Report says Tesla canceled its $25,000 Model 2, Elon Musk denies

06 April 2024

Earlier today, Reuters came out with a report claiming that Tesla canceled its "low-cost car" plans - this $25,000 or thereabouts EV has long been referred to as the Model 2. This information apparently came from three separate sources, which claimed that, instead of building its cheapest EV yet, Tesla would focus on self-driving taxis. There is, however, a pretty significant plot twist coming.

The taxis are being developed on the same platform that the Model 2 would have used, which means this doesn't make a lot of sense. If the platform is still being developed (for the taxis), why not use it for the Model 2 as well? The cost of development is already spent.

While Tesla itself did not respond to Reuters' requests for comment, Elon Musk said "Reuters is lying (again)" in a post on X which you can see below. We can thus definitely rule him out as one of those three sources for the story.

Musk has told Tesla investors back in January that the affordable model (that he isn't but we are calling Model 2) would be commencing production at the Gigafactory Texas in the second half of next year.

Tesla stocks fell 6% following the initial report but recovered some of the loss after Musk's post. A lot of people betting on that dip (and a strong response against the report form Musk) made a lot of money today, and it wouldn't surprise us if the three sources for the aforementioned report were among them.