The change by Tesla regarding its $25,000 electric car is explained.

The possibility of a $25,000 Tesla has been circulating for several years, partly due to the confidence Elon Musk expressed in 2020 about the viability of such an idea. However, recently during the third-quarter earnings call, Musk referred to this concept of a car with a steering wheel and pedals as "pointless" and "silly." According to his new approach, he only wants to launch a vehicle at that price: the "Cybercab," a robotaxi for which he showcased a prototype two weeks ago.

Over the years, Musk has changed his mind about Tesla's plans, causing confusion even among his ardent supporters. Some have incorrectly claimed that the idea of a drivable $25,000 Tesla never existed when, in fact, it was proposed.

The story began in 2020 at an event known as "Battery Day," where Musk mentioned that Tesla was developing new battery cells that would result in a significant cost reduction. At that time, he expressed confidence that, within three years, they could offer an attractive electric vehicle at that price, which would also have autonomous driving capabilities.

The interpretation of his words was ambiguous: some assumed that the car would be a robotaxi, while others believed it would have a steering wheel and pedals, a condition that, according to Musk, could later be upgraded with software to make it autonomous. During a meeting in September 2021, Musk expressed doubts about whether this car would be manual or not.

In January 2022, Musk reaffirmed that Tesla "was not currently working on the $25,000 car," prioritizing the autonomy of their vehicles. As Musk's biographer, Walter Isaacson, conducted further research, he revealed that Musk and his team debated for months about developing the robotaxi versus a conventional car. During a meeting in August 2022, Tesla's chief designer, Franz von Holzhausen, proposed creating a removable conventional vehicle, but Musk remained steadfast in his vision of a robotaxi without a steering wheel or pedals.

Over time, Tesla executives continued to secretly develop a conventional design, and by September 2022, they convinced Musk that the best option was to work on both vehicles. This collaboration led to Musk expressing his approval in February 2023 for the "robotaxi and the $25,000 car" models.

However, in April 2024, a report revealed that Tesla had abandoned the design for the drivable car, focusing solely on the robotaxi. Musk responded by accusing the outlet of "lying," although in subsequent quarterly statements, Tesla acknowledged that they were working solely on the robotaxi design, leaving the future of more accessible models in limbo.

Currently, Tesla is undergoing a cost simplification process using ideas from the next-generation platform project, which was intended for the $25,000 car but is being applied to current vehicles. Although the Model 3 has a base price of approximately $42,000, Musk has called the idea of a $25,000 car "silly" and "pointless." However, completing the vision of the Model 3 at its initially promised price of $35,000 could be a more serious priority, although this direction has not yet been clarified.

As details develop, it’s important to remember that at one point, Tesla was indeed working on a $25,000 vehicle with a steering wheel and pedals.