Tesla shares recovered from steep losses in intraday trading after Chief Executive Elon Musk denied reports that the automaker had scrapped plans to build cheaper cars.
Tesla shares fell 6.2% on Friday after Reuters reported, citing anonymous sources and company sources it reviewed, that Tesla had canceled the project. As of 1 p.m. Friday, New York stocks were down 1.3%.
“Reuters is lying,” Musk wrote on X, without providing specific details. In another post, he responded with an eye emoji to a Tesla investor who speculated that Tesla was putting more resources into trying to bring robotaxis to market.
Musk first showed off a $25,000 model at a battery-related event in September 2020. The CEO said at the time that a series of innovations Tesla was working on gave him confidence the company could produce an electric vehicle at that price point in about three years.
Tesla’s failure to deliver cars on time has proven costly. This week, the company reported quarterly vehicle deliveries fell for the first time in four years. It is losing ground in China, where manufacturers led by BYD Co. offer a range of newer, cheaper electric vehicles.
Musk biographer Walter Isaacson wrote in his book published in September that the billionaire “repeatedly vetoed” plans to produce lower-priced models in the two years after Battery Day. Isaacson wrote that Musk believes Tesla’s self-driving efforts will make the $25,000 car unnecessary.
Reuters reported on Friday that Musk had issued a directive at the end of February to fully develop robot taxis. The CEO has repeatedly claimed that Tesla is close to bringing fully self-driving cars to market, but has yet to offer features that can be used safely without requiring drivers to keep their eyes on the road and their hands on the steering wheel.
During Tesla’s most recent earnings call, Musk said Tesla’s work on low-cost vehicles was “progressing well.”
“I’m often optimistic about time,” he said. “But our current show will begin production in late 2025.”
Tesla has also talked about sweeping changes to its manufacturing methods to reduce costs, including at an investor day last March. During an earnings call on January 24, Musk called it “far more advanced than any other car manufacturing system in the world.”
Read more: Tesla’s $25,000 car needs to break 100 years of factory habits
Tesla is scheduled to release its next earnings report on April 23.
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