According to a credible new report, Elon Musk has reportedly shut down an internal analysis from Tesla executives that showed the company’s Robotaxi plans would lose money and that it should focus on its more affordable ‘Model 2’.

In early 2024, we reported that Musk had canceled Tesla’s plan for a new affordable electric vehicle built on its upcoming ‘unboxed’ vehicle platform, often referred to as ‘Model 2’ or ‘$25,000 Tesla’.

Instead, Musk pushed for only its new Robotaxi, also known as Cybercab, to be built on the new platform, and replaced the plans for a next-gen affordable EV with building cheaper versions of the Model Y and Model 3 with fewer features.

This decision culminated a long-in-the-making shift at Tesla from an EV automaker to an AI company focusing on self-driving cars.

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We credit that shift initiated by Musk for the current slump Tesla finds itself in right now, where it has only launched a single new vehicle in the last 5 years, the Cybertruck, and it’s a total commercial flop.

Now, The Information is out with a new in-depth report based on Tesla insiders that describe the decision-making process around the cancellation of the affordable Tesla and the focus on Robotaxi.

The report describes a meeting at the end of February 2024 when several Tesla executives were pushing Musk to greenlight the $25,000 Tesla:

In the last week of February 2024, after a couple of years of back-and-forth debate on the Model 2, Musk called a meeting of a wide range of executives at Tesla’s offices in Palo Alto, Calif. The proposed $25,000 car was on the agenda—a final chance to air the vehicle’s pros and cons, the people said. Musk’s senior lieutenants argued intensely for the economic logic of producing both the Model 2 and the Robotaxi.

After unveiling its next-generation battery in 2020, Musk announced that Tesla would make a $25,000 EV in 2020, but he had clearly soured on the idea by 2024.

He said in October 2024:

I think having a regular $25,000 model is pointless. Yeah. It would be silly. Like, it’ll be completely at odds with what we believe.

The Information says that Daniel Ho, head of Tesla vehicle programs, Drew Baglino, SVP of engineering, and Rohan Patel, head of business development and policy, Lars Moravy, vice president of vehicle engineering, and Franz von Holzhausen, chief designer, all pushed for Musk to greenlight the production of the new $25,000 model.

Omead Afshar, a Musk loyalist who started out as his chief of staff and now holds a wide-ranging executive role at Tesla, reportedly said, “Is there a mutiny?”

The executives pointed to an internal report that didn’t paint a good picture of Tesla’s Robotaxi plan. The report has credibility as Patel commented on it:

We had lots of modeling that showed the payback around FSD [Full Self Driving] and Robotaxi was going to be slow. It was going to be choppy. It was going to be very, very hard outside of the U.S., given the regulatory environment or lack of regulatory environment.

Musk dismissed the analysis, greenlighted the Cybercab, and killed the $25,000 driveable Tesla vehicle in favor of the Model Y-based cheaper vehicle with fewer features.

The information describes the analysis:

Much of the work was done by analysts working under Baglino, head of power train and one of Musk’s most trusted aides. The calculations began with some simple math and some broad assumptions: Individuals would buy the cars, but a large portion of the sales would go to fleet operators, and the vehicles would mostly be used for ride-sharing. Many people would give up car ownership and use Robotaxis. Tesla would get a cut of each Robotaxi ride.

The analysis followed a lot of Musk’s assumptions, such as that the US car fleet would shrink from 15 million a year to roughly 3 million due to Robotaxis having a 5 times higher utilization rate.

They subtracted people who wouldn’t want to switch to a robotaxi for various reasons, arriving at a potential for 1 million self-driving vehicles a year.

One of the people familiar with the analysis said:

There is ultimately a saturation of people who want to be ferried around in somebody else’s car.

After accounting for competition, Tesla figured it would be hard for robotaxis to replace the ~600,000 vehicles it sells in the US annually.

Tesla calculated that the robotaxis would bring in about $20,000 to $25,000 in revenue at the sale and about three times that from Tesla’s share of the fares it would complete over their lifetimes:

The analysts figured Robotaxis would sell for between $20,000 and $25,000, and that Tesla could make up to three times that over the lifetime of the cars through its cut of fares. They added in capital spending and operational costs, plus services like charging stations and parking depots.

The internal analysis assigned a much lower value to Tesla robotaxis than Musk had previously stated publicly.

In 2019, Musk said:

If we make all cars with FSD package self-driving, as planned, any such Tesla should be worth $100k to $200k, as utility increases from ~12 hours/week to ~60 hours/week.

Furthermore, Tesla’s internal analysis pointed toward difficulties expanding into other markets, which could limit the scale and profitability of the robotaxi program. Ultimately, it predicted that it could lose money for years.

Electrek’s Take

For years, this has been one of my biggest concerns about Tesla: Musk surrounding himself with yesmen and not listening to others.

This looks like a perfect example. It was a terrible decision fueled by Musk’s belief that he was smarter than anyone in the room and encouraged by sycophants like Afshar.

Musk has been selling Tesla shareholders on a perfect robotaxi future, but the truth is not as rosy, and that’s if they solve self-driving ahead of the competition, which is a big if.

It’s not new for the CEO to make outlandish growth promises, but it’s another thing to do at the detriment of an already profitable and fast-growing auto business.

The report also supports our suspicions that the shift in strategy contributed to some of Tesla’s talent exodus last year.

