Currently reading: Report: Tesla Model 2 scrapped in favour of robotaxis
Reuters says that Tesla's long-awaited £25,000 electric car has been cancelled

Tesla has scrapped plans for a new ‘Model 2’ entry-level electric car, Reuters reports.

The long-promised new model line, which boss Elon Musk recently suggested could enter production late next year, was tipped to come to market at less than £25,000 as a rival to the likes of the Volkswagen ID 2, Renault 5 and MG 4 EV.

Citing three sources familiar with the matter and internal company messages, Reuters says the project has been scrapped and the platform that was to underpin the EV will now be used for a line of autonomous robotaxis, produced at much lower volumes.

Tesla refused to comment when approached by Autocar and Musk responded to the report with a post on his social media platform, X, that read simply: “Reuters is dying”.

Tesla has long hinted at plans for a cut-price new car to sit beneath the Model 3 saloon and Model Y crossover but has only given limited indications of its positioning over the past few years.

Most recently, the firm released a shadowy teaser image of its silhouette, suggesting it would effectively be a downsized take on the Model 3.

The American firm spoke of ambitious plans to sell an astonishing 700 million examples of the car, codenamed Project Redwood, over its lifetime.

Tesla's move away from the cheaper end of the EV market comes at a time when affordable Chinese cars, such as the BYD Dolphin, are arriving in the UK. 

Crucial to the Model 2’s viability was a new production process called Unboxed, which essentially revolves around reducing the amount of work done at each stage of the production line, avoiding any unnecessary movement or disassembly of the car or its components during its journey down the production line.

For example, the seats would be mounted directly to the underfloor battery pack, with the entire unit then raised into a bodyshell that has been painted in sections to avoid the need for door removal and reinstallation.

Initial production for the Model 2 was tipped for Germany. The car's platform was thought to be unrelated to other Teslas.

Reuters suggests this production process and the platform to which it applies will instead be deployed for Tesla's long-mooted autonomous ride-hailing vehicle - which won't be produced in the same colossal volumes.

It quotes a source as saying "Elon's directive is to go all in on Robotaxi".

Felix Page

Felix Page
Title: News and features editor

Felix is Autocar's news editor, responsible for leading the brand's agenda-shaping coverage across all facets of the global automotive industry - both in print and online.

He has interviewed the most powerful and widely respected people in motoring, covered the reveals and launches of today's most important cars, and broken some of the biggest automotive stories of the last few years. 

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Clive Goldthorp 6 April 2024

I wonder whether any other Autocar readers have taken the time to read the admittedly somewhat lengthy Reuters article at the link in the third paragraph above - if so, they will have noted that, according to Reuters, this is how Elon Musk responded to that article on X:

"Tesla did not respond to requests for comment. After the story was published, Musk posted on his social media site X that "Reuters is lying (again)." He did not identify any specific inaccuracies."  (My bold and underlining for emphasis)

That therefore begs this question: why has the author of Autocar's article, News Editor Felix Page, changed the original quote to "Reuters is dying"? 

Felix may well, of course, have checked the relevant tweet from Elon Musk on X but, as the former News Editor of a well-known and respected enthusiasts' motoring website, I would respectfully suggest that an explanation is merited - for the record, and as a matter of principle, I choose not to use social media and so have not checked on X myself.

russ13b 6 April 2024

Nah, that was a reply. Elon tweeted "Reuters is dying", and other people replied with "Reuters is lying because reuters is dying"  or a variation on the theme of "old media is dying X is dominating" and accusing Reuters of being fake news etc

Clive Goldthorp 8 April 2024

Well, interestingly, The Times ran a version of the Reuters' article on Page 43 of last Saturday's edition in which Elon Musk's "Reuters is lying (again)" post on X was repeated.

I wonder whether Mr Musk altered the word "lying" to the word "dying" after the Reuters article was published - either way, I reckon that an Editor's Note clarifying the apparent discrepancy between the original Reuters article and the Autocar article above might be appropriate in the interests of journalistic accuracy.

lukeski 6 April 2024

Not only is Elon's attack on Reuters, childish and irrelevant, and avoiding the question. It is also nonsense, it has had a huge run up in share price,and growing sales, profit and margins.

xxxx 6 April 2024

If true this is a diaster for Tesla, they're only really a 2 car company meaning a things could fall apart very quickly.  Self driving taxi will be like all the other autonomouns BS out there, or rather not out there.

I await confirmation of the story then a crashing of the share price.