Tesla Reportedly Planning Cheap EV That Elon Musk Called ‘Silly’ And ‘Pointless’

Remember when Elon Musk said the idea of building a $25,000 Tesla was absurd given that the future of driving was going to be autonomous? The future may still be autonomous, just not at the pace that Musk may have envisioned a couple of years ago when he effectively shelved the company’s plan to make a true cheap car.

The new report comes from Reuters, which cites both internal and external sources that indicate that the company has reached out to suppliers in order to build an affordable Tesla model. This shouldn’t feel like big news for a few reasons.

First, Ford is in the process of creating three different electric cars that are under $30,000. Second, the company is heading towards a third year of falling sales as competition increases and its new models have dwindled. Third, Tesla spent a couple of years talking about building it, only to abandon the project.

Why did Tesla abandon it? The company decided it wanted to skip ahead to something it deemed more important, which is a Tesla CyberCab. Musk was quite severe when talking about the $25,000 car that investors kept asking about, saying in an investor call:

So, I think we’ve made very clear that we’re — the future is autonomous. I mean, it’s going to be — I’ve actually said this many years ago, but that in my strong belief and I believe that is panning out to be true, very obvious retrospect is that the future is autonomous electric vehicles. And nonautonomous gasoline vehicles here will be like riding a horse and using a foot bone. It’s not that there are no horses.

Yes, there are some but they’re unusual. They’re niche. And so, everything is going to be electric autonomous. I think this is like it should be, frankly, blindingly obvious at this point, that is the future.

So, a lot of automotive companies, most of the companies have not internalized this, which is surprising because we’re shouting from the rooftops for such a long time.

That’s right, every other automaker is just too stupid to listen to Musk and should be building autonomous cars. He went on:

So, anyway, basically, I think having a regular 25K model is pointless. It would be silly. Like it would be completely at odds with what we believe.

That makes this section from the Reuters article hit a little different:

The Tesla employee declined to confirm or deny details of any specific ​vehicle but said, in general, the automaker now aims to build models that would be driverless but offer a human-driven option.

While aiming for full autonomy across its lineup, the person said, Tesla realizes ⁠many global markets won’t see meaningful adoption – nor regulatory acceptance – of driverless vehicles for years. Preserving the option to build a particular model with or without driving controls could enable more sales and help ensure Tesla can keep its car factories running near capacity, the ​person said.

Reuters sources seem insistent that this isn’t just a de-contented Model 3 and Model Y, which was the company’s last cheap car proposal. Currently, the cheapest Tesla is the $36,990 Rear-Wheel Drive Model 3. That’s a lot of car for the money, but it’s way more expensive than the cheap Tesla that was originally envisioned.

The goal, according to these sources, is to build a car that’s smaller and more price-competitive with less-expensive vehicles in China, and it seems like that’s where the production will begin. Right now, the company is having to compete with popular cheap electric cars like the best-selling Geely Star Wish and BYD Seagull, which start around $10,000, or a third as much as the cheapest Model 3.

How can Tesla save money? Some concepts proposed in the article are a smaller battery, which would result in a shorter range but lower the cost of the most expensive part of most electric cars. Additionally, most of the cars it would compete with are single-motor vehicles.

This isn’t to say that Tesla has given up on autonomy, and it’s possible that even these cheaper cars get cameras so that they can eventually be equipped with some version of FSD. If you put rear seats (or front seats, I guess) in something that’s like the smaller CyberCab, then I think you’ve got something that could be an attractive and affordable option. Tesla is good at building electric cars at scale and, with lower sales, probably has some capacity to spare.

As with all things Tesla, none of this has been fully green-lit, according to the article. Musk can change his mind, and often does. He could go on his social platform and tell everyone this article is bunk, and that building a new car is like joining the lamp-lighter’s union.

I can’t wait for the next investor day later this month!

Source: Tesla