The Elon Musk biography by Walter Isaacson details how a group of Tesla engineers convinced Elon Musk to prioritize the production of a more affordable mass-market car over his obsession with robotaxis. This decision led to the development of what is often referred to as the Model 2. The discussions surrounding this decision lasted for over two years, with the engineers eventually winning the argument and shifting the focus towards creating a lower-cost Tesla to broaden the company’s market appeal.
Last fall, Paul Fosse reported that the Model 2 would be manufactured at the Gigafactory in Austin. Earlier this year, there were doubts about the realization of a lower-priced EV like the Model 2, but in February, Reuters reported that Tesla had started informing suppliers to prepare for manufacturing the Model 2 by mid-2025, with production expected to reach 10,000 vehicles per week.
Speculations suggested that the Model 2 would utilize high-pressure castings for its structure, possibly even having the entire chassis made from a single high-pressure casting. There were discussions about manufacturing locations in Germany, China, Mexico, or a new factory in India, adding multiple twists to the story similar to Apple’s decade-long Project Titan that ended abruptly last month after significant investments.
Tesla Model 2 Cancelled In February
However, according to a report by Reuters on April 5, 2024, Tesla made the decision to cancel the Model 2 and refocus on developing robotaxis. This unexpected turn of events brings the company back to its earlier vision. Despite the seemingly unbelievable nature of this decision, it was confirmed by company insiders and an internal memo seen by Reuters.
This move represents a departure from Elon Musk’s longstanding commitment to building affordable electric vehicles for the masses, as outlined in his previous “master plans.” The cancellation of the Model 2 signifies a shift towards prioritizing robotaxis, albeit in reduced volumes compared to the initial projections for the Model 2.
While the future of Tesla’s business model remains uncertain, Musk’s vision for autonomous driving and robotaxis has been a focal point. The company’s challenges in delivering on this vision, coupled with ongoing controversies and legal issues, highlight the complex landscape of the electric vehicle industry.
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