Tesla Cancels Budget-friendly, $25,000 Model 2 EV—Why?

A new report claims that the Tesla Model 2, the company's supposed budget electric vehicle worth $25,000, has been canceled, and it is no longer developing it.

This was the touted offshoot of the Model Y, featuring a cheaper version of the company's famed electric car. The report claimed that company messages suggested that it was scrapped.

However, this may not be the full story yet, as Tesla CEO Elon Musk posted on X earlier today about the news agency that reported this is "lying," but in more of a general attack against them and not on this specific report.

Tesla Cancels Model 2 Budget $25,000 EV—Why?

Reuters reported that Tesla had already canceled Model 2, the promised budget electric vehicle worth $25,000, which was originally promised for 2023.

Internal company messages reportedly reviewed by Reuters claimed that the company had already scrapped the development of this particular EV.

Initially, Musk revived the talks behind it internally in December 2023 as part of its long-term master plan to deliver a low-cost electric car.

Moreover, it was further corroborated by Ars Technica that a report from March 2024 had Musk addressing Tesla employees about Model 2's production starting in Gigafactory Berlin.

However, Reuters said the decision to cancel the Model 2 came up in late February.

Elon Musk Claimed Reuters Is Dying

A previous post on X by Musk reposted a claim by DogeDesigner, which said, "Reuters is lying because Reuters is dying."

The Tesla CEO said that "Reuters is dying," seemingly agreeing with the post.

However, Musk did not address anything about the Model 2 despite this jab against Reuters.

Tesla's Cheaper EV Promises

Tesla's chief executive has been its top marketer and advertiser online. He revealed plans for the company in the future, particularly with cheaper electric vehicles.

Last year, he talked about how the next-gen Tesla electric cars could be 50 percent cheaper compared to how much they are at that point, but the catch is there would be significant quality and size changes to the car, its batteries, and a Mexico-based factory.

Back in 2021, there was also a report about Musk's plans to bring a $25,000 electric vehicle, which was dubbed the "Model 2," to the market, which would bring a budget version of its renowned lineup.

However, this was touted to have no steering wheels, relying solely on Tesla's Full-Self Driving, and said to be a smaller EV, which was also reportedly to be developed in China.

That being said, the Model 2 was also said to be coming by 2023, but the year has passed, and there have been no announcements or confirmations from Tesla or Musk regarding the EV.

Presently, a report from Reuters claimed that, according to internal messages, Model 2 was scrapped, but following this, Musk took a jab against the news agency for their lies, not mentioning anything about the Tesla budget EV.