Tesla ditches cheap electric car plan, shifts to robotaxis

Tesla has made a surprising about-face, cancelling its plans for a long-awaited affordable electric car and instead pouring resources into developing self-driving robotaxis, according to a Reuters report. Now the future of electric mobility just got a whole lot more interesting!
The scrapped vehicle, often referred to as the "Model 2," was intended to be a $25,000 entry point for budget-conscious consumers and a key driver of Tesla's growth into the mass market. However, the company now cites fierce competition from established Chinese automakers offering a range of affordable EVs as the reason for abandoning the project.

This strategic shift marks a significant change of course for Tesla. CEO Elon Musk has long championed the idea of an affordable electric car, even calling it a core mission of the company. His original "master plan" envisioned using profits from luxury models to finance the development of a "low cost family car."

Despite Musk's repeated promises, the affordable car project has faced numerous delays. In January, Reuters reported on Tesla's plans to begin production in the latter half of 2025, only to be contradicted by this recent announcement.

While details remain murky, Tesla seems to be betting big on robotaxis, a technology with the potential to revolutionize transportation. However, this path is fraught with challenges. Regulatory approval and the complexity of autonomous driving technology pose significant hurdles. Furthermore, Tesla faces competition in the robotaxi space as well.

This news comes amidst a period of scrutiny for Tesla. Musk's involvement in various ventures like SpaceX and Twitter has raised questions about his focus on Tesla. Additionally, the company's ambitious sales targets seem less achievable without the affordable car to drive volume.

Tesla's stock price initially dipped on the news but recovered somewhat after Musk refuted the report on social media. He even announced an upcoming "Tesla Robotaxi unveil" on August 8, further emphasizing the company's new direction.