Tesla Is Killing Its $25,000 Car Project, Report Says

Tesla has pulled the plug on plans to introduce a low-cost model, touted to start at $25,000, insider sources have told Reuters.

The outlet reported that Tesla will continue developing the platform, but for use as a self-driving taxi, rather than a consumer model.

“Elon’s directive is to go all in on robotaxi,” a source said.

Reuters spoke with several people familiar with the matter and said that it has seen internal messages regarding the topic.

TESLA IS NOT A LUXURY BRAND ANYMORE

During the company’s last earnings call, Musk said that the vehicle would first be built at its Austin, Tex., factory in late 2025 instead of a new factory that has been proposed for it in Monterrey, Mexico, using what Tesla is calling a revolutionary new manufacturing process.

Tesla did not respond to a request for comment on the report, but Elon Musk posted to X that “Reuters is dying,” with a post from another user that said “Reuters is lying because Reuters is dying” that included a graphic showing a drop in traffic to the Reuters website.

Musk had previously warned that low-priced electric cars from China are posing a threat to the global electric car industry.

Members of the project’s staff were reportedly told by a manager that “suppliers should halt all further activities” related to it and that they should document the work that they had done so far.

THE TESLA MODEL Y WAS THE WORLDS BEST-SELLING CAR IN 2023 WITH 1.2 MILLION DELIVERED

Musk has been touting the potential of a robotaxi to boost Tesla’s value for years, but has not yet trailed it in the real world, while several brands like Waymo and Cruise have put such vehicles into operation.

In March, Musk announced that all Tesla owners with cars compatible with the $12,000 Full Self-Driving feature would be offered a free month-long trial.