Tesla Inc. faced a flurry of market concerns following reports claiming the cancellation of its ambitious project to produce a less-expensive vehicle.
Shares tumbled amid speculations sparked by Reuters, which cited anonymous sources. However, CEO Elon Musk swiftly responded on social media, dismissing the report as misinformation. The incident underscores Tesla's unwavering commitment to innovation and affordability in the electric vehicle (EV) market.
Following Reuters' report alleging the scrapping of Tesla's plans for a budget-friendly vehicle, the company's stock witnessed a sharp decline of up to 6.2%.
However, Elon Musk's swift rebuttal on social media, “Reuters is lying,” Musk wrote on X, shows that his social media service helped mitigate the losses, with shares rebounding from their intraday low.
Tesla first unveiled its vision for a $25,000 model during a high-profile event in September 2020.
Musk expressed confidence in Tesla's ability to deliver an electric vehicle at this price point within three years, citing ongoing innovations within the company.
The absence of a lower-priced model in Tesla's lineup has raised concerns amid growing competition in the EV sector.
Chinese automaker BYD Co. has gained traction with its range of more affordable EVs, outselling Tesla in the fourth quarter of the previous year.
However, Tesla remains poised to address market demand for cost-effective electric vehicles.
During Tesla's recent earnings call in January, Musk reaffirmed the company's progress in developing a cheaper car.
He highlighted advancements in manufacturing technology, emphasizing a "revolutionary manufacturing system" that surpasses existing automotive industry standards.
Despite the temporary market turbulence, Tesla remains steadfast in making electric vehicles accessible to a broader audience.
With ongoing advancements in technology and manufacturing capabilities, the company is poised to introduce a $25,000 model that will cater to the evolving needs of consumers worldwide.
Elon Musk's swift response to rumors of Tesla abandoning plans for an affordable vehicle underscores the company's unwavering commitment to innovation and accessibility in the electric vehicle market.
As Tesla continues to push the boundaries of technology and manufacturing, investors and consumers alike can anticipate the arrival of a more affordable Tesla model in the near future.
