Once seen as the undisputed leader in the electric vehicle race, Elon Musk‘s Tesla seems to now be facing challenges as a recent Reuters report reveals how the company’s initial promise of an affordable electric vehicle is taking a backseat, with the company now shifting its focus on self-driving robotaxis.
Musk has often said that Tesla’s main goal is to make electric cars affordable for everyone. In fact, as recently as January of this year, he told investors that the company planned to begin production of an affordable model (codenamed “Redwood”) at its Texas factory in the second half of 2025.
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Following the Reuters report on Tesla ditching affordable EVs, Musk denied the report on X, stating that “Reuters is lying (again).” Interestingly, not much later, Musk posted another tweet saying the company’s new Robotaxi would be unveiled on August 8, which seems to align with some aspects of the Reuters report.
The news comes at a time when Tesla is facing a lot of competition from Chinese electric car companies who have achieved greater production efficiencies, allowing them to offer lower-priced electric cars. For example, the Chinese company BYD is already selling an electric car for less than USD $10,000 in China and has plans to bring a similar car to the US for around USD $20,000.
In Australia, our Teslas are made in China, however, Chinese-owned brands like MG, BYD, and GWM are selling competitive vehicles priced around $35,000 AUD where the cheapest Tesla 3 money can buy is priced from $61,900 before on-road costs.
Xiaomi’s newly announced SU7 EV is also adding to Tesla’s pain, boasting not only a sporty and futuristic design but also a whole suite of competitive features, all while undercutting the price of Tesla’s Model 3 in China. The new SU7 starts at 215,900 yuan (or AUD$46,666), a significant advantage over the Model 3’s base price of $61,900 AUD. Musk is known for his ambitious promises, and it can sometimes be hard to distinguish between his lofty promises and what’s achievable.
While the Tesla chief may unveil his self-driving robotaxis later in August, the road to widespread adoption of safe and legal autonomous vehicles still remains pretty long and complex.
Meanwhile, there’s a pressing need for affordable electric vehicles for everyday drivers. As Chinese car companies flood the market with competitive electric vehicles boasting luxury features and longer ranges at lower prices, buyers have a wider selection than ever, thus begging the question: why choose Tesla? Only time will tell if Tesla’s bet on robotaxis will help them maintain their lead or risk losing ground in the current electric vehicle market.
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