Musk’s Vision for Tesla’s Future Centers on Robotaxis Over Mass-Market EVs

Tesla Shifts Away from Promised $25,000 EV, Musk Suggests Robotaxi-Focused Strategy

In April, after Reuters reported that Tesla had halted plans for a long-promised $25,000 electric vehicle, Tesla’s stock took a hit. CEO Elon Musk promptly reacted on his social media platform, X, by accusing Reuters of “lying,” without further clarification, helping Tesla shares recover some losses.

However, six months later, Musk implied Tesla indeed moved away from a human-driven, affordable EV. In an October 23 earnings call, Musk called the concept of a $25,000 car “pointless” unless it was fully autonomous. When an investor asked when Tesla would release a human-driven $25,000 model, Musk began to reply, “We’re not making a non-robo…” but was interrupted by another Tesla executive. Musk continued, explaining that a $25,000 non-robotaxi model would be “silly.”

The April Reuters article revealed Tesla’s shift from a low-cost, mass-market EV to focus on a self-driving robotaxi model. Since then, Musk has emphasized autonomous vehicle ambitions. Tesla did not respond to Reuters’ requests for comment on the story.

During the October earnings call, Musk clarified that Tesla still intends to make a “$25K car” but as a fully autonomous vehicle, the “Cybercab.” Unveiled at an October 10 Hollywood-style event, the Cybercab is a compact, two-door, two-seat EV. Production is slated to start in 2026, following Tesla’s release of autonomous versions of its Model 3 and Model Y in Texas and California next year.

This pivot to autonomous vehicles marks a change in Tesla’s original strategy to offer an affordable, mass-market EV for human drivers, previously essential to its aim of becoming the world’s largest automaker. Tesla initially set a target of producing 20 million vehicles per year by 2030, significantly more than its current output and nearly double that of Toyota, the current global leader. In May, Tesla removed this goal from its latest impact report on sustainability progress.

Earlier this year, Musk reaffirmed plans for a new affordable EV, expected to launch in 2025 as part of a “second growth wave,” following Tesla’s success with the Model 3 and Model Y in 2017 and 2020, respectively. Enthusiasts often referred to this anticipated affordable model as “Model 2,” which would be priced lower than the current Model 3, Tesla’s least expensive car at $42,490.

In January, Musk highlighted that the new model would require “revolutionary manufacturing technology.” But by April, Musk shifted plans, proposing “more affordable” cars built on Tesla’s existing manufacturing lines. Seth Goldstein, an analyst with Morningstar Research Services, believes Tesla adjusted its strategy due to competitive pressure from Chinese EV makers, planning to offer more affordable models on current platforms priced around the mid-$30,000s.

In response to the April 5 Reuters report about the canceled Model 2, Musk announced an “August robotaxi unveil” on X, later rescheduled to October and held on a movie set in Los Angeles. Wall Street’s underwhelmed response to the Cybercab reveal led to a 9% drop in Tesla’s stock the following day. Investors criticized the event for lacking concrete details, even though Tesla also showcased a “Robovan” autonomous concept and humanoid robots.

Analysts questioned the Cybercab’s design—its two-door, two-seat setup puzzled those expecting a robotaxi with more capacity. Musk described the Cybercab as optimized for autonomy and budget-friendly, stating, “It will cost roughly $25K… It just won’t have a steering wheel and pedals.”

Tesla has not disclosed if the Cybercab will feature any advanced self-driving tech beyond its current Full Self-Driving system, which still requires human supervision. Musk’s pivot reflects Tesla’s focus on robotaxi innovations while moving away from a human-driven $25,000 EV.

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