Elon Scraps “Tesla Model 2” In Favour Of Autonomous Tech & Robotaxi’s

Both Elon Musk and Reuters are now in a tussle over who is stating the fact as both parties' statements only result in fluctuating Tesla’s stock value.

Reuters claimed that Tesla is discontinuing its long-promised budget-friendly option, the Tesla "Model 2," also known internally as Model H422/NV91. According to Reuters’ sources inside Tesla, Elon has halted the budget offering in order to focus on developing the self-driving robotaxi. Elon however has openly denied Reuters claims on X (formerly knows as Twitter). 

This "Model 2”, expected to be Tesla's response to the deluge of Chinese low-cost offerings, was planned to start at US$25,000 (RM119,000) and go into production late 2025. However, with intense price competition from the Chinese, Elon appears to be unwilling to engage in the price war, instead focusing solely on the autonomous robotaxis, which poses a stiffer and more challenging engineering and regulatory risk.

Self-driving tech has not been permitted for public use in most countries, including Malaysia, despite being offered as an added cost feature with the promise of future availability (imagine paying now for something you could "potentially" use later). Only the United States and China authorise this technology, which is limited to experimental applications.

Reuter also stated that it has received internal messages from programme management confirming the termination of the budget offering. The wire claims it includes a provision to not notify all vendors of the cancellation.

Elon has always championed autonomous vehicles as the mobility of the future, but he has made multiple changes to his product plans in response to changing market conditions. The Cybertruck, which will premier in Malaysia this coming Monday for one, was a pricy venture just to prove a point in which he himself admitted is a challenge to manufacture in volume.

Although Elon's vision is always changing, particularly in regards to the cost of the product for the general public, Tesla project engineers have been told to record all results so as to avoid wasting past work on follow-up projects. There are also rumours that some of the engineers were moved around.

Furthermore, these sudden shifts in plans had also resulted in a year-on-year deliveries drop of 8% while BYD had gained 13%. BYD had over the years gained substantial market share as its EV sales rose to 1.5 million units excluding its PHEV & Hybrid offerings with its cheapest EV going for a mere US$10,000 (RM47,000) in China.