Elon Musk brands Reuters article a lie over low-cost car scrapped claims

Elon Musk, the head of Tesla and SpaceX, has lashed out at Reuters after the news outlet claimed that Tesla has scrapped its low-cost car plans due to competition from Chinese companies. Musk took to X after this to say that Reuters was lying despite four sources confirming the info to Reuters.

Following his initial post, Musk shared a post from DogeDesigner that said Reuters was lying in its coverage because the website’s traffic is down year-over-year and month-over-month asserting that Reuters is somehow compelled to lie to boost traffic; this view, however, sounds a bit fanciful when you consider the damage it would do to its reputation if it did take to blatant lying.

According to the Reuters report, three sources familiar with the matter, including with access to company messages, said that Tesla was shelving plans for an affordable car dubbed the Model 2. Following the publication of the report, Tesla shares fell 6% but managed to recover somewhat after Musk said Tesla will unveil the Tesla Robotaxi on August 8.

Musk’s rebuttal of the claims could have something to do with some of the messages that Reuters reviewed. In them, an unnamed program manager said that staff should avoid telling suppliers about the project’s retirement.

A fourth source speaking to Reuters said they were optimistic about the plans to pivot to robotaxis because this is where Musk envisions the future of mobility. The source also said that product plans could change again depending on economic conditions.

If Tesla has actually pivoted away from an affordable car, it’s believed the decision has been made because of the entry of many Chinese competitors into that sector. By working on a robotaxi, Tesla could give itself a moat against competition because of the regulatory hurdles and the more advanced technology needed.

Given the conflicting positions, it’s impossible to tell what the future of the affordable car project will be. Hopefully, we’ll hear more in August at the robotaxi announcement.

Image via Depositphotos.com