Elon Musk shut down internal Tesla analysis that showed Robotaxi would lose money
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.
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.
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Employees stand inside a supermarket without lights in Burgos on April 28, 2025, during a massive power cut affecting the entire Iberian peninsula and the south of France.
Cesar Manso | Afp | Getty Images
A catastrophic power outage affecting much of Spain, Portugal and the south of France has thrust the role of renewables and energy security into the spotlight.
An abrupt and widespread blackout, one of Europe’s worst in living memory, affected the entire Iberian Peninsula on April 28.
The outage, which lasted for several hours, plunged much of the region into darkness, stranded thousands of train passengers and left millions without phone or internet coverage or access to cash from ATMs.
Spanish authorities have since launched several investigations to determine the root cause of the incident, including a probe into whether a cyberattack could be to blame.
Alongside Spanish opposition parties, some external observers have flagged renewables and net-zero emissions targets as possible reasons for the outage, particularly given Spain and Portugal both rely on high levels of wind and solar for their electricity grid.
“It’s very sad to see what’s happened to Portugal and Spain and so many people there, but you know, when you hitch your wagon to the weather, it’s just a risky endeavor,” U.S. Energy Secretary Chris Wright told CNBC’s “Power Lunch” on April 28.
Spanish Prime Minister Pedro Sanchez and the country’s grid operator Red Electrica de Espana (REE) have both said record levels of renewable energy were not at fault for the blackout.
People queue at a bus stop at Cibeles Square in downtown Madrid as subway and trains are totally out of service due to a massive power outage in Spain, on April 28, 2025.
Thomas Coex | Afp | Getty Images
European Union energy chief Dan Jorgensen, meanwhile, said that there was “nothing unusual” about the sources of energy supplying electricity to the system at the time of the outage.
“So, the causes of the blackout cannot be reduced to a specific source of energy, for instance renewables,” he added.
‘Europe needs more energy’
European energy technology companies called for observers to refrain from drawing their own conclusions in the absence of a formal explanation from authorities.
Henrik Andersen, CEO of Danish wind turbine manufacturer Vestas, said he’d encourage “a degree of statesmanship” over the blackout, particularly as Spanish policymakers continue to investigate.
“First of all, energy security means that you can run societies without having blackouts. That’s stating the obvious,” Andersen told CNBC’s “Squawk Box Europe” on Tuesday.
“Everyone is grasping quick root causes and blaming each other, and I simply just don’t want to go there because until we know the root cause of why grids can fail across Spain and Portugal, let’s not second guess or try to blame someone at cybersecurity or blame individual energy sources,” he added.
“Europe needs more energy — and we probably also need a stronger grid. That goes without saying,” Andersen said.
Siemens Energy CEO Christian Bruch, meanwhile, said the German energy tech group was holding talks with the relevant transmission and utility operators following the blackout.
“What you do see is that when you build an energy system, you need to think about the generation, like solar, wind, gas, whatever, but you also need to think about how the overall system on the grid side [is[ operating and how you stabilize that,” Bruch told CNBC on Thursday.
Solar panels on the Seat Cupra SA plant in Martorell, Spain, on Thursday, March 13, 2025.
Bloomberg | Bloomberg | Getty Images
“This is sometimes underestimated in its complexity, and this is why products from us for grid stabilizations are in demand at the moment to balance these things out,” he continued.
“It’s possible to solve it but it will require investments and it’s not easy. It’s not just a couple of solar cells and some batteries. It’s a little bit more complex than this,” Bruch said.
‘Cash suddenly becomes really important’
For those on the ground at the time of the outage, the lack of power underlined the challenges of a digital society.
“Cash suddenly becomes really important,” Roseanna, a resident of the southern Spanish city of Málaga, told CNBC. She said she only had 40 euros ($45.16) available when the power cut just after midday.
“Obviously you can’t get money out and you can’t pay with card, so it’s certainly important to have a little bit of cash in your pocket at all times,” she continued.
