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HomeBusinessFierce Chinese rivals force Elon Musk-led Tesla to junk affordable car plans

Fierce Chinese rivals force Elon Musk-led Tesla to junk affordable car plans

Fierce Chinese rivals force Elon Musk-led Tesla to junk affordable car plans


Billionaire Elon Musk-led electric car company Tesla had major plans to create a cheap car, but now the company has literally been forced to junk all those plans and shift focus elsewhere – to developing self-driving taxis instead. Notably, Chinese electric car manufacturers are selling cars at much lower prices. In fact, Chinese EVs are going at just around $10,000, Reuters reported.

Billionaire Elon Musk-led Tesla scraps cheap car plans in the face of the onslaught by nimble Chinese rivals. Teslas ambitious sales goal likely dumped.(REUTERS)

A number of analysts reacted to the news today. Among them was Dan Ives, Analyst at Wedbush Securities, and Reuters quoted him as saying, “This would be a dark cloud moment for Tesla. Would be a nightmare if this was scrapped. This would be a major gut punch for the Tesla bull thesis over the next few years.”

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This is a significant retreat for Musk who had been promising an affordable car for quite some time. The idea was to make electric cars accessible to more people and perhaps expand successfully through it globally. However, Tesla’s cheapest car currently available, the Model 3, still comes with a hefty price tag of around $39,000. The planned cheap car, perhaps to be named or referred to as Model 2, was expected to be priced at about $25,000.

From making cheaper cars, Tesla is shifting its focus to developing self-driving taxis. Musk has indicated that these taxis will play a crucial role in the future of transportation. This decision was finalized sometime in February.

So, what happens to Musk’s ambitious growth plans that had targeted selling of 20 million cars by 2030. The cancellation of a mass consumer vehicle means it is unlikely to happen.



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