Elon Musk has long said that the holy grail of popularizing EVs was coming from Tesla with a car that would cost as little as $20,000.
That dream now appears to be dead. Reuters reports that Tesla has cancelled plans for a low cost car.
Shares of Tesla are down 3% and slumping as the report crosses.
TSLA short term chart
The low-cost inexpensive car has been promised by Musk for years and was counted on by investors to drive mass-market adoption of the brand. Instead, the company will focus on developing self-driving robotaxis.
The dream of ‘affordable electric cars for the masses’ was the guiding light of Tesla, Musk has said.As far back as 2006 he said the ‘master plan’ was to build luxury cars first then us profits to finance a low-cost family car.
However it appears that market has been cracked by Chinese automakers instead.
As recently as January, he said production on the car would start in H2 2025 in Texas and previously Mexico was cited as plan to build cheap cars. However plans in Mexico have recently appered stalled.
Worse, shares of Tesla plunged earlier this week as Q1 reported deliveries were 387,000 compared to the 433,000 estimate. That’s an 8% year-over-year decline.
The report says employees first learned the news in late February and that Musk’s directive was to go all-in on the robotaxi. However just this week it was revealed that Tesla’s top AI engineer had left the company.
The good news is that the latest reviews of updated Tesla “full self-driving” technology have been positive.
Shares of Tesla are down more than 5% on this report and given the latest bump in Facebook shares, this will drop Elon Musk’s net worth below Mark Zuckerberg and to #4 on the list.