- Tesla is abandoning plans for the $25,000 Model 2 and instead prioritizing faster production of new, more affordable electric vehicles by early 2025 using existing platforms.
- This shift in strategy reflects a focus on cost control and quicker adaptation to a competitive market, while still aiming to deliver on its promise of more accessible electric cars.
Tesla is making a strategic shift in its new vehicle development. The company announced plans to introduce “more-affordable models” by early 2025, prioritizing faster production using existing platforms and production lines. This comes after Tesla reportedly shelved plans for the highly anticipated $25,000 Model 2, which was envisioned as a significant leap forward in manufacturing efficiency.
The new, yet-to-be-detailed vehicles will leverage Tesla’s current manufacturing infrastructure, combining aspects of both current and next-generation platforms. While this approach might lead to slightly higher costs compared to the Model 2, it allows Tesla to adapt to a challenging market environment and potentially control capital expenditures more effectively.
Shifting Gears: Balancing Speed and Cost
This change in strategy signifies a move away from the entirely new production processes envisioned for the Model 2. Analysts believe this signals an indefinite hold on the project. Tesla is prioritizing faster production of new, more affordable models using existing resources.

Robotaxis Still on the Horizon
While details on the new vehicles remain scarce, Tesla did mention plans for a “purpose-built robotaxi product” to be built with a “revolutionary” manufacturing process, without offering a specific release date. The company also continues development of a self-driving robotaxi program, potentially leveraging learnings from the shelved Model 2 platform.
Tesla’s Ambitious Vision: Beyond Electric Cars
During a call with analysts, CEO Elon Musk outlined his vision for Tesla’s future, which extends beyond just being a car manufacturer. He discussed ambitious plans to diversify the company’s business into artificial intelligence, humanoid robots, and operating a vast network of autonomous vehicles. These initiatives, however, rely heavily on software and hardware products that are still under development.
Investor Response: A Cautious Optimism
Tesla’s announcement of new, affordable models received positive reaction from investors despite the company’s weak first-quarter results. The stock price rose significantly in after-hours trading, although some analysts remain cautious. The success of this new strategy hinges on Tesla’s ability to deliver on its promises, considering past delays in vehicle rollouts.
Aligning with Market Trends
The more modest strategy of utilizing existing resources could save Tesla substantial investments in a completely redesigned car and dedicated production lines. This shift aligns with similar decisions by major automakers like General Motors and Ford who are facing slowing growth in electric vehicle demand and rising competition, particularly from Chinese manufacturers.

Tesla’s future success hinges on its ability to navigate this evolving market landscape. While the company faces challenges, the announcement of new, affordable electric vehicles on a faster timeline has injected a dose of optimism for investors and the future of Tesla.