Elon Musk's Tesla abandons affordable 'Model 2', shifts focus on autonomous robotaxis

Following this development's emergence, Tesla shares dropped over 6%
An undated image displaying
An undated image displaying 

Elon Musk-owned world-class electric vehicle (EV) manufacturer has abandoned the productions of long affordable model which made key investors expect fostered growth and sales from the outcome. 

Citing sources familiar with the matter, Reuters reported that this indicates the cancellation of long-rumoured project of the company which Musk often called to be his primary objective to make affordable electric cars for the masses.

The multi-billionaire has also ventured into a similar project back in 2006, when he sought the development of luxury models to spend its profits on the production of “low cost family car.” 

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Since then, an inexpensive electric car is what Musk has been promising to investors. A validating account of this is that in January this year, The informed investors about finalised plans to commence the production of an affordable EV at its Tesla factory by 2025.

The most affordable of the leading EV maker is the Model 3 sedan, which is sold for almost $39,000 in the States. On the other hand, the ditched project could have led to a cheaper model — reportedly described as Model 2 — costing around $25,000.

Tesla driverless robotaxis

Derailing from the affordable Model 2, the company has shifted its entire focus on the development of fully autonomous robotaxis.

While this remarkable derailment comes on the heels of tough competition from Chinese EV makers flooding the market with cars for as low as $10,000, Tesla's plan for driverless robotaxis poses great engineering challenge and more regulatory risk, leading to delayed delivery of the service.

Tesla stocks dropped

Following this development's emergence on the scene and publications, Tesla shares dropped over 6% but recovered a bit owing to Elon Musk taking to his social media platform X, formerly known as Twitter, and terming publications' reports false. Tesla stocks were down 3.6% at the closing session on Friday.

The Tesla boss further wrote on X, "Tesla Robotaxi unveil on 8/8," straightening the stocks' posture in the trading session followed.