Tesla Axes Affordable EV In Favour Of Self-Driving RoboTaxis: Report

American automaker Tesla has axed the research and development (R&D) of the affordable electric vehicle (EV) it had promised its investors, according to a report by Reuters. Instead, it will continue its R&D on the same platform to produce self-driving robotaxis. 

Elon Musk, CEO, Tesla, announced on X (formerly Twitter) that the American electric carmaker will unveil the said self-driving robotaxis on August 8, 2024. The announcement of the robotaxis came a few hours after the news of Tesla cancelling the affordable EV was reported by Reuters.

Before announcing the Robotaxi unveiling, Musk alleged that the Reuters report was false. However, he did not issue any clarification regarding the inconsistencies and inaccuracies in the report. 

The report suggests that three sources familiar with the matter claim that Tesla has axed the affordable EV and Reuters also claims to have access to company messages stating this. In January, Musk claimed that this low-cost, affordable EV could arrive in the second half of 2025. There were even reports that Tesla could manufacture the low-cost EV in India and now a new report suggests that Tesla will likely manufacture EVs for the Indian market at its Berlin Gigafactory in Germany. 

The upcoming affordable EV was generally referred to as Model 2 and was reportedly codenamed ‘Redwood’. It was expected to have its prices start at $25000 (roughly ₹20.83 lakh). For reference, the most affordable in Tesla’s line-up is the Model 3 which starts at $39,000 (roughly ₹32.50 lakh). 

The sources also claim that the decision to axe the affordable EV project comes at a time when Tesla is facing fierce competition globally from Chinese EV manufacturers. The Chinese companies offering EVs as low as $10,000 (roughly ₹8.33 lakh). The sources also claim that the decision was made in late February.