Reuters reported that Tesla has scrapped plans for its inexpensive car, which was expected to drive sales growth. Elon Musk dismissed the report as false, accusing Reuters of lying. Anonymous sources revealed the cancellation decision, claiming to have learned of it in a late February meeting.
The sources indicated that Tesla would focus instead on developing self-driving robotaxis using the same small-vehicle platform, abandoning the goal of producing affordable electric cars—a mission Musk had emphasized. Tesla’s original plan from 2006 outlined the production of a luxury model followed by a more affordable family car.
Elon Musk (Credits: Quartz)
Musk criticized Reuters, alleging the news outlet’s decline. Reuters countered, accusing Musk of repeatedly promising an affordable vehicle to investors and consumers. Earlier reports suggested Tesla would mass-produce a compact crossover named “Redwood” starting in 2025, priced around $25,000, to meet the demand for affordable EVs.
Currently, Tesla’s cheapest model costs nearly $40,000. Reuters claimed initial production of the canceled model was planned at 10,000 units per week. The news outlet cited company messages from an unnamed program manager discussing the project’s cancellation with engineering staff and instructing attendees not to inform suppliers.
The conflicting reports raise questions about Tesla’s future product strategies and its commitment to making electric vehicles accessible to a broader market.
