Tesla Execs Question Musk’s Denial of Affordable $25K EV Cancellation
Senior Tesla executives were reportedly alarmed when CEO Elon Musk publicly denied reports that the company had canceled its plans for an all-new $25,000 electric vehicle (EV). According to sources familiar with the matter, Musk’s denial contradicted internal communications stating that the project had been shelved.
On April 5, 2024, shortly after a Reuters article reported the cancellation of the affordable EV—often referred to by investors as the \”Model 2\”—Musk took to X (formerly Twitter) to refute the claims. \”Reuters is lying,\” he posted, which helped stem a 6% decline in Tesla’s stock. By market close, the stock had recovered some losses but was still down 3.6%.
The contradiction between Musk’s public statement and internal decisions caused confusion among Tesla’s leadership. Executives approached Musk for clarification, only to be told that the project remained canceled, sources said. This incident highlights the challenges Tesla faces in delivering a low-cost, mass-market EV—a key promise that has yet to materialize.
Meanwhile, competition is heating up. Chinese automaker BYD has taken the global lead in affordable EVs, outselling Tesla in Europe for the first time. BYD’s entry-level Seagull electric hatchback costs less than $10,000 in China and is competitively priced in international markets.
Some Tesla executives were reportedly untroubled by Musk’s public denial, stating that the company keeps its product plans flexible to adapt to market conditions. However, with a lineup that some consider dated and declining sales, Tesla’s absence in the affordable EV segment is becoming more noticeable.
Neither Elon Musk nor Tesla has explicitly confirmed the cancellation of the new model. The company has not introduced a low-cost EV that Musk once described as pivotal to Tesla’s future. The current lowest-priced Tesla is the Model 3, starting at $42,500.
Tesla did not respond to requests for comment on the matter.
