The concept of a $25,000 Tesla has lingered in discussions for years, largely fueled by CEO Elon Musk’s confident assertions at a 2020 event.
However, during Tesla’s recent earnings call, Musk dismissed the idea of a $25,000 car equipped with a steering wheel and pedals as “pointless” and “silly,” emphasizing that the only vehicle he envisions at that price is the Cybercab robotaxi prototype unveiled weeks prior.
This back-and-forth from Musk has led to confusion regarding Tesla’s product future, with some of the company’s staunch supporters incorrectly claiming that the $25,000 vehicle idea never existed. Yet, it did—here’s how we arrived at this point.
The Origin: Battery Day
Musk first introduced the notion of a $25,000 Tesla during the 2020 “Battery Day,” where he showcased new in-house battery technology aimed at reducing the cost of electric vehicles (EVs).
He asserted that advancements in battery efficiency would enable Tesla to produce a compelling electric vehicle priced at $25,000 within three years, potentially autonomous.
The interpretation of Musk’s words was ambiguous: was he suggesting a robotaxi with no manual controls, or a traditional car that could eventually receive an autonomous upgrade? Musk himself expressed uncertainty on the matter in subsequent meetings.
The Shift in Focus
In January 2022, Musk clarified that Tesla was “not currently working on the $25,000 car,” citing the need to prioritize autonomy over budget-friendly models.
His biographer, Walter Isaacson, reveals that discussions among Tesla executives revolved around whether to pursue a fully autonomous robotaxi or a conventional vehicle.
Musk ultimately decided against a manually drivable option, stating, “This vehicle must be designed as a clean Robotaxi.”
Despite Musk’s decision, key designers continued to explore a traditional vehicle concept as a backup plan.
A Dual Approach
By September 2022, discussions shifted again. Musk was presented with designs for both the Robotaxi and the $25,000 car, and by early 2023, he expressed enthusiasm for both models.
This led to the development of a “next-generation platform” intended for mass-market vehicles, which would include both traditional and autonomous options.
However, this plan changed once more in April 2024, when Reuters reported that Tesla had abandoned the manual car project entirely. Musk dismissed the claim, but Tesla’s later disclosures indicated a pivot back to a singular focus on the robotaxi.
Current Status and Future Prospects
As of now, Tesla maintains that it is developing new vehicles, including more affordable models, utilizing aspects of both the next-generation and current platforms.
Yet, the specifics remain unclear. There’s speculation that Tesla might be refining versions of the Model 3 and Model Y while working toward cost reductions that hearkened back to the $25,000 car plans.
Interestingly, Tesla’s lowest-priced Model 3 currently starts at around $42,000, and Musk has branded the $25,000 car as “silly.” The idea of delivering a Model 3 at the previously promised $35,000 price point may now seem more viable.
In summary, it’s essential to recognize that Tesla did once seriously consider a $25,000 vehicle with a steering wheel and pedals. The journey to where Tesla stands today reflects a series of shifts in strategy, driven largely by Musk’s evolving vision.
