The Tesla Model 3 is currently the EV maker’s cheapest vehicle within its lineup.

Elon Musk teased details about a cheaper Tesla model just a few months ago.Bloomberg reported Tesla has shifted to robotaxis, which Musk said will be revealed in August.The change in priority comes as Tesla reports slow sales and decline in revenue.

If EV consumers were looking for a cheaper Tesla in the immediate future, that hope may have to be put on hold for now.

Bloomberg reported that the company’s priorities have changed, shifting away from a mass-market $25,000 Tesla to robotaxis, which Elon Musk said will be unveiled in August.

The pivot comes after Tesla’s disappointing earnings report, which revealed a 20% decline in vehicle deliveries for the first quarter. Bloomberg reported that the company is also expected to report a 40% decline in operating profit and its first revenue decline in four years on Tuesday.

In response, Musk is reducing head count at his company by 10% and betting on robotaxis to give Tesla a much-needed boost.

Musk announced on X at the beginning of April that Tesla plans to reveal its first robotaxi in August, which will likely require some significant advancements to the automaker’s FSD software.

Currently, Tesla’s so-called Full Self-Driving technology can allow a vehicle to change lanes automatically, self-park, and enter a highway, among other features. However, it still requires full-time supervision of a driver. The automaker is also facing several lawsuits related to the software.

Tesla hasn’t revealed many official details on what the robotaxi will look like. Still, Musk has offered various statements on his vision of the company’s autonomous cab, including removing human-oriented controls such as mirrors, pedals, and steering wheels. He also said that Tesla owners could turn their vehicles into a robotaxi, earning them up to $30,000 annually.

But the Tesla CEO has made some grand promises about robotaxis before. In 2019, Musk said the company would have a million autonomous cabs on the road within the next year, a claim that was met with much skepticism and never materialized. The company hasn’t rolled out any autonomous cabs nor received government approval to test such vehicles on public roads.

Sources familiar with the company’s plans told Bloomberg that it’s all hands on deck for robotaxis.

One source told the outlet the timeline for a prototype rollout and production capacity for robotaxis is getting priority over a cheaper Tesla model.

The pivot is a marked shift in focus for Musk and the company.

In December, Musk was teasing details about a $25,000 Tesla, saying the company was “quite advanced” in its work on the car and that it would be “not like any car production line that anyone’s ever seen.”

For now, the cheaper Tesla appears to have been put on the back burner. Reuters reported in early April that sources familiar with the company’s plans said that the $25,000 model is dead. Musk has denied that report, and sources even disputed the claim to Bloomberg.

Either way, analysts have said that Musk’s bet on robotaxis is risky and the Tesla leader should be focused on delivering a cheaper electric car — a big demand among US drivers looking to make the transition.

Wedbush analysts even wrote that it’s “crucial” for Tesla to deliver a cheaper model within the next 18 months.

A Tesla spokesperson did not respond to a request for comment.

Read the original article on Business Insider

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