Tesla is In fact bad at this
It’s important to note that, according to Reuters sources, Tesla has not yet greenlighted this new EV for production. And while the idea of small, cheap EVs will appeal to many, the person who needs convincing is CEO Musk, who has grown weary of the idea of running a functioning car company in recent years.
At one time, building an affordable small EV was a core component of Tesla’s plans. Musk said in 2023 that the Model 2 was to be built in “very high volumes”, but by April the following year the Model 2 was finished, despite Musk’s claims that such reports were false. Instead, Tesla has created a stripped-down two-seater for use with robotaxi, based on the Model 3.
Since then, Musk has told anyone who will listen that Tesla is no longer a car company, but one specializing in robotics and AI, which has helped keep the company’s valuation close to the Sun-Earth Lagrange point, despite declining sales worldwide and a growing excess inventory issue.
The company is also having some cash-flow issues: Yesterday, Bloomberg reported that Tesla’s free cash flow is expected to decline from $6.2 billion to -$5.8 billion at the end of 2025, a swing of $12 billion.
Even if Tesla has the money to develop this new model, its track record suggests that the process will be long and laborious. The Model And that’s when Musk was completely focused on the company and not on his SpaceX IPO.
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