Tesla shares decline on possible cancellation of plans to produce a cheap car

The shares of the American electric car company Tesla fell during Friday’s trading session by 1.56%, with talk of the company canceling plans to produce the cheap car that it intended to manufacture.

According to CNBC, the stock price fell about two dollars and 67 cents to the level of $168.44 during the session at 01:12 pm New York time.

The company’s shares fell by about 3% in early afternoon trading after a Reuters report talked about Tesla canceling the long-awaited cheap car that investors were relying on to drive the company’s growth to become a huge market, according to what the agency quoted three sources familiar with the matter. And the company messages that I reviewed.

The sources said that the company will continue to develop a self-driving robotaxi on the same small vehicle platform.

The decision represents an abandonment of a long-standing goal that Tesla CEO Elon Musk has often described as its core mission: affordable electric cars for the masses. His first “master plan” for the company in 2006 called for manufacturing luxury models first, then using the profits to finance the manufacture of a “low-cost family car.”

Since then, Musk has repeatedly promised such a car to investors and consumers. Last January, Musk told investors that Tesla plans to begin production of the affordable model at its Texas factory in the second half of 2025.

The price of Tesla’s current cheapest model, the Model 3 sedan, is about $39,000 in the United States. While the price of the car that the company abandoned its production plans, which is sometimes described as Model 2, was expected to start at about $25,000.

“Reuters is lying (again),” Musk said on his account on the social networking site X. He did not identify any specific errors.

This comes at a time when Tesla faces fierce competition globally from Chinese electric car makers, who are flooding the market with cars priced up to $10,000. The self-driving robotaxis plan, which may take longer to implement, represents a tougher engineering challenge and greater regulatory risks. .

The electric car manufacturing company announced on Tuesday, April 2, a major failure in car deliveries during the first quarter of this year, as it reported 386,810 thousand global deliveries, which is much lower than estimates of 449,080 thousand.

Tesla’s total deliveries in the first quarter represent a significant decrease from the fourth quarter, during which it delivered 484,000 cars.

The automobile company produced 433,371 thousand cars during the first quarter, which is also less than estimates of 452,976 thousand.