Tesla stock will be devalued Shares fell sharply on Friday after CEO Elon Musk denied reports that the automaker had canceled plans for low-cost cars.
Shares fell as much as 6.2% on Friday after Reuters reported, citing anonymous sources and reviewed company messages, that Tesla had canceled the project. The stock closed 3.6% lower.
“Reuters is lying,” Musk wrote about X, without providing further details. In another post, he responded with an “eyes” emoji to a Tesla investor who speculated that the company was directing more resources toward bringing robotaxis to market.
Musk first teased the $25,000 model during the company's battery event in September 2020. At the time, the CEO said the series of innovations Tesla was working on gave him confidence that the company could make electric cars at that price point. About 3 years.
Tesla's failure to deliver cars on time proved costly. The company reported this week that quarterly car deliveries fell for the first time in four years. In China, manufacturers led by BYD are losing ground as they offer many newer and cheaper EVs.
Musk's biographer Walter Isaacson wrote in a book published in September that Musk “repeatedly vetoed” plans to make cheaper models in the two years after Battery Day. Ta. Isaacson wrote that Musk believed Tesla's self-driving efforts would eliminate the need for $25,000 cars.
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Reuters reported on Friday that Musk issued a directive in late February to focus all efforts on robotaxi development. The CEO has repeatedly asserted that Tesla is on its way to bringing fully self-driving cars to market, but it has yet to offer features that drivers can use safely without taking their eyes off the road or their hands on the steering wheel. It is said that it is not.
During Tesla's recent earnings call, Musk said the company is “very far along” in developing low-cost cars. “I'm often optimistic about time,” he said. “However, the current show is scheduled to begin production towards the end of 2025.”
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Tesla also talked about fundamental changes to its manufacturing approach aimed at cutting costs, including at an investor day last March. At an earnings call on January 24, Musk called it “significantly more advanced than any other car manufacturing system in the world.”
Tesla is scheduled to release its next financial results on April 23rd. — Dana Hull and Ed Ludlow, (c) 2024 Bloomberg LP