Doubt over Tesla’s affordable car and realistic autonomous plans

According to insiders, Tesla has stopped the development of its compact model with a steering wheel and pedals. Elon Musk reacted immediately to the rumour and shortly afterwards announced a presentation date for the self-driving robotaxi that is based on the same platform.

Image: Tesla

According to a report published by the news agency Reuters on Friday that cites company communications and three sources familiar with the matter, Tesla has halted development of its planned compact model for around 25,000 US dollars. At least, the electric carmaker seems to have halted the version with a steering wheel and pedals, as the development of the robotaxi based on the same platform will continue.

Two sources told the news agency that they had learned of Tesla’s decision at a meeting attended by numerous employees at the end of February. “Elon’s directive is to go all in on robotaxi,” one source was quoted as saying. Another source confirmed the cancellation and said that new plans envisage the production of fully autonomous cars, albeit in much smaller numbers than forecast for the version with a steering wheel and pedals.

Tesla CEO Elon Musk immediately responded to the report by writing only, “Reuters is lying (again),” on his short message platform X – without providing any further explanation. Tesla shares dropped dramatically in value but partially picked up again when, a few hours later, he announced the presentation of the robotaxi for 8 August

The new rumours have a history. In September 2023, an Elon Musk biography was published, revealing that Musk actually wanted the new compact model to be a pure robotaxi. Tesla engineers apparently had to use a lot of persuasion to convince Musk to let them equip the car with a steering wheel and pedals, to which he eventually relented. At the end of 2023, Musk explained that Tesla would initially produce its compact model for around 25,000 dollars in the existing factory in Texas and only later in the new plant in Mexico. The development of the model is already well-advanced. Production should start in 2025.

What is remarkable is that Elon Musk is now announcing the presentation of the Robotaxi for 8 August this year – which is in around four months’ time. The version of the compact model will probably do without a steering wheel and pedals. So, has the other version for human driving actually been cancelled or at least put on hold? It is difficult to say at this stage.

Currently, self-driving cars are only approved by US and Chinese regulatory authorities for limited use on public roads in some cities. They are, therefore, a long way from being used on a global scale. It is unclear how the alleged realignment to focus fully on autonomous driving fits in with Elon Musk’s repeatedly stated goal that Tesla is aiming for annual sales of 20 million vehicles by 2030.

This raises a number of other questions. Is Musk so convinced of Tesla’s technology for autonomous driving that he really expects to be able to set the global standard and make it quasi-legal worldwide within the next few years? In the past, he has said that he wanted to license Tesla’s technology to other car manufacturers. Does Tesla’s Supervisory Board support Musk’s course? So far, all of this is completely speculative.

We hope to have more first-hand information at the latest at the presentation in August – or perhaps even this month when Tesla presents its quarterly figures on 23 April. Investors will certainly have a few questions at this earnings call.

Translation by Carrie Hampel

1 Comment

about „Doubt over Tesla’s affordable car and realistic autonomous plans“
John H
08.04.2024 um 14:20
So Musk has perfected AI for autonomous driving? Somewhat unlikely as there isn't the any evidence that autonomous driving is safe. In fact, with Apple's retreat, its the opposite. Still, it gives European manufacturers the chance to reclaim the EV market which is heading towards providing $25K cars price point. Or its a Musk joke.

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