Elon Musk Dismisses $25K Tesla EV Plans, Emphasizes Autonomous Future

Tesla Inc. CEO Elon Musk has put an end to the long-standing rumors surrounding a potential $25,000 electric vehicle from the company, signaling a major shift towards an all-autonomous future for Tesla.

What Happened: During Tesla's recent earnings call for the third quarter, Musk firmly rejected the suggestion of creating a traditional $25,000 vehicle, referring to the idea as both "pointless" and "silly" in the context of the company's focus on autonomous vehicle technology.

"I think having a regular $25,000 model is pointless. Yeah. It would be silly. Like, it'll be completely at odds with what we believe," Musk stated during the call.

Instead of pursuing a low-cost traditional vehicle, Tesla is redirecting its efforts towards developing a robotaxi, known as the "Cybercab." This vehicle will be uniquely crafted for autonomous operation and will not include features like a steering wheel or pedals.

"Autonomous, it’s fully considered cost per mile, is what matters," Musk explained, emphasizing that a hybrid manual-automatic vehicle would not match the performance of a fully autonomous car.

Company Goals: Tesla envisions a future dominated by autonomous vehicles, planning to start volume production of the Cybercab by 2026. The target is to produce between 2 to 4 million units annually across various production sites.

"I think it’s going to be very obvious in retrospect… that the future is autonomous electric vehicles," said Musk. He likened non-autonomous gasoline vehicles to riding horses in the modern world, suggesting they will become rare and niche.

As it stands, Tesla is producing around 35,000 vehicles with autonomous capabilities each week. In contrast, competitors like Alphabet Inc.'s Waymo operate a fleet of under 1,000 cars, illustrating Tesla's significant production edge.

Why It Matters: Even though Musk has dismissed the idea of a $25,000 conventional vehicle, Tesla is still committed to introducing a more budget-friendly option in the first half of 2025. Musk indicated this vehicle would be priced below $30,000, considering potential incentives, but it will also be designed to support autonomous driving.

The company is also gearing up to launch its robotaxi service in Texas and California in the coming year, with Texas likely moving faster due to its less stringent regulatory landscape.

This move comes as Tesla continues to be one of the few profitable electric vehicle manufacturers around the world. Musk pointed out during the earnings call that he is not aware of any profitable EV divisions in other auto companies.

This strategic shift demonstrates Tesla's strong belief in its self-driving technology, with expectations that its Full Self-Driving system will exceed human safety standards by the second quarter of 2025.

Tesla, Musk, Autonomous