Tesla is modifying its plans to build an inexpensive EV and instead using the platform to roll out self-driving vehicles, according to an exclusive report by Reuters.
Citing three unnamed sources, the so-called Model 2 was to be introduced later next year at a starting price of around $25,000, according to Reuters. Currently, the lowest cost Tesla vehicle, the Model 3, has a starting price of $39,000.
Following the report, Elon Musk, founder and CEO of Tesla, posted on X (formerly Twitter) that “Reuters is lying (again).” But soon after, Musk posted Tesla’s robotaxi would be unveiled on “8/8.”
The apparent cancellation of the Model 2 comes at a time when China’s auto market has ramped up production of inexpensive EVs and has too much capacity. In turn, Chinese automakers have reportedly been exploring sites in Mexico to build small EVs for the U.S. market.
Overall, EV sales in the U.S. have slowed in recent months due to high prices, the lack of a reliable public charging network, range anxiety, and other factors. General Motors Co. and Ford Motor Co. both have lowered their EV forecasts in recent weeks and instead have boosted production of hybrid vehicles.
The average price of an EV was $55,353 in January. The average price for a luxury vehicle was $60,978, while non-luxury brand vehicles came in at $44,052, according to Kelley Blue Book and Cox Automotive.
Apart from higher prices for EVs, which have far fewer parts than a traditional car or truck, the biggest sticking point for mass consumer acceptance of electric vehicles is the lack of public chargers.
According to multiple reports, the Biden administration’s $7.5-billion plan to build out a network of fast chargers has been painfully slow — 7 open charging stations have been installed over the last two years (collectively 38 chargers).
The Reuter report was written by Hyunjoo Jin, Norihiko Shirouzu, and Ben Klayman, and can be accessed here.
