Elon Musk shuts down report that Tesla is scrapping its ‘$25,000 Model 2’ electric car
Elon Musk has shut down a report that Tesla is scrapping its ‘$25,000 Model 2’ electric car in favor of its ‘Robotaxi’.
For the past few years, Tesla has been developing a next-generation vehicle platform that is going to enable the launch of two new vehicles: a smaller and cheaper vehicle, sometimes referred to as ‘Model 2’, and a dedicated self-driving vehicle, which Musk calls “Robotaxi”.
Now, Reuters reports that Tesla has scrapped plans for the former:
Tesla has canceled the long-promised inexpensive car that investors have been counting on to drive its growth into a mass-market automaker, according to three sources familiar with the matter and company messages seen by Reuters.
Musk quickly denied the report – saying that “Reuters is lying”:
However, Musk did respond to a post, seemingly in agreement, suggesting that Tesla might have shifted focus on the “Robotaxi” rather than the “$25,000 car”.
The Reuters report did note that Tesla “will continue developing self-driving robotaxis on the same small-vehicle platform.”
Musk previously said that Tesla plans to unveil its next-gen electric vehicles toward the end of the year and launch production toward the end of 2025.
Tesla is currently building its new production systems for the next-generation at its Gigafactory Texas facility in Austin.
Electrek’s Take
From a strategic standpoint, this made no sense to me. Tesla 100% needs a cheaper vehicle in order to expand its volumes.
I didn’t believe the report after it first came out, especially since I’ve seen a lot of real issues with Reuters’s Tesla reporting in the past. We even caught them sneakily back editing a post to make it look like Elon lied about calling out their reporting. I wrote a thread about it:
That said, it does sound like there’s something to the report, with at least Tesla prioritizing the robotaxi over the cheaper vehicle based on Elon’s follow-up reaction to the suggestion.
I know it’s not a reason for bad reporting, but if Tesla had a PR department, it could avoid issues like that.
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China just laid out a plan to roll out over 100,000 ultra-fast EV charging stations by 2027 – and they’ll all be open to the public.
The National Development and Reform Commission’s (NDRC) joint notice, issued on Monday, asks local authorities to put together construction plans for highway service areas and prioritize the ones that see 40% or more usage during holiday travel rushes.
The NDRC notes that China’s ultra-fast EV charging infrastructure needs upgrading as more 800V EVs hit the road. Those high-voltage platforms can handle super-fast charging in as little as 10 to 30 minutes, but only if the charging hardware is up to speed.
China had 31.4 million EVs on the road at the end of 2024 – nearly 9% of the country’s total vehicle fleet. But charging access is still catching up. As of May 2025, there were 14.4 million charging points, or roughly 1 for every 2.2 EVs.
To keep the grid running smoothly, China wants new chargers to be smart, with dynamic pricing to incentivize off-peak charging and solar and storage to power the charging stations.
To make the business side work, the government is pushing for 10-year leases for charging station operators, and it’s backing the buildout with local government bonds.
The NDRC emphasized that the DC fast chargers built will be open to the public. This is a big deal because a lot of fast chargers in China aren’t. For example, BYD’s new megawatt chargers aren’t open to third-party vehicles.
As of September 2024, China had expanded its charging infrastructure to 11.4 million EV chargers, but only 3.3 million were public.
Read more: California now has nearly 50% more EV chargers than gas nozzles
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Tesla is starting to experience some consequences for misleading Full Self Driving customers – at least that’s the finding of one arbitration ruling that has Tesla refunding one customer $10,000 plus legal fees for failing to deliver on their promises. Find out more on today’s legally challenging episode of Quick Charge!
An arbitration “court” found that Tesla misled customers with its Full Self Driving product, and has now been forced to refund at least one person’s $10,000 payment (plus legal fees) for the not-quite autonomous driving software. France, too, is piling on claims of deceptive business practices – but there’s some good news for FSD fans! If you’re still willing to pay for it, Tesla will thrown in 0% financing on a brand new Cybertruck.
Check out the relevant links, below, to learn more.
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