Bear with me, as this one is a bit complicated and jargon-heavy. Lotus Technology Inc. announced that Geely, the majority owner of its vehicle manufacturing business Lotus UK, exercised its put option earlier this week to sell its 51% stake in the latter company back to the former company. In Lamen’s terms, Geely is out, so Lotus Tech has to buy the 51% of Lotus UK back, putting all those respective businesses back under one umbrella. Still with me? More below.

The Lotus brand was founded in the UK over 70 years ago and has made a name for itself in delivering sporty yet luxurious hypercars. Unlike many of its competitors, Lotus was a relatively early adopter of EV technologies and has previously vowed to become an all-electric brand.

That promise was part of a strategy bolstered by Geely Hong Kong Ltd. (Geely), which acquired 51% of Lotus Advanced Technologies (Lotus UK or Lotus Cars) in 2017. As a result, Geely gained majority control of Lotus’ manufacturing division in the UK and its consultancy division, Lotus Engineering.

Lotus Technology Inc. – The R&D and design business of Lotus Group has been operating as a separate entity since then. In late January 2023, Geely and Lotus Tech signed a Put Option on Geely’s 51% stake in Lotus UK’s equity interests. As of April 14, 2025, Geely has decided to exercise said Put Option, requiring Lotus Tech to purchase that majority stake back, which it intends to do this year.

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Lotus Tech ($LOT) to buy business back from Geely

Lotus Technology Inc. ($LOT) issued a press release today outlining details of Geely’s Put Option announcement. The company explained its intention to purchase 51% of Lotus Cars and reorganize R&D, engineering, and manufacturing under one brand.

The equity interest purchase of Lotus Cars will be a non-cash transaction based on a pre-agreed pricing method between Lotus Tech and Geely, i.e., the 2023 Put Option. Lotus Tech CEO Qingfeng Feng addressed the news:

This acquisition marks a critical milestone in our strategic journey to fully integrate all businesses under the Lotus brand, which will strengthen brand equity and enhance our operational flexibility and internal synergies. We are confident that the transaction will create substantial long-term value for our shareholders.

Mr. Feng may be painting a rosier picture than what is actually going on. It will be beneficial to regain control over Lotus UK and Lotus Engineering to consolidate financials and streamline business operations. Still, an exercised Put Option is hardly ever encouraging news.

Geely remains a massively successful global auto conglomerate and a key piece behind many leading EV technologies across its marques, especially in China. The fact that such a savant in engineering and EV development has left Lotus’ corner is concerning when imagining the future of the veteran UK brand, at least in terms of BEV development.

Lotus Tech… or Lotus Cars? Okay, let’s just call the company Lotus now. Whatever the name, Lotus will continue without Geely but still has support from consumer-focused investment firm L Catterton following a SPAC merger completed last year.

The reintegration of all Lotus businesses is expected to be completed this year. According to a representative for the company, it is now in a blackout period, so they could not comment any further until Lotus releases its Q4/ EOY 2024 earnings on April 22. That report will offer more insight into where the automaker currently stands financially and what plans it has going forward without Geely. Hopefully those plans still include more sexy BEVs!

California’s e-bike incentive program is back, offering CA residents another opportunity to receive up to $2,000 off a new electric bicycle.

The second application window opens on April 29 at 5 PM, with 1,000 vouchers set to become available. In order to become eligible for a chance to receive one of the limited vouchers, applicants must enter the online waiting room between 5 and 6 PM.

According to the incentive program rules, all entries during this period will be placed in random order, and thus, everyone will have an equal chance to apply. 

The program, launched by the California Air Resources Board (CARB), aims to promote zero-emission transportation options, especially for low-income residents. Eligible applicants must be at least 18 years old and have a household income at or below 300% of the Federal Poverty Level. Approved participants will receive a voucher of up to $2,000, which can be used at participating retailers.  

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The program’s initial launch in December 2024 saw overwhelming demand, with all 1,500 vouchers claimed within minutes. At one point, the application queue reached 100,000 people.

For those interested in applying, it’s crucial to be prepared and enter the waiting room promptly at 5 p.m. on April 29. Given the high demand during the first round, the available vouchers are expected to be claimed quickly.

For more information and to apply, visit the California E-Bike Incentive Project’s website.

Electrek’s Take

Programs like California’s e-bike voucher initiative aren’t just about saving a few bucks on a fun new ride – they’re about transforming transportation. E-bikes are proven to reduce car trips, improve mobility for low-income communities, and offer a genuinely fun and efficient alternative for commuting, errands, and more.

With transportation costs associated with car ownership or public transportation creating a constant economic burden for commuters and increasingly worsening traffic in many cities, making e-bikes more accessible isn’t just good policy – it’s common sense.

California’s program, though far from perfect in execution, shows that there’s massive public interest in affordable, practical micromobility. When 100,000 people rush to get a shot at riding an electric bike, it’s not a fringe idea – it’s a movement. If policymakers are serious about cutting emissions and improving quality of life, incentives like these should be expanded and replicated across the country.

California’s program still has significant room for improvement, but it’s a great step in the right direction. I’d love to see it get more funding to enable significantly more vouchers, as well as have an entry window longer than just one hour to allow folks who may have work or other conflicts to enter as well. But with each round, it appears the program is making improvements. Progress is good; let’s keep it up.