In a surprising move, Tesla CEO Elon Musk has definitively shut down speculation about a long-rumored $25,000 traditional electric vehicle. During the company’s third-quarter earnings call, Musk labeled the idea of a conventional $25,000 car as “pointless” and “silly”, highlighting the company’s commitment to an all-autonomous future.
This announcement represents a strategic pivot for Tesla, signaling its unwavering belief in the potential of autonomous driving technology. Instead of pursuing a more affordable, traditional car, Tesla is dedicating its resources to the development of its robotaxi vehicle, aptly named the ‘Cybercab’. This vehicle is designed exclusively for autonomous operation, eliminating the need for a steering wheel or pedals. The company emphasizes that autonomous vehicles are more efficient and cost-effective in the long run, particularly when considering cost per mile.
Musk’s vision for the future is clear: he believes that autonomous electric vehicles will dominate the automotive landscape. Tesla plans to begin mass production of the Cybercab in 2026, with ambitious targets of producing 2-4 million units annually across multiple factories. Musk went so far as to compare non-autonomous gasoline vehicles to horseback riding and using a flip phone, highlighting their eventual obsolescence in a world driven by autonomous technology.
To solidify its dominance in the autonomous driving space, Tesla is already producing approximately 35,000 autonomous-capable vehicles per week. This production volume significantly outpaces competitors like Alphabet’s Waymo, which currently operates a fleet of less than 1,000 vehicles.
While the traditional $25,000 car has been scrapped, Tesla still plans to introduce a more affordable vehicle in the first half of 2025. This vehicle, expected to be priced “sub-30k” with incentives, will nonetheless be designed with autonomous capabilities in mind, aligning with the company’s broader strategy.
In parallel with this strategic shift, Tesla is also preparing to launch its robotaxi service in Texas and California next year, pending regulatory approval. Texas is expected to move faster due to its less stringent regulatory requirements.
This bold move underscores Tesla’s confidence in its autonomous driving technology. The company is predicting that its Full Self-Driving system will surpass human safety levels by the second quarter of 2025. This commitment, combined with Tesla’s profitability within the electric vehicle market, paints a clear picture of the company’s ambitious future, driven by the promise of autonomous technology.
