The thought of a $25,000 Tesla has persevered for years — partially, maybe, as a result of CEO Elon Musk mentioned he was “very assured” the corporate might do it at an occasion in 2020.
However on Wednesday night time, throughout Tesla’s third-quarter earnings name, Musk mentioned the thought of a $25,000 automotive with a steering wheel and pedals is “pointless,” and “foolish.” He mentioned he solely needs to promote one automotive at that value: the “Cybercab” robotaxi he revealed a prototype of two weeks in the past.
It was the most recent in an extended line of private and non-private flip-flopping from Musk, a course of that has so muddied the waters about Tesla’s future product portfolio that a few of his firm’s most ardent supporters have confidently and wrongly proclaimed that the thought of a drivable $25,000 Tesla — with a steering wheel and pedals — by no means existed.
Nevertheless it did. Right here’s how we obtained right here.
Battery Day
Musk surfaced the thought of a $25,000 Tesla in 2020 on the firm’s so-called “Battery Day” occasion. It was a showcase of the brand new in-house battery cells Tesla was engaged on, which had been bigger and extra vitality dense. These developments had been supposed to assist drive down the price of the most costly piece of any EV, the battery pack. And they’d allow Tesla to promote a automotive for $25,000, Musk mentioned.
“I believe in all probability three years from now we’re assured we are able to make a really compelling $25,000 electrical car, that’s additionally totally autonomous,” he mentioned.
You possibly can take that one in every of two methods. Both he meant the automotive can be a robotaxi just like the Cybercab, with no steering wheel or pedals. Or he was speaking a couple of automotive with a wheel and pedals that, like he has promised about all different Teslas, would at some point obtain a software program replace that made it autonomous. For what it’s value, Musk reportedly was not sure about whether or not it will or wouldn’t be manually drivable in a September 2021 assembly.
Nevertheless it’s not value spending time arguing what precisely Musk meant. As a result of his personal biographer came upon.
Two vehicles
Musk introduced in January 2022 that Tesla was “not at present engaged on the $25,000 automotive,” saying on the time that Tesla nonetheless deliberate to do it, however that the corporate had an excessive amount of on its plate. He additionally mentioned that making Tesla’s vehicles autonomous was extra essential than designing a automotive for that value level.
Musk’s biographer, Walter Isaacson, came upon what occurred subsequent. In his biography, Isaacson describes that Musk and his high lieutenants spent months hashing out whether or not to pursue the robotaxi thought, or a extra conventional automotive.
Isaacson describes Tesla’s chief designer Franz von Holzhausen making an attempt to persuade Musk in an August 2022 assembly that making a automotive with no steering wheel or pedals was dangerous if the corporate couldn’t get its Full Self-Driving software program prepared in time.
“He instructed that they make a automotive that had a steering wheel and pedals that may very well be simply eliminated,” Isaacson wrote of von Holzhausen’s pitch. Right here’s what adopted:
“No,” Musk mentioned. “No. NO.” There was an extended pause. “No mirrors, no pedals, no steering wheel. That is me taking duty for this resolution.”
The executives sitting across the desk hesitated. “Uh, we are going to come again to you on that,” one mentioned.
Musk obtained into one in every of his very chilly moods. “Let me be clear,” he mentioned slowly. “This car should be designed as a clear Robotaxi. We’re going to take that threat. It’s my fault if it f—s up. However we aren’t going to design some kind of amphibian frog that’s a midway automotive. We’re all in on autonomy.”
However von Holzhausen and Tesla engineering VP Lars Moravy didn’t drop the thought of a manually drivable automotive — if solely as a result of they noticed it as a hedge to the danger that Tesla would both be sluggish to get the software program proper, or that it will run into regulatory purple tape.
So that they saved engaged on the extra conventional design in secret.
In September 2022, in line with Isaacson, von Holzhausen and Moravy satisfied him that the best method was to develop each automobiles. Musk was initially not thrilled, as Isaacson tells it. However by February 2023, when von Holzhausen confirmed Musk fashions of “the Robotaxi and the $25,000 automotive subsequent to one another within the studio,” Musk “cherished the designs.”
“The brand new mass-market car, each with a steering wheel and as a Robotaxi, turned often called ‘the following era platform,’” Isaacson wrote.
The report
The concept that Tesla was constructing two totally different automobiles on this next-generation platform held for a couple of yr, till Reuters printed a bombshell story in April 2024: Tesla had scrapped plans to construct a manually okoperable $25,000 automotive in favor of simply pursuing the robotaxi.
It appeared Musk had flipped once more. In response, he claimed — with out providing proof — that Reuters was “mendacity.” However a couple of weeks later when Tesla launched its quarterly outcomes, the corporate tacitly admitted the report was proper.
Tesla confirmed in that quarter’s shareholder letter that it was nonetheless pursuing a robotaxi design. Nevertheless it additionally mentioned it was engaged on “new automobiles, together with extra reasonably priced fashions” that will “make the most of elements of the following era platform in addition to elements of our present platforms, and can have the ability to be produced on the identical manufacturing traces as our present car line-up.” It is a very totally different plan from the $25,000 automotive that that Musk authorized in February 2023, in line with Isaacson.
To this present day, the corporate has not defined what these new fashions will appear like. Some have speculated that Tesla is creating even-more-pared-down variations of the Mannequin 3 and Mannequin Y. What appears clear from subsequent earnings releases is that Tesla is engaging in these additional price reductions through the use of concepts from the next-generation platform — concepts that had been meant for the $25,000 automotive that was going to be constructed on that platform — and constructing them on current manufacturing traces.
How low is Tesla making an attempt to go together with these price reductions? The corporate hasn’t mentioned, and it not has a public relations division. The Mannequin 3 at present begins at round $42,000. Musk now says a $25,000 automotive is “foolish” and “pointless.” Possibly lastly delivering a automotive on the long-promised $35,000 price ticket that the Mannequin 3 was imagined to promote at is a extra severe thought.
Regardless of the reply winds up being, simply keep in mind this the following time anybody questions it: Tesla actually was at one level engaged on a $25,000 automotive with a steering wheel and pedals.
