Reuters reported on Friday that Tesla has canceled its inexpensive car that would have catapulted Tesla’s sales growth, citing anonymous sources and a company message seen by the news outlet.
“Reuters is lying (again),” Elon Musk said on Twitter in a response to Zerohedge, who cited the Reuters headline, shortly following the article’s publication.
The anonymous sources said they become privy to Tesla’s plans to scrap the cheaper model in a meeting in late February.
According to Reuters, these sources said that Tesla would continue to develop self-driving robotaxis on the same small-vehicle platform. Reuters referred to the move as “an abandonment of a longstanding goal that Tesla chief Elon Musk has often characterized as its primary mission: affordable electric cars for the masses.”
Tesla’s 2006 plan outlined a schedule where a luxury model would be manufactured first to generate profits, followed by a lower cost family car somewhere down the line.
“Reuters is dying,” Musk added in a tweet just a few minutes after his reply to Zerohedge.
Reuters accused Tesla’s CEO of “repeatedly” promising an affordable vehicle to investors—and consumers. In January, Reuters again quoted unnamed sources familiar with Tesla's plans, saying that Tesla would prepare to mass produce a new model starting in 2025—a compact crossover that would assuage the public’s demand for an affordable EV. Reuters said the model would be named “Redwood” and could cost as little as $25,000.
Tesla’s least expensive model today is nearly $40,000 by comparison.
Reuters said the initial production was planned at 10,000 per week.
Reuters said that it saw company messages about the cancellation of the lower-cost model from an “unnamed” program manager that discussed the project’s cancelation with engineering staff, where attendees were told not to tell suppliers.
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By Julianne Geiger for Oilprice.com
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