Musk denies Tesla has scrapped entry-level EV

ELON MUSK has denied that Tesla has axed plans for an entry-level electric car to compete with a wave of cheap Chinese rivals.

Tesla shares dropped by 6pc after Reuters yesterday reported that the company had shelved plans to produce a cheaper electric vehicle (EV) and would instead focus on building driverless robotaxis.

In messages seen by Reuters, engineering staff working on the entry-level car were thanked for their work and asked to document what they had learnt. A manager wrote:

“We would not want all our hard work to go to waste, so it’s important that we tie things off and document things properly.”

However, Mr Musk suggested the project had not been abandoned, writing on his social media platform X, formerly Twitter: “Reuters is lying (again).”

Mr Musk also appeared to endorse comments by an investor who suggested that Tesla was “shifting even more resources” to its robotaxi rather than cancelling its affordable car.

The billionaire replied to a message from the Tesla investor Sawyer Merritt on X with an emoji of two wide eyes, typically used to signal that people

‘We would not want all our hard work to go to waste so it’s important that we tie things off’

should look at something. Mr Musk has long touted efforts to develop autonomous Tesla taxis but has missed selfimposed deadlines. The billionaire said at an investor event in 2019 he was “very confident predicting autonomous robotaxis for Tesla next year”.

Two years ago he said that creating self-driving cars was “really the difference between Tesla being worth a lot of money and being worth basically zero”.

The stock has been under pressure all year amid rising competition from China and is down 33pc since the start of the year. The fall comes after Tesla was briefly toppled as the world’s best-selling electric vehicle in the final quarter of 2023. Tesla had been the world’s biggest electric vehicle manufacturer since 2015 but was overtaken by China’s BYD, which has been pushing into the UK, Europe and America.

Mr Musk’s company has since reclaimed its manufacturing crown in the first quarter of 2024.

BYD is one of several Chinese EV makers flooding Western markets with cars priced as low as £8,000.

Mr Musk told investors in January that Tesla would start production of an entry-level car, expected to start at around £20,000, at its Texas factory in the second half of 2025.

Tesla was approached for comment.