How Elon Musk missed his goals of delivering affordable cars

March 1 (Reuters) – Tesla Inc (TSLA.O) Chief Executive Elon Musk is expected to lay out the details of affordable electric cars at the company’s Investor Day in Texas on Wednesday, where he unveiled the EV’s “Master Plan 3” maker will reveal.

Musk said making an affordable car has been his “dream” since joining the company. While Tesla has jump-started the EV market by offering its premium Model 3 and Model Y vehicles, Musk has missed its goals of providing electric vehicles that are attractively priced for the mass market.

“We specialize in making the impossible late,” he said at an event in February to celebrate the launch of Tesla’s tech headquarters in Palo Alto, California.

Here’s a timeline of his comments on affordable vehicles.


Musk revealed his “secret” master plan under which he said he would build affordable electric cars. “So in short the master plan is: build a sports car, use that money to build an affordable car, use that money to build an even cheaper car.”

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Musk said Tesla would launch a $35,000 Model 3 electric sedan by the end of 2017 without government incentives, but the version was only available briefly as of 2019. Right now, after a recent price cut, Tesla’s least expensive car is $42,990 for a Model 3 standard range version. It will cost about $35,000 after US government incentives of $7,500 that could be cut in half starting in March depending on battery mineral requirements.


Speaking at an event called Battery Day, Musk said he was “convinced” Tesla would make a small, attractive $25,000 electric car that’s fully autonomous within about three years when he unveiled a plan to develop lower-cost batteries.

Musk’s self-driving “robotaxis” has not materialized despite his repeated promises. Tesla recently recalled more than 362,000 US vehicles for its Full Self-Driving (FSD) Beta software after US regulators said the driver assistance system was not sufficiently compliant with road safety laws and could cause accidents.


When asked by an investor about a $25,000 car, Musk said Tesla was not developing the car, saying, “We’ve got enough on our plate right now, too much on our plate, frankly.” The question is “sort of the wrong question, actually,” he said, adding that what matters most is when the car will be autonomous.


Musk said Tesla was working on the next-generation car, which would likely be about half the cost of the Model 3 and Y platform. Tesla said the cost per vehicle was $36,000 by the end of 2021.

Reporting by Hyunjoo Jin in San Francisco Edited by Matthew Lewis

Our Standards: The Thomson Reuters Principles of Trust.


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