San Francisco, CA – Tesla CEO Elon Musk refuted allegations made by Reuters on Friday that the company is abandoning plans for a budget-friendly starter car. According to the report, Tesla has supposedly scrapped its initiative to release an inexpensive vehicle called Model 2, priced at $25,000.
Musk took to social media platform X to denounce the Reuters report, accusing the outlet of spreading falsehoods. Reuters, citing three unnamed sources, claimed that internal documents from Tesla confirmed the cancellation of the affordable car project.
Following Musk’s response, Reuters included his comments in their article, noting that he did not specify any inaccuracies in their reporting. The fallout from the news saw Tesla’s stock price drop by nearly 5%.
Tesla has been engaged in a global price war for electric vehicles, with Musk hinting at a lower-cost model for years. Amidst increased interest rates and fierce competition, Tesla has slashed prices on existing models to attract more budget-conscious consumers.
The Chinese EV market, where Tesla has a significant presence, is a battleground for affordability. Domestic manufacturers in China have been introducing EVs priced as low as $10,000, putting pressure on Tesla to remain competitive.
While the Model 3 is currently Tesla’s most affordable option, starting at around $39,000 in the U.S., the company’s plans for a truly budget-friendly vehicle seem to be on hold. Musk’s ongoing efforts to deliver on his promise of a lower-cost Tesla model face challenges in a rapidly evolving market.
As Tesla navigates the shifting landscape of the electric vehicle industry, Musk’s commitment to innovation and affordability will be closely watched by investors and consumers alike.