Tesla executives questioned Musk after he denied killing $25,000 EV project - sources

Tesla executives questioned Musk after he denied killing $25,000 EV project - sources

Tesla executives questioned Elon Musk after he denied a Reuters report that the company had killed a planned all-new $25,000 electric vehicle (EV) project, according to people familiar with the matter [2]. The project, often referred to as the Model 2, was expected to drive explosive vehicle sales growth but has not materialized as promised. Musk's denial, made on April 5, 2024, halted a 6% decline in Tesla's stock and confused senior managers who were aware of the cancellation weeks earlier [2].

The executives' concerns shed light on the company's struggle to deliver a low-cost, mass-market EV, which was a core promise of Tesla. Some senior managers asked Musk if he had changed his mind about the project, but Musk rejected their concerns and insisted that the project was still dead [2]. This denial raised concerns among some executives about how to communicate the change in plans to suppliers and investors.

Musk's post on X was so confusing that it prompted executives to question what the company should tell perplexed suppliers and investors. Some executives were concerned that the denial could hurt Tesla sales as buyers delayed purchases to wait for a $25,000 Tesla that, in reality, it had decided not to build [2].

A year later, Tesla has still not released the low-cost EV that Musk once called pivotal to the company's future. Neither Musk nor Tesla has explicitly confirmed killing an all-new model that investors and Tesla enthusiasts have long referred to as the Model 2 [2]. Instead, Tesla is working on stripped-down versions of the Model 3 sedan and Model Y compact SUV, which have been delayed [2].

Tesla's stock price has been volatile, and the company's brand value and reputation have declined since 2024 due to Musk's incendiary rhetoric and political activities. Tesla's stock price is down 12% this year, while the Nasdaq is down just 1% [1].

The investors who signed a letter to Tesla's board in May 2025, demanding that Musk work at least 40 hours per week at the company, blamed the company's crisis on Musk's "absence" and a board that appears "unwilling to act in the best interest of all Tesla shareholders" [1]. They also want a clear succession plan for the management of the EV business and a policy that would limit Tesla directors' outside board commitments.

References:
[1] https://www.cnbc.com/2025/05/28/tesla-investors-demand-musk-work-40-hour-week-at-ev-maker-amid-crisis.html
[2] https://www.marketscreener.com/quote/stock/TESLA-INC-6344549/news/Exclusive-Tesla-executives-questioned-Musk-after-he-denied-killing-25-000-EV-project-sources-50128753/