Ford Authority

Ford EV Rival Tesla Cancels Plans For Low-Cost EV

Ford recently announced that it was shifting its focus away from pricer, larger all-electric vehicles and is working on developing a series of smaller and cheaper EVs, with the first slated to be a $25k crossover launching in 2026. This effort is being led by a former Tesla executive, and stems not only from consumer preference, but also, the potential threat of cheap Chinese EVs making it to the U.S. market. Thus, it comes as something of a surprise to learn that Tesla has reportedly ditched its plans to build a cheap EV of its own, according to a new report from Reuters.

Tesla Model 3 Refresh - Exterior 001 - Rear Three Quarters

Tesla CEO Elon Musk originally revealed that the automaker was working on a $25k EV back in 2020, though he later nixed that plan, only to revive it early this year. The automaker reportedly told its suppliers that it planned to begin production of this affordable new model in mid-2025, which was slated to be a compact crossover of some sort. Now, that’s apparently not longer the case.

This new, cheap model has been referred to as the “Model 2,” and was expected to start out at far less than the existing Model 3, which currently has an MSRP of just under $39k. While this particular model has reportedly been nixed, according to this report, it seems as if Tesla still plans on using its smaller platform for a future robotaxi, albeit in far smaller volumes than the Model 2.

Musk later confirmed this original report via Tesla’s post earnings call earlier this year, and noted that production of the affordable EV was slated to begin at the company’s Gigafactory in Texas in the second half of 2025, with a target rate of around 10,000 units per week. Afterward, production of the same model was expected spread to Mexico and another unnamed location outside of the U.S. as well.

We’ll have more on Ford’s competition from around the globe soon, so be sure and subscribe to Ford Authority for continuous Ford news coverage.

Brett's lost track of all the Fords he's owned over the years and how much he's spent modifying them, but his current money pits include an S550 Mustang and 13th gen F-150.

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  1. Bill

    Maybe Tesla sees greater profit potential with the Semi and is shifting resources there now.

    1. Tigger

      Maybe the whole EV house if cards is about ready to collapse.

  2. David Dickinson II

    I’ve always viewed Tesla as one giant carbon-credit selling accounting gimmick. I wouldn’t be surprised if the whole company rapidly collapsed like some giant supernova.

    1. MrBeans


  3. Ford Owner

    No domestic company (Ford, GM, or Tesla) can produce any vehicle for less than $30,000 without losses, due to the higher worker wages than in China, India, or South Korea. So if we want quality vehicles, we have to pay more.

  4. Chris

    Elon came out within half hour of the Reuters article and debunked it. Stock took a nose dive on false reporting, has since recovered. Maybe you should retract this article or out an edited version out.


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