Connect with us

Published

on

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.

Advertisement – scroll for more content

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.

FTC: We use income earning auto affiliate links. More.

Continue Reading

Environment

Xpeng launches G7, a new Tesla Model Y competitor for just $27,000

Published

on

By

Xpeng launches G7, a new Tesla Model Y competitor for just ,000

Xpeng has officially launched its new G7 electric SUV in China, entering the fiercely competitive electric crossover market with a starting price of just 195,800 yuan ($27,325 USD). The G7 is positioned squarely to compete with the Tesla Model Y and the newly unveiled Xiaomi YU7.

It is priced significantly more aggressively than the YU7, which shook up the industry just last week.

The G7, Xpeng’s seventh model, offers an attractive balance of performance, technology, and value, with an emphasis on the latter.

Like Lei Jun with the launch of the YU7 last week, He Xiaopeng was not shy about positioning the G7 against the best-selling Tesla Model Y.

Advertisement – scroll for more content

He compared the specs and pricing with the leading premium crossover. Like Jun, he brought up Tesla’s comparison challenge against the new Model Y:

The G7 is powered by a single rear-wheel-drive electric motor producing 292 horsepower (218 kW), it achieves a 0-100 km/h acceleration in 6.5 seconds. Impressively, the G7 can cover between 602 km and 702 km (374-436 miles) based on China’s generous CLTC standard, depending on the battery option and wheel size.

Two battery options are available, both using lithium iron phosphate (LFP) technology: a 68.5 kWh and a larger 80.8 kWh pack. With Xpeng’s advanced 5C charging technology, drivers can recharge up to 436 km (271 miles) of range in just 10 minutes.

Additionally, the G7 supports Vehicle-to-Load (V2L) functionality, providing up to 6 kW of external power, like the YU7 announced last week.

On the design front, the Xpeng G7 adopts the company’s second-generation “X Face” styling, featuring sleek running lights connected by a continuous LED strip, a closed front end for aerodynamic efficiency, and a distinctive “Star Ring” rear taillight design. Xpeng emphasizes the vehicle’s aerodynamics with a drag coefficient of just 0.238 Cd, slightly higher than the Model Y’s 0.230 Cd.

Inside, the G7 embraces minimalism, replacing conventional buttons with a large 15.6-inch central touchscreen powered by Qualcomm’s Snapdragon 8295 chipset. A standout interior feature is the expansive 87-inch augmented reality head-up display (AR-HUD), developed in collaboration with Huawei, that significantly enhances navigation and driving assistance.

Practicality is emphasized with ample cargo space: an 819-liter trunk that expands to 2,277 liters with the seats folded, plus an additional 120-liter compartment beneath the trunk floor and a modest 42-liter front trunk (frunk).

Xpeng is touting an adaptive AI-driven suspension system that actively adjusts to road conditions within milliseconds, allegedly surpassing comfort benchmarks set by the Mercedes-Benz GLE and Tesla Model Y. Cabin quietness also ranks high on Xpeng’s list of priorities.

Luxury and convenience features include dual 50W wireless phone chargers, a 20-speaker premium audio system, and a panoramic sunroof. Passengers in the second row enjoy premium touches like an 8-inch control screen, individual climate settings, a foldable table, and wireless charging.

The top-tier “Ultra” variant employs two proprietary Turing AI chips capable of delivering a massive 2,250 TOPS of computing power, enabling advanced Level 3 autonomous driving capabilities set to become active via an OTA update by December 2025, pending regulatory approval. Standard versions use dual Nvidia Orin-X chips with 508 TOPS.

The Xpeng G7 starts at 195,800 yuan ($27,325 USD) for the base “Max” variant with 602 km of range, stepping up to 205,800 yuan ($28,720 USD) for the longer-range “Max” (702 km) and topping out at 225,800 yuan ($31,510 USD) for the high-end “Ultra” trim.

Customers ordering the G7 Ultra before July 31 will receive complimentary upgrades including Nappa leather and power door handles.

G7 quickly demonstrated its popularity by securing 10,000 pre-orders in just 46 minutes.

Electrek’s Take

It’s not 200,000 orders within 3 minutes like the YU7, but Xpeng doesn’t have the brand power that Xiaomi has.

Nonetheless, it is pretty impressive.

The price is insane. The specs are competitive with the Model Y, which starts at 263,500 yuan and ranges up to 313,500 yuan ($36,770 – 43,750 USD), but the price starts at about $10,000 USD less.

Between this, the YU7 last week, and a few more models launching this month, the premium crossover segment is about to get crowded in China.

I think the Model Y is in serious trouble in China. We are about to see how it fares with real competition.

FTC: We use income earning auto affiliate links. More.

Continue Reading

Environment

Tesla Optimus is in shambles as head of program exits, production delayed

Published

on

By

Tesla Optimus is in shambles as head of program exits, production delayed

Tesla’s humanoid robot program, Optimus, is reportedly in disarray amid the departure of the senior vice president in charge, Milan Kovac.

Production has been delayed due to a new redesign, as the robot has yet to prove useful in Tesla’s factories.

Elon Musk has previously set a goal for Tesla to produce 5,000 to 10,000 Optimus humanoid robots this year.

The goal has reportedly been delayed as sources within the Chinese supply chain report Tesla informed suppliers of a 2-month halt on orders.

Advertisement – scroll for more content

AI Invest first reported the news, and The Information later corroborated the report:

Two supplier sources said Tesla has not explicitly stated it will reduce robot parts orders but will wait until the Optimus design adjustments are completed before finalizing a new mass production plan and resuming procurement. The adjustments may take two months. Musk recently stated on social media that the new version of Optimus has seen significant improvements over the second-generation Optimus unveiled in 2023 and now includes voice interaction powered by Grok.