“We’ve gone all digital but the system’s ruined if there’s no electricity,” Roseanna said.
— CNBC’s Karen Gilchrist contributed to this report.
Lease deals get all the hype, but most people still want to own the car after they’re done making all those payments on it. If that sounds like you, and you’ve been waiting for the interest rates on auto loans to drop, you’re in luck: there are a bunch of great plug-in cars you can buy with 0% financing in May, 2025!
As I was putting this list together, I realized there were plenty of ways for me to present this information. “Best EVs ..?” Too opinion based. “Cheapest EVs ..?” Too much research. “Best deal ..?” Too opinion based. In the end, I went with alphabetical order, by make. And, as for which deals are new this month? You’re just gonna have to check the list. Enjoy!
Acura ZDX
New for 2024, Acura ZDX uses a GM Ultium battery and drive motors, but the styling, interior, and infotainment software are all Honda. That means you’ll get a solidly-built EV with GM levels of parts support and Honda levels of fit, finish, and quality control. All that plus Apple CarPlay and (through June 2nd) 0% financing for up to 72 months makes the ZDX one the best sporty crossover values in the business.
All the electric Chevrolet models
Chevrolet is offering 0% financing for up to 60 months on all three of its Ultium-based EVs – and they’re all winners. The Silverado can be spec’ed up to a 10,500 lb. GVWR, making it capable enough to tow whatever horse, boat, or RV you put behind it.
On the crossover side, both the Chevy Blazer EV and Equinox EV each offer their own takes on the five-passenger family SUV, with the cost of base model Equinox LT FWD models with 319 miles of EPA-rated range dropping to just $27,500 after you apply the $7,500 Federal tax credit (which, for now, is still a thing).
Dodge Charger
As Stellantis flip-flops its way towards some kind of electrified future, Dodge is hoping that at least a few muscle car enthusiasts with extra cash will find their way to a Dodge store and ask for the meanest, loudest, tire-shreddingest thing on the lot without caring too much about what’s under the hood.
For them, Dodge has the new electric Charger. And if you still owed money on the Hemi you just totaled, Dodge will help get the deal done on its latest retro-tastic ride with a $3,000 rebate plus 0% financing for up to 72 months!
GMC Hummer EV
The biggest Ultium-based EVs from GM’s commercial truck brand are seriously impressive machines, with shockingly quick acceleration and on-road handling that seems to defy the laws of physics once you understand that these are, essentially, medium-duty trucks. This month, GMC is doing its best to move out its existing inventory of 2024s and ’25s so if you’re a fan of heavy metal you’ll definitely want to stop by your local GMC dealer and give the Hummer EV a test drive.
Honda Prologue
The Honda Prologue was one of the top-selling electric crossovers last year, combining GM’s excellent Ultium platform with Honda sensibilities and Apple CarPlay to create a winning combination. Even so, there’s still some remaining 2024 inventory out there. To make room for the 2025 models, Honda is offering 0% APR for up to 72 months on the remaining 2024s.
Hyundai IONIQ 6
From some angles, the Porsche influences in the Hyundai IONIQ 6′ design are obvious – but not so much so that it seems like a copy of anything. It’s aerodynamically efficient, comfortable, quick, offers up to 361 miles of range, can charge just about anywhere, and now through June 2nd, it’s available with 0% financing for up to 48 months.
Kia EV9
If you were waiting for a three-row SUV from a mainstream brand with a great warranty and normal doors, you’ve probably already checked out the Kia EV9. You’re not alone. Kia keeps setting EV sales records, and the EV9 is helping to drive those sales forward.
Kia’s electrified sales train doesn’t seem to be slowing down anytime soon, either. In addition to seeing some substantial discounts out there, you can finance a Kia EV9 at 0% for 72 months through Memorial Day.
Lexus RZ
Starting at $55,175, the Lexus RZ promises up to 266 miles of EPA-rated range from a 72.8 kWh battery back in the “base” RZ300e (and 224 from the top-shelf RZ450e). With up to 308 hp and over 195 lb-ft of instant, all-electric torque, the RZ promises to be one Lexus’ zippier rides in any trim.
