Tesla reportedly cancels the budget-friendly EV, the Model 2

Tesla reportedly cancels the budget-friendly EV, the Model 2

ABU DHABI: As per Reuters, Tesla has halted the development of the Model 2, a budget-friendly electric vehicle to prioritize efforts towards coming up with a robo-taxi service due to intense competition from Chinese manufacturers. In late February, a company-wide meeting was held wherein this decision was communicated to employees.

KEY TAKEAWAYS

  • Why has Tesla halted the development of the Model 2 electric car?

    Tesla has halted the development of the Model 2 electric car to prioritize efforts towards coming up with a robo-taxi service and due to intense competition from Chinese manufacturers.
  • What will Tesla come up with in place of the Model 2 electric car?

    Tesla will now use the funds reserved for the production of the Model 2 electric car for the manufacturing of a Tesla robotaxi.
  • To expand plug-in car appeal Musk pledged an affordable electric vehicle worth $22,000. At the 2020 Battery Day of Tesla, he envisioned annual production of up to 20 million of these vehicles, surpassing current output levels of automakers such as Volkswagen, Toyota, and GM.

    Tesla reportedly cancels the budget-friendly EV, the Model 2

    Musk said that the more budget-friendly EV will be based on the next-gen platform of Tesla and is expected to be produced by late 2025 with potential delays. With the new platform at Gigafactory Texas, Tesla emphasized revolutionizing manufacturing. For false statements, Musk criticized Reuters but did not respond to the request of the firm on this issue.

    However, due to intense competition from Chinese automakers, Tesla shifted its strategy. Musk said that without trade barriers Chinese EVs are a threat to domestic automakers. Despite the focus of Tesla on high-end vehicles like the Cybertruck, BYD, a well-known Chinese company surpassed Tesla in the production of electric vehicles. BYD manufactured around 3.02 million electric vehicles in 2023 in comparison to 1.81 million EVs manufactured by Tesla in the same year.

    Tesla will now use the funds reserved for the production of the Model 2 electric car for the manufacturing of a Tesla robotaxi. The automaker is targeting around one million FSD-equipped cars for autonomous driving by mid-2020, though Teslas with FSD require driver attention and are not fully autonomous.

    Also read: Tesla recalls 2 million electric vehicles over autopilot issue

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