REUTERS) Tesla Focuses On Developing Self-Driving Robot Shafts in Model 2 Development Climate

Tesla canceled its long-promised affordable car (Model 2) to drive its growth as a mass market carmaker, according to three sources familiar with the matter and a company message seen by Reuters.

The carmaker will continue to develop autonomous robo-taxi on the same compact car platform, the sources said.
The decision marks Tesla CEO Elon Musk’s abandonment of his long-held goal of affordable electric vehicles for the public. In 2006, he said in his first “master plan” for the company that he would first produce luxury models and then fund “cheap family cars” with those profits.

Since then, he has repeatedly promised investors and consumers that he would make such vehicles. In January, Musk recently told investors that Tesla plans to start producing affordable models at its Texas plant in the second half of 2025, following an exclusive Reuters report detailing such plans.

Currently, Tesla’s cheapest Model 3 sedan is on sale in the U.S. for about $39,000. The Model 2, now a defunct entry-level vehicle, was expected to start at about $25,000.
Tesla did not respond to a request for comment.
The dramatic turnaround comes as Tesla faces fierce competition worldwide as Chinese EV makers enter the market for less than $10,000. Plans for driverless robotaxi, which could take longer to deliver, carry more challenging engineering challenges and more regulatory risks.
Two sources said they learned of Tesla’s decision to ditch the Model 2 during a meeting attended by numerous employees, one of whom said the meeting took place in late February.

“Elon’s instruction was to go all-in on the robotaxi,” the official said.

A third source confirmed the cancellation and said the robo-taxi would be produced under the new plan, but much smaller than expected for the Model 2.