Tesla’s $25,000 Car Could Be ‘A Slimmed Down Model Y’: Report

By automotive-mag.com 5 Min Read

Tesla has been under fire from investors and the public after it abruptly decided to abandon its cheap mass-market EV and prop up its efforts to build a self-driving robotaxi that it calls the CyberCab. Now, we might know what really happened behind closed doors. 

A new report from The Information reveals that Musk’s rash decision not only rushed the upcoming robotaxi to the top of the company’s priority list but also killed off the would-be hit, a “slimmed-down” $25,000 version of the Model Y.

According to the report fueled by accounts from former employees, the fiasco started during two executive-level meetings held during a single week in February. During the first meeting, Musk’s lieutenants pitched the cheap “Model 2” (codenamed NV91, or “New Vehicle 91”) as Tesla’s new home run. It would do this by meeting a price target set by Musk years prior and slimming down Tesla’s most popular vehicle, the Model Y.

From The Information:

In the first, Musk’s lieutenants showed him the latest full-size version of a budget-priced
crossover SUV, a car that resembled a slimmed-down Model Y. The vehicle—which people outside Tesla had dubbed the Model 2—was on track for mass production in the second half of 2025 and would be priced at roughly $25,000.

Musk has been enamored by the idea of an even cheaper EV from the moment he revealed it on stage with former engineering executive Drew Baglino at Tesla’s first Battery Day event in 2020.

“This has always been our dream from the beginning of the company,” said Musk.

His idea was to use Tesla’s already-efficient manufacturing method combined with even cheaper battery tech to shave a considerable amount of money off the price tag. However, what kicked the cheaper car off Musk’s radar wasn’t the price tag—it was the CyberCab.

A second meeting last February between Musk and the same lieutenants focused on a conceptual future product. The executives pitched a driverless robotaxi concept codenamed NV93. And Musk was reportedly floored by the idea.

According to the report, the product pitch was only meant to appease Musk’s appetite for future products, but Musk wanted to know why Tesla wasn’t executing that idea immediately. After all, he’s been promising a fully autonomous car since 2016, even if the product wasn’t approved by regulators or fully developed.

An about-face took place immediately. NV91 was reportedly canceled (the cancellation was later walked back to place the car on the back-burner following investor criticism) and the teams were to focus on NV93. Musk subsequently tried to pitch China on the idea of robotaxi testing in Shanghai during a visit to the country last month and told the world that they would be unveiling the car on August 8th.

2020 Tesla Shareholders Meeting and Battery Day

A short timeline for Tesla isn’t that hard to believe, especially given that executives have publicly admitted to being placed on extremely short deadlines. For example, the Cybertruck prototype was designed in just 93 days.

“He turns the barge like it’s a speedboat,” said an unnamed former middle-ranking executive in an interview with The Information.

Sure, the two had similarities—namely, the traction battery and drive motor—but so do the Model 3 and Y. What those platforms don’t share, however, is the target customer.

The NV91 earns Tesla a quick lump-sum payment and will be used by someone who will sit behind the wheel for their daily drives and expects some level of usability and comfort. The NV93 is an operating expense aimed at achieving the lowest cost per mile. Additionally, the CyberCab would need to be durable and widely accessible, and it would have to withstand a myriad of abuse from passengers who would be using it for short-term commutes, presumably with no driver behind the wheel.

Tesla is in for a wild ride moving forward. Multiple former employees told The Information that the robotaxi is “a long way from ready to release,” which means that Tesla will undoubtedly push it back. That move could test the patience of investors as Tesla’s stock has already tumbled over 32% this year alone. Meanwhile, Tesla has asked those same investors to vote on whether or not to reinstate Musk’s $56 billion pay package.

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