Zac Quinn 
Tesla has opted to cancel its long-planned affordable EV plan because there’s no such thing as an affordable EV. Investors have been counting on the arrival of this vehicle to drive its growth into a mass-market automaker, but it’s simply an unrealistic dream to chase.
Affordable Tesla Project Scrapped: Details
According to Reuters, the decision represents abandoning a longstanding goal for the company, one that Tesla CEO Elon Musk often characterized as its primary mission. This dream stretches back to 2006 when Musk revealed that its “master plan” was to build luxury models before using the profits to finance a “low-cost family car.” Eighteen years later, they have come to terms with the fact that that won’t happen.
Interestingly, Musk has been repeating the promise to investors and consumers that an affordable model would be coming to market, set to be built at its Texas factory in the second half of 2025. Two sources for Reuters stated that they learned about the decision to scrap the Model 2 in a meeting attended by a large number of employees in late February. The Model 2 was expected to start at about $25,000. By comparison, Tesla’s current cheapest model is the Model 3 sedan, which starts at around $39,000.
Tesla has also contacted suppliers about the program’s cancellation as it pivots its focus from the Model 2 to robotaxis. Musk has envisioned this segment as the future of mobility. We’re sure there are a number of factors going against Tesla and its plans to offer such an affordable EV, the cost of resources being a key factor. To put it simply, creating an affordable EV would mean the potential for significant profit losses thanks to how much it costs to build these vehicles.
