Analysis-Wall Street wants answers from Musk on Tesla's affordable car

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Reuters Report,Tesla,Wedbush Securities

Elon Musk has kept investors hanging since he issued cryptic social posts following an exclusive April 5 Reuters report that Tesla had scrapped its plans for...

- Elon Musk has kept investors hanging since he issued cryptic social posts following an exclusive April 5 Reuters report that Tesla had scrapped its plans for a $25,000 “Model 2” electric vehicle.Nearly two weeks later, with no concrete updates from Musk, Tesla investors are restless. Some are demanding clear answers on the Model 2, along with Musk’s plans for arresting a sales slide amid falling electric-vehicle demand globally and rising competition from cheap Chinese EVs.

Another Musk post that same day raised as many questions as answers: “Tesla Robotaxi unveil 8/8,” he wrote, implying some version of the self-driving vehicle might be ready by August, but giving no details. Industry experts call the notion that Tesla will quickly produce a road-ready robotaxi unlikely, given the steep engineering and regulatory challenges.

The April 5 report on the Model 2 cited four sources with knowledge of Tesla’s strategy and company messages describing the project’s termination. Company messages reviewed by Reuters show a person described by a source as a Model 2 program manager telling employees not to inform suppliers “about program cancellation.”

Musk had said as recently as January that Tesla would deliver the Model 2 in the second half of 2025, confirming an exclusive Reuters report on those plans. “For the company to do a 180 in the course of three months would be ‘Twilight Zone,’” said Ives, of Wedbush. Tesla, Ives said, was already late in launching the development of the long-promised affordable model.Currently, the cheapest Tesla is the Model 3 sedan, which sells at a U.S. price of about $39,000.

That elusiveness, combined with Musk’s subsequent “robotaxi unveil” post, leads Munster to believe Tesla is in fact shelving the Model 2 to focus on a robotaxi – a strategy he applauded. Munster called the move “brilliant” and “gutsy” because it could vault Tesla to the next generation of transportation. Autonomous vehicles, he said, will be “a higher-margin business by orders of magnitude.”

Reuters Report Tesla Wedbush Securities

 

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