Tesla Dashes Hopes For A $25k Electric Car

Tesla had an amazing fourth quarter in 2021. The electric automaker made $17.72 billion in Q4 of 2021, allowing the brand to make a tidy profit. Unfortunately, Tesla’s announcement on how well it did last year was also joined by some unfortunate news of delays. The Cybertruck, Roadster, and unnamed budget-friendly vehicle with a reported price tag of $25,000 have all been delayed, as Tesla looks to focus on different things. During the investor call, Tesla CEO Elon Musk stated, “We have too much on our plate right now, quite frankly.”

For consumers, the affordable Tesla has been an elusive vehicle. The automaker was first expected to come out with an affordable electric car for the 2016 model year. Over that time, the vehicle has gone through so many phases. At one point, it was a $30,000 concept, then Tesla harped on about how it was going to be a $35,000 Model 3. More recently, at Tesla’s 2020 Battery Day, it announced that the affordable EV would actually be a $25,000 car with fully autonomous capability. The one was supposed to arrive by 2023.

Over the years, the Model 3 was supposed to be the vessel for Tesla’s affordable price tag. When the vehicle launched for the 2014 model year, it made headlines because of its claimed $35,000 price tag. While Tesla did offer a $35,000 version of the Model 3 for a brief time, the affordable Tesla has always been an idea more than a concrete vehicle.

Now, with Tesla selling more cars than ever and attempting to focus on bringing vehicles like the Cybertruck and Roadster to market, it doesn’t see the need to focus on an affordable vehicle. Furthermore, Musk has stopped working on a $25,000 Tesla because it believes that its car’s price tag won’t matter much once its vehicles become fully autonomous.

According to Green Car Reports, Musk claims the cost of transit drops by a factor of four or five when autonomous vehicles are used to their full potential. “It is clear from these questions that the gravity of full-self driving is not fully appreciated. If the asset has five times utilization, it’s like dividing the asset of that cost by five.” Musk’s argument hinges on the idea that consumers will use their autonomous vehicles five times more than their regular cars. Since an autonomous car can be used to give other people rides when the owner isn’t using it, it can help bring in some extra income to reduce the actual cost of the vehicle.

Tesla does offer a Full Self Driving Package for $12,000 that, despite its name, isn’t fully self-driving. Instead, it’s a highly advanced driver-assist system that requires drivers to be ready to take over at all times. It’s still in the beta phase and, based on reviews and the experience of users, still needs a lot of work. Musk’s argument that pricing won’t matter as much when autonomous vehicles come out makes sense for people that can afford one of its pricey EVs, but doesn’t for the majority of shoppers that are searching for an affordable EV to buy right now.

Based on Musk’s statement, the fact that Tesla is making more money than ever, and Tesla’s goal to increase production of the Model 3 and Model Y, while focusing on bringing the Cybertruck and Roadster to market, it doesn’t look like a $25,000 will ever be in the cards.

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Pictured: 2022 Tesla Model 3 (Top), Tesla Cybertruck (Middle)