Tesla cancels its plan to build a smaller, cheaper electric car: report

Tesla’s smaller, cheaper car appears to be back on the list.

today, Reuters It is reported The electric automaker is calling on suppliers about building an all-new electric SUV — meaning not based on the Model 3 or Model Y — that will be more affordable than its current lineup. The report, which is based on four anonymous sources, said the car will first be manufactured in China, before eventually being released to the American and European markets.

If true, it would represent a very big reversal for Tesla, especially for Elon Musk, who has insisted over the past few years that the company doesn’t need to make an affordable electric car — calling that endeavor “nonsense” — because all cars in the future will be self-driving. In 2024, Musk reportedly canceled Tesla’s plans to build a $25,000 electric carbelieved to be called Model 2, in order to focus on developing humanoid robots and robots. The decision was a counter to Musk’s previous promise to build a cheaper model to help accelerate the transition to electric vehicles.

But Musk’s AI plans have faced more than a few hurdles. He insisted that by the end of 2025, Tesla would have robotaxis in markets covering 50% of the US population – a claim that turned out to be true. Violently outside the norm. Tesla’s robotaxis are still available in only one city: Austin. And the vehicles still Under supervision By an employee sitting in either the driver’s seat or front passenger seat with access to a ‘kill switch’ in case anything goes wrong. (There were some unsupervised testsbut it is not clear how many there are.)

After Tesla canceled the Model 2, it focused on its launch The Model 3 and Model Y versions have been stripped down. They were designed to be 20% cheaper to produce than their updated models, but they were also not the affordable vehicles that Musk had promised for years.

It remains to be seen whether these new models will fit the bill more accurately. Tesla could certainly benefit from the sales jolt that could come from an affordable electric vehicle. The company is still suffering from the loss of the tax break for electric cars, in addition to Musk’s right-wing policies and support for the Trump administration. Customer delivery in The first quarter of this year It was up from the previous year, but down 14 percent compared to the previous quarter.

Another lingering question is whether the new car deviates from Tesla’s new mission to produce self-driving vehicles. According to Reuters’ sources, the company may be trying to have it both ways: a self-driving vehicle that could also be driven by humans.

Again, this would be a huge departure from what Musk has been saying for the past few years. The company is currently ramping up production of the two-seat, non-steering wheel Cybercab, which Musk has insisted is the only car worth building for an autonomous future. But the company’s full self-driving technology still falls short of full autonomy. Musk has promised that the “unsupervised” version of FSD will need at least 10 billion miles before it can be validated for safety. As of the date of publishing this article, Tesla’s FSD dashboard in real time It sits at 9.1 billion miles and counting.