Get all your news in one place.
100’s of premium titles.
One app.
Start reading

Tesla stock seesaws as Musk denies report cheap EV will be scrapped

Tesla's stock partially recovered from a sharp drop in midday trading Friday after CEO Elon Musk refuted a report that the company is killing off a long-planned affordable electric car.

Why it matters: Tesla and other automakers need to make affordable, mass-market electric cars in order to stay competitive — especially with cheaper Chinese EVs knocking on America's doorstep.


Driving the news: Tesla is canceling its plans to build a Model 2 sedan, Reuters reported, which many believed would start around $25,000, compared to around $40,000 for today's Model 3.

  • Instead, Tesla CEO Elon Musk reportedly wants to go all-in on robotaxis, which he has long seen as one of Tesla's ultimate goals.
  • The Reuters report was based on "three sources familiar with the matter and company messages" seen by the news agency.
  • Musk responded to the report on X by claiming Reuters was "lying."

By the numbers: Tesla's stock plunged by around 6% when the Reuters report dropped, recovered most of those losses after Musk's denial, then slid again to finish the day down 3.6%.

Context: The Reuters story was the latest in Tesla's no good, very bad week, coming after disastrous first-quarter vehicle delivery numbers.

Between the lines: The entire American automotive industry is freaked out about cheap Chinese EVs, Axios' Joann Muller has reported.

  • They're not yet for sale in the U.S., but that appears inevitable — despite Washington's efforts to keep them at bay.

Reality check: Tesla's current driver-assist technology is far from perfect, with some users reporting erratic and sometimes dangerous behavior.

  • Other robotaxi companies have been finding the road harder than envisioned.
  • GM-owned Cruise, for example, is undergoing a painful retrenchment after one of its vehicles was involved in an incident that left a pedestrian badly wounded.
  • Some local officials, meanwhile, have turned skeptical of robotaxis, though others are still rolling out the welcome mat.

💬 Our thought bubble: Whether or not the Reuters story is true, imagine where Tesla would be today if it had prioritized cheaper EVs rather than the Cybertruck — which seems destined for the "ambitious failure" wing of the proverbial automotive history museum, along with the likes of the DMC DeLorean.

The bottom line: Cheap EVs are hard for American companies to make, especially with China still controlling so much of the supply chain. But they're simply table stakes these days.

Sign up to read this article
Read news from 100’s of titles, curated specifically for you.
Already a member? Sign in here
Related Stories
Top stories on inkl right now
One subscription that gives you access to news from hundreds of sites
Already a member? Sign in here
Our Picks
Fourteen days free
Download the app
One app. One membership.
100+ trusted global sources.