https://x.com/ZaidJilani/status/1929597031993000037
Tesla executives were alarmed last year when Elon Musk denied a report that the company had killed a planned $25,000 EV, according to people familiar with the matter. Musk posted on X that the report was misleading, minutes after it was published on April 5, 2024. This halted a 6% decline in Tesla’s stock.
The executives knew Musk had, in fact, canceled the low-cost vehicle weeks earlier. They had told employees the project was over, citing sources and company documents. Some senior managers were so confused by Musk’s post, they asked him if he’d changed his mind.
https://x.com/SawyerMerritt/status/1929550679250505911
Musk rejected their concerns and said the project was still dead.
https://x.com/SawyerMerritt/status/1929544861608263968
The executives’ concerns shed light on Tesla’s struggle to deliver a low-cost, mass-market EV, considered a core promise of the company. A year later, Tesla has still not released the low-cost EV that Musk once called pivotal to the company’s future.
Tesla is struggling with a dated lineup and falling sales around the world.
Executive confusion over Musk’s post
On Wednesday, Musk announced he is leaving his role as a special advisor to President Donald Trump to return his focus to his companies, including Tesla.
Weeks after Musk’s post on X, Tesla published an investor update assuring they still planned “new vehicles, including more affordable models.” However, these would be built on current manufacturing lines, not an all-new model as previously stated. Tesla is now working on stripped-down versions of the Model 3 sedan and Model Y SUV. No pricing has been announced and the cars have been delayed to 2025.
After Musk’s denial, executives questioned what they should tell perplexed suppliers and investors. Some worried it would hurt Tesla sales as buyers delayed purchases to wait for a $25,000 Tesla that the company had decided not to build. Some executives were also worried denying the Model 2 cancellation could land Musk in trouble with the SEC for misleading investors.
Musk’s agreement with the SEC requires certain Tesla-related social media posts to be vetted by a lawyer first. Many investors have given up hope for a transformational $25,000 EV from Tesla. The company posted its first annual vehicle sales decline in 2024 and sales were down 13% in early 2025 amid rising competition.
Chinese automaker BYD has outsold Tesla in Europe with affordable EVs.
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