Tesla has long been at the forefront of the electric vehicle (EV) revolution. Over the years, CEO Elon Musk has spearheaded ambitious projects such as the Tesla Solar Roof, Tesla Bot, The Boring Company, and the Cybertruck. These initiatives aimed to secure Tesla’s dominance in the market and generate future revenue.
However, many of these ideas have faced delays, unmet promises, or limited success. Among them, the $25,000 Model 2 stood out as Tesla’s most promising but ultimately abandoned project.
The Vision of the $25,000 EV
Dubbed the “people’s EV,” the Model 2 was expected to do for Tesla what the VW Beetle did for mass-market automobiles. Priced at $25,000, it was set to make sustainable transport accessible to the working class, driving the EV revolution forward. Its affordability would not only democratize EV ownership but also open Tesla to billions in potential revenue.
Musk teased the Model 2 multiple times over the years, with leaked plans and announcements fueling public anticipation. The vehicle was expected to cost significantly less than the Model 3 while maintaining Tesla’s performance and quality standards. Experts believed it could compete with traditional internal combustion engine vehicles and rival EVs in the same price range.
Why Did Tesla Abandon It?
Despite its potential, Musk officially shelved the project. One reason could be Tesla’s challenges in reducing manufacturing costs. Building a smaller EV at a $25,000 price point would require breakthroughs in battery technology and production efficiency. Tesla’s 4680 battery, which was crucial for cost reduction, has faced delays and scalability issues.
Additionally, the company may have prioritized higher-margin vehicles, such as the Cybertruck and second-generation Roadster, over an entry-level EV. The growing competition in the EV market also pressured Tesla to maintain its premium brand image rather than dilute it with cheaper models.
Implications for Tesla’s Future
Abandoning the Model 2 could impact Tesla’s growth in emerging markets and among budget-conscious buyers. Competitors like BYD and Nissan are already targeting the affordable EV segment, potentially leaving Tesla out of a crucial market.
While Tesla continues to lead in innovation, the decision to scrap the Model 2 raises questions about its ability to balance ambition with feasibility. The missed opportunity could haunt Tesla as the global EV race heats up.
Reference- The Verge, Tesla website, Electrek, Inside EVs, Teslarati, Reuters