US News is reporting that remaining 2024 and ’25 Lexus RZ models qualify for 0% financing for up to 72 months in some regions.
Nissan Ariya
I’ve already said that the Nissan Ariya didn’t get a fair shake. If you click that link, you’ll read about a car that offers solid driving dynamics, innovative interior design, and all the practicality that makes five-passenger crossovers the must-haves they’ve become for most families. With up to 289 miles of EPA-rated range, Tesla Supercharger access, and 0% interest from Nissan for up to 72 months, Nissan dealers should have no trouble finding homes for these.
Subaru Solterra
Despite being something of a slow seller, this mechanical twin of the Toyota bZ4X EV seems like a solid mid-size electric crossover with some outdoorsy vibes and granola style that offers more than enough utility to carry your mountain bikes to the trail or your kayaks to the river. Add in 227 miles of range, some big discounts, and 0% financing for up to 72 months, and this should be a great month for electric Subaru fans to drive home in a new Solterra.
Volkswagen ID.4
One of the most popular legacy EVs both in the US and Europe, the ID.4 offers Volkswagen build quality and (for 2024) a Chat-GPT enabled interface. To keep ID.4 sales rolling, VW dealers are getting aggressive with discounts, making this fast-charging, 291 mile EPA-rated range, 5-star safety rated EV a value proposition that’s tough to beat.
This month, get a Volkswagen ID.4 with 0% financing for up to 72 months or a $5,000 customer cash bonus to stack with it.
Disclaimer: the vehicle models and financing deals above were sourced from CarsDirect, CarEdge, and (where mentioned) the OEM websites – and were current as of 11MAY2025. These deals may not be available in every market, with every discount, or for every buyer (the standard “with approved credit” fine print should be considered implied). Check with your local dealer(s) for more information.
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Mercedes high-performance arm is about to hurl an all-electric, 1,000 hp GT squarely into Porsche Taycan territory – but will world-beating performance and a bespoke EV chassis be enough to convince the AMG faithful to pony up for an EV?
Despite excellent driving dynamics, screens for days, and acceleration that makes you feel like the finger of God is pressing into the seat, Mercedes-AMG’s EQE and EQS models were also cursed with jellybean styling and saddled with a confusing “is it an S class or isn’t it an S class” sub-brand that, together, probably turned more people off to EVs than on.
But Mercedes is making changes to right the ship. First, it’s dumping the EQ sub-brand and merging the styling language so that its next-generation EVs will be at least as good-looking or ugly as their ICE-powered cousins – and, second, it’s giving AMG a chassis of its own to lay down a marker and, the company hopes, make the latest generation of international super saloon buyers forget all about Xiaomi.
The newest, as-yet unnamed AMG GT will be based on an entirely bespoke platform called AMG.EA, rather than being based on an existing Mercedes-Benz EV. AMG.EA reportedly makes use of several new (to AMG, at least) technologies, including a pair of axial flux electric motors that are lighter and more powerful than the radial motors used in most EVs, while being smaller, as well.
Those AMG motors are expected to receive power from a flat, low-slung battery pack and put out at least enough power and torque to chase Porsche’s super-powered Taycan Turbo GT, which itself is good for over 1,000 hp and 0-100 kmh (62 mph) in just 2.2 seconds.
The overall proportions and rakish, sloping windshield are already clearly visible, despite the heavy camo, and it looks great. If there’s anything here to really criticize, though, it’s the bizarre echoing of Mercedes’ three-pointed star motif baked into the head- and tail-lights – which just doesn’t work for me, at all.
That said, I think Mercedes lost its way the first time they ever made the star light up. That made it a fashion brand in my book, and not the engineering powerhouse I grew up with. If you’re like me, and there’s a bunch of rowdy kids playing on your lawn, head on down to the comments and let me know.
Electric AMG image gallery
SOURCE | IMAGES: Mercedes-AMG.
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