The news came after we learned that Milan Kovac, the head of the Optimus program left Tesla last month, just months after being promoted to senior vice-president by Musk.

The new reports confirm that Ashok Elluswamy, who was elevated to senior vice-president in charge of self-driving at the same time as Kovac, is taking over responsabilities.

AI Invest reported some concerns from Tesla about Optimus that reportedly trickled down to Chinese suppliers:

According to Tesla’s feedback to suppliers, Optimus still faces hardware challenges, including overheating in some joint motors, low load capacity in dexterous hands, short lifespan of transmission components, and limited battery life. Tesla is currently evaluating samples from multiple dexterous hand suppliers, testing at least three different technical approaches. On the software side, Tesla may use more synthetic data to train the robot model, improving Optimus’ autonomous operation capabilities and success rate in performing complex tasks.

According to the report, Tesla had secured parts to build over 1,000 Optimus robots earlier this year and built quite a few, but they are currently only used “for moving batteries in Tesla’s battery workshops, with efficiency less than half that of human workers.”

The redesign is expected to delay plans by at least two months and could push many of Tesla’s goals.

However, Tesla is expected to still move ahead with the prgroam and it is likely to unveil the new generation of Optimus robots at its shareholders meeting this year.

Electrek’s Take

As I previously stated, I’m actually quite hyped for humanoid robots, but I don’t think they will be nearly as big as Musk claims and I simply don’t see Tesla having a significant advantage over the competition, which is significant.

Companies like Unitree are already selling robots, Figure has made impressive progress and poached from Tesla, then there’s Boston Dynamics and dozens more.

Kovac leaving just as Tesla is supposed to ramp-up production to 50,000 units next and make this a “multi-trillion-dollar” product is a red flag.The engineer would have certainly received sweet stock option packages when he was elevated to SVP and would have likely made a fortune if he would have been able to deliver on Musk’s goals.

But I think the real product at Tesla now is the stock – hence why they reportedly plan to unveil the next generation of the robot at the shareholders meeting and have it do another shady demostration, like it did at the ‘We, Robot’ event where the robots were remotely controlled by humans.

FTC: We use income earning auto affiliate links. More.

Continue Reading

Environment

Honda’s new electric two-wheeler doubles the power and range

Published

on

By

Honda's new electric two-wheeler doubles the power and range

Honda is stepping up its electric scooter game with the launch of its second electric model for Europe, the CUV e:. Following Honda’s previous debut of the EM1 e:, a compact, city-focused moped, the CUV e: brings more power, more range, and more real-world usability to riders who want a practical electric alternative to a 125cc scooter.

Now finally ready for the spotlight, the CUV e: is built on an underbone-style frame and powered by a 6 kW side-mounted electric motor producing 22 Nm of torque. That puts it squarely in the 125cc-equivalent category, allowing it to reach a top speed of 83 km/h (52 mph).

It’s not built for the highway, but rather for urban and suburban riders who want to achieve speeds seen on the fastest of urban roads and keep up with just about any traffic in the city. For that role, it looks like a solid performer – more than capable of keeping up with city traffic or carrying a second passenger.

One of the most useful features, especially for urban residents and apartment dwellers, is its use of Honda’s Mobile Power Pack e: swappable battery system. The scooter carries two of these Gogoro-style removable battery units, each rated at 50 V and 1.3 kWh. Combined, they offer over 70 km (43 miles) of WMTC-rated range. Compared to the Honda EM1 e:’s single Mobile Power Pack battery, the dual batteries of the CUV e: give Honda the chance to pull twice as much power or offer twice the range.

Advertisement – scroll for more content

Honda’s swappable battery standard is designed for portability and long life, with each pack weighing around 10 kg (22 lb) and rated for 2,500 full charge cycles. Honda has been slowly building a swappable battery ecosystem, and the CUV e: is clearly meant to be part of that larger infrastructure play.

Charging of the batteries is designed to be done easily off-board, either at home or at a battery station (where available). A full charge from 0 to 100% takes about six hours per pack, but Honda says 75% can be reached in just three hours. While fast charging would be nice, the swappable format means riders can keep an extra pair charged and ready if necessary, eliminating downtime altogether.

Honda didn’t skimp on features, either. The CUV e: offers three ride modes (Sport, Standard, and Econ), plus Reverse Assist for easier maneuvering. It includes a fairly spacious flat floorboard, under-seat storage, LED lighting, a USB-C port, and keyless ignition. Buyers can choose between a five-inch color TFT display or an upgraded seven-inch “RoadSync Duo” screen, which supports turn-by-turn navigation, music control, Bluetooth phone integration, and EV-specific ride data.

Positioned as a mid-range electric scooter, the CUV e: fills the space between low-speed mopeds and larger, premium e-motorcycles. It’s a key piece in Honda’s broader electrification strategy, which aims to introduce 10 or more electric motorcycle models globally by 2025 and reach full carbon neutrality in its motorcycle division by the 2040s.

With anticipated pricing starting at around €4,000 (approximately US $4,300), the CUV e: is expected to roll out in Europe first, with other global markets potentially following. Its combination of practical range, moderate speed, high build quality, and swappable batteries could make it an appealing option in cities where electric two-wheelers are on the rise.

If the EM1 e: was Honda dipping a toe into the electric waters, the CUV e: feels like a confident step forward. It’s not flashy, but it’s functional, well-designed, and undeniably useful, which is exactly the kind of machine that could help electric scooters go mainstream.

FTC: We use income earning auto affiliate links. More.

Continue Reading

Trending