Tesla’s $25K EV Plan Remains Uncertain Amid Musk Denial and Internal Disarray

Tesla’s long-rumored $25,000 electric vehicle—widely referred to as the Model 2—remains in limbo more than a year after CEO Elon Musk publicly denied reports of its cancellation. According to a Reuters investigation, some senior Tesla executives were surprised when Musk posted “Reuters is lying” on X in April 2024, rebutting the claim that the project had been scrapped. His denial briefly halted a 6% slide in Tesla (NASDAQ: TSLA) stock, though shares still closed the day down 3.6%.

At the time of Musk’s post, internal Tesla communications had already informed employees that the budget EV project was shelved. Sources and internal documents cited by Reuters indicate that Musk had shifted strategic focus to autonomous robotaxis instead. His public contradiction reportedly confused even top-level managers, some of whom asked whether he had reversed his decision. Musk, however, confirmed to them that the entry-level EV project remained canceled.

This episode underscores the uncertainty around Tesla’s ability to deliver a low-cost mass-market EV—seen by many investors as key to the company’s long-term growth. Despite ongoing speculation, Tesla has not included a $25K model in its official roadmap, while its current vehicle lineup faces aging demand.

The confusion also highlights Musk’s often unpredictable communication style and Tesla’s fluid product strategy. While some insiders were unsettled, others noted such shifts align with the company’s dynamic approach to innovation.

Adding to the intrigue, Musk recently announced he would step down from his advisory role to former U.S. President Donald Trump to focus on Tesla and SpaceX, potentially signaling renewed attention to stalled projects.

The affordable EV remains one of the most anticipated—and uncertain—developments in Tesla’s future plans.