Elon Musk says a sub-$40,000 Tesla you can actually drive is "pointless"

Tesla CEO Elon Musk has all but killed any hope of the electric vehicle (EV) specialist’s long-rumoured US$25,000 (A$37,600) model coming to life.

During his third-quarter 2024 earnings call to Tesla shareholders yesterday, Mr Musk said the US$25,000 (A$37,600) EV would be “pointless”, despite the brand teasing the possibility of the budget battery-powered model since 2020.

“Basically, having a regular $25K model is pointless. It would be silly. It would be completely at odds with what we believe,” Mr Musk told investors.

“I think we’ve been very clear that the future is autonomous.”

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The first reports about the affordable EV being canned emerged via Reuters in April, with the publication claiming three sources familiar with Tesla’s plans said the model was dead.

This was quickly shot down by Mr Musk on his social media platform X (formerly Twitter), in which the Tesla CEO said “Reuters is lying, again”.

Tesla chief designer Franz von Holzhausen also teased that the US$25,000 EV may not be dead in a later panel discussion, telling those attending to not “always believe what you read”.

However, as the launch of the now-revealed Tesla Cybercab – an autonomous two-seat robotaxi – neared, rumours grew louder that the brand wouldn’t follow its original plan of using the driverless vehicle’s platform for its cheap EV.

Tesla claims the Cybercab will cost less than US$30,000 (A$44,500), though it hasn’t released any technical specifications for the vehicle and has set a tentative start of production date for before 2027.

It might not be all bad news for those wanting more affordable Teslas than the brand’s current lineup, which in Australia consists of the Model Y SUV and Model 3 sedan – starting from $55,900 and $54,900 before on-road costs, respectively.

As reported yesterday, Mr Musk also said Tesla is on track to launch more affordable EVs in the first half of 2025, which could generate up to 20-30 per cent sales growth next year – on the proviso that no major wars or interest rate hikes occur.

While Tesla deliveries recovered in the third quarter of 2024 compared to the year prior – with 462,890 vehicles shipped to global customers – its year-to-date figure is down 2.3 per cent on 2023.

In Australia, Tesla’s 30,750 deliveries between January and September are 19.1 per cent lower than the same period last year.

This was driven largely by a 28.8 per cent decline in sales of the Model Y, though the SUV remains the country’s best-selling EV.

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