Musk denies that Tesla is suspending its plan to make a cheap electric car

The American car manufacturer Tesla is giving up on one of its great promises: making an affordable electric car. According to Reuters this Friday, the company led by Elon Musk has abandoned the Model 2 project in the midst of a decline in its margins and sales, to direct its efforts to the design and production of autonomous robotaxis. However, shortly after the news broke, Musk posted on his personal X (formerly Twitter) account that “Reuters is dying” in response to a post that said Reuters was lying.

If the information from the news agency is true, it would represent a radical change for a company that was born with the idea of ​​first manufacturing luxury vehicles, and then offering “a low-cost family car,” which was supposed to begin production. in Texas in 2025 and would be sold for about $25,000. Today, the company's cheapest car is the Model 3, which in Spain has a price of 39,990 euros without public aid.

This supposed turnaround of the automobile company occurs at a difficult time for the company, which recorded a drop in sales of 8.5% between January and March, to 386,810 units, which caused a sharp drop in the stock market of 4.9%. % after data submission. This Friday, after the information published by Reuters, the company fell by 6%, although later this decline slowed to around 3.4% at the close of the European stock markets and then to 1.5% after the Musk's denial. The company's commitment to robotaxis appears to be a more complicated challenge than that of the Model 2, after Musk's numerous unfulfilled promises about the imminent arrival of 100% autonomous driving.

In this way, the tycoon would erase Tesla from the race to offer the so-called mass electric vehicle, in which Chinese companies such as SAIC Motor (owner of MG) seem to have several bodies ahead of their competitors, especially European ones. To protect its manufacturers, the European Commission launched an investigation in October into the alleged illegal public subsidies received by Chinese companies, which, added to lower labor and energy costs, would be giving them a decisive advantage over manufacturers such as Volkswagen, Renault or Stellantis. The latter went from being one of the biggest critics of Chinese brands to buying 20% ​​of one of them, Leapmotor, for 1.5 billion euros.

The competition from China only grows with the latest announcement of Xiaomi, which has just presented its first model, the SU7 (an exclusively electric vehicle), which has features reminiscent of a Porsche but at a lower price than Tesla. The technology giant plans to bet heavily on this new business for it and aims to be among the top five car manufacturers in the world in the next decade and a half.

These new manufacturers are arriving at a time when the electric vehicle pie seems to still be very small for everyone, since sales of this type of automobile are slowing down (just as Tesla predicted in the presentation of its results for last year) due to the poor charging infrastructure, the high price of vehicles, as well as the suspension of aid in countries such as Germany, China or even Norway, a pioneer in the adoption of this type of mobility.

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