As per some recent reports, Tesla has decided to cancel its plans to develop a new entry-level electric vehicle (EV). The company had been actively working on a “low-cost family car” project, often referred to as the Model 2, with plans to commence production in early 2025. However, internal communication revealed a sudden halt in activities related to the project, codenamed H422/NV91, leaving the fate of the anticipated model uncertain.
Reasons for Cancellation
While the exact reasons behind Tesla’s decision remain undisclosed, internal messages suggested a need to cease all further work on the project. The move came as a surprise to many, especially considering the company’s earlier announcements regarding the Model 2’s development and positioning below the existing Model 3, with an estimated starting price of $25,000. Tesla’s decision reflects potential challenges or shifts in strategy amid fierce competition in the EV market.
Competition and Market Dynamics
Tesla’s cancellation of the entry-level EV project coincides with increasing competition from Chinese EV manufacturers, particularly BYD. While Tesla reported an 8% annual decline in deliveries, BYD, its Chinese counterpart, announced a 13% gain during the same period. This shift in market dynamics underscores the intense competition in the EV industry and may influence Tesla’s future product development.
In recent news, Tesla CEO Elon Musk announced via his official X handle that Tesla will unveil Robotaxi globally on August 8. With features such as a steering-free design and fully autonomous taxi service, Tesla’s Robotaxi is expected to have the potential to redefine urban commuting and revolutionize traditional transportation methods.
