Tesla CEO Elon Musk hasn't always prioritized the $25,000 electric car he's promised.
Musk has long been more interested in a robotaxi, Musk's biographer Walter Isaacson told Axios.
Tesla executives have convinced Musk to do both.
Despite years of promises, Tesla CEO Elon Musk hasn't always prioritized the game-changing $25,000 electric car.
Musk has instead been hung up on developing an all-new robotaxi, Walter Isaacson, Musk's biographer, shared in an excerpt of his upcoming book with Axios — but company executives have since convinced Musk to prioritize both that and the inexpensive EV.
The Tesla chief told company executives in November 2021 that someday, he'd want to build "20 million" self-driving robotaxis annually and predicted owners would earn upwards of $30,000 a year giving driverless rides to others, Axios reported.
For over a year, Musk wanted these robotaxis to forgo mirrors, pedals, and steering wheels despite protests from his leadership team and concerns over whether Tesla's Full Self-Driving tech would be ready.
Eventually, those executives set Musk on track to build both the robotaxi and the affordable EV offering under the premise they could share the same assembly lines, according to Axios' recount.
In a design review session earlier this year, mockups of both the robotaxi and the $25,000 EV had a futuristic design not unlike the long-awaited Cybertruck.
But Musk has a complicated history regarding his promises about building a $25,000 EV. In Tesla's early days, Musk's first Master Plan was to use money earned from more expensive models like the Roadster and Model S to fund cheaper ones, according to Axios. The Model 3 was intended to be Tesla's most affordable option, but it debuted at $52,000 instead of the initially anticipated $35,000, Axios reported.
In 2018, Musk said it would take his company about three years to get to $25,000. In 2020, he again promised an EV at that price — this time, one that was fully autonomous — in another three years' time.
By early 2022, Musk told investors that the company wasn't actually working on it. He said at the time Tesla had too many other things on its plate, including a humanoid robot.
That wavering has paved the way for other EV makers to race to meet that target price point. Electric cars have largely, on average, been more costly upfront than internal combustion engine ones, one major barrier to widespread adoption for many consumers. In July, EVs saw an average transaction price of $53,469, according to Kelley Blue Book, down significantly from $65,108 a year earlier, though higher than the $48,334 average for vehicles overall.
EV prices are coming down as automakers scale, and there are some affordable plug-in models out there — not to mention, the used EV market is starting to take off — but it's still top of mind for many to reach the coveted $25,000 mark. EV affordability is becoming more and more crucial as the industry shifts from selling to early adopters to targeting a less enthusiastic wave of buyers.
Tesla rival Lucid has discussed similar plans as Tesla to scale enough in order to bring costs down for buyers. Volkswagen unveiled a close contender, the roughly $26,000 ID.2all concept, but that won't ever make its way to the US.
More recently, experts said Tesla's plans to build in Mexico could be its golden ticket to bringing a $25,000 car to the masses.
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