If electric vehicle (EV) consumers were hoping for a more affordable Tesla in the near future, they might need to adjust their expectations. Recent reports indicate that Tesla’s priorities have shifted away from a mass-market $25,000 model, focusing instead on the development of robotaxis—a move announced by Elon Musk and set to be unveiled in August.
The pivot comes in the wake of Tesla’s disappointing first-quarter earnings report, which revealedealed a 20% decline in vehicle deliveries. Additionally, Bloomberg predicts a 40% drop in operating profit and the company’s first revenue decline in four years.
In response, Musk is streamlining operations by reducing the company’s headcount by 10% and placing a strategic bet on robotaxis to rejuvenate Tesla’s prospects.
Musk’s April announcement hinted at Tesla’s plans to reveal its inaugural robotaxi. However, achieving this milestone will likely require significant advancements in the automakfull self-drivingiving (FSD) software.
Currently, Tesla’s FSD technology enables features like automatic lane changes, self-parking, and highway entry. However, it still necessitates constant driver supervision. The company also faces legal challenges related to the software.
While official details about the robotaxi remain scarce, Musk has shared his vision for an autonomous cab. This includes eliminating traditional controls like mirrors, pedals, and steering wheels. Furthermore, Tesla owners could potentially transform their vehicles into robotaxis, earning up to $30,000 annually.
However, skepticism remains. Musk previopromised to havemised to have a million autonomous cabs on the road by 2019—an ambitious claim that never materialized. To date, Tesla has not deployed any autonomous cabs or received government approval for public road testing.
Insiders reveal that Tesla is fully committed to the robotaxi project. The timeline for prototype rollout and production capacity now takes precedence over the more affordable Tesla model.
This shift represents a marked change in focus for Musk and the company. Just last December, Musk tantalized consumers with hints about the $25,000 Tesla, describing it as groundbreaking and unlike any other production line.
For now, the cheaper Tesla model seems to have been shelved. While Reuters reported the demise of the $25,000 model in early April, Musk refuted the claim, and sources contested it as well.
Analysts caution that Musk’s robotaxi bet carries risks. Instead, they emphasize the urgency of delivering an affordable electric car—a demand echoed by U.S. drivers eager to transition to cleaner transportation.
Wedbush analysts go so far as to deem it “crucial” for Tesla to introduce a more budget-friendly model within the next 18 months.
As of now, Tesla remains tight-lipped, and a company spokesperson declined to comment on the matter.
