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Tesla Abandons Plans for Affordable Model 2
Tesla has decided to discontinue the development of an affordable electric vehicle, the Model 2, as reported by Reuters. Recent messages from the company revealed that the anticipated affordable Model Y, expected to be priced at $25,000 or less, has been canceled.
CEO Elon Musk had long discussed the idea of an affordable Tesla Model 2. The creation of an affordable mass-market electric vehicle was believed to be a fundamental component of the company’s overarching plans. In December 2023, Musk announced that Tesla was developing a “low-cost electric vehicle to be produced at high volumes.” Subsequently, in March of this year, Musk informed Tesla employees that the Model 2 would be manufactured at the company’s facility in Berlin, Germany.
Reasoning Behind the Decision
Despite Musk’s earlier statements, Reuters indicated that one of its sources disclosed that the decision to terminate the Model 2 project was made in late February. Instead, Musk is reportedly shifting focus towards the “robotaxi” initiative. This initiative aims to establish an autonomous driving system that would enable Tesla vehicles to compete with ride-hailing services like Uber and Lyft without the need for a human driver.
Although Tesla has not officially responded to these reports due to the absence of a press office, Musk addressed the situation on social media by casting doubt on Reuters’ credibility. He accused the news outlet of spreading false information.
Challenges Facing Tesla
Recently, Tesla encountered a setback in its delivery performance, marking the lowest delivery figures since 2020. The company experienced an 8.5% decline in year-on-year deliveries, coupled with continued issues of overproduction leading to an excess of nearly 150,000 unsold vehicles.
Looking ahead, Tesla and Musk are bracing for further challenges as the trial concerning the tragic death of Apple engineer Walter Huang unfolds. Huang lost his life in 2018 when his Tesla Model X veered into a highway divider. The trial, set to commence in California next week, is expected to draw significant attention.
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