Chinese auto industry. Companies like BYD have built impressive electric vehicle catalogs in recent years, and the automaker has been in a back-and-forth battle with Tesla for the top spot in global markets.
Tesla’s stock, which is more important than the cars for some people, tumbled 3 percent on the Reuters report. The decision was apparently made public, at least internally, in late February, with a source telling Reuters that “Elon’s directive is to go all-in on robotaxi.” Some said they felt optimistic about the call, saying that Musk believes that autonomous people movers are the “future of mobility.”
This course change is surprising and will undoubtedly cause quite a stir, but the truth remains that many automakers are losing serious money on EVs. That makes it exceptionally difficult to be profitable overall and raises questions about affordability for the foreseeable future. Raw materials and manufacturing remain significant financial hurdles to cross, so we’ll just have to wait and see if Elon’s decision is prescient or foolish.
[Image: Tesla]
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