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Tesla<\/a> stock fell as much as 6%<\/a> on Friday, some $32 billion, after Reuters reported<\/a> that Elon Musk\u2019s EV maker was shelving a years-long plan to produce an affordable electric car.\u00a0<\/p>\n Citing three anonymous insiders and internal company messages, the outlet reported that Tesla was abandoning production of a planned $25,000 EV<\/a> and focusing on robotaxis. Musk had said in January that Tesla would start production on the affordable electric vehicle at its plant in Texas in late 2025<\/a>.<\/p>\n Musk was quick to refute Reuters\u2019 report with a post on X<\/a> but the stock was still down 3.5% at press time, or some $19 billion, as investors digest the company\u2019s efforts to compete with increasingly competitive Chinese carmakers.<\/p>\n Reuters is lying (again)<\/p>\n \u2014 Elon Musk (@elonmusk) April 5, 2024<\/a><\/p><\/blockquote>\n The news comes just days after Tesla reported its first year-over-year decrease<\/a> in vehicle deliveries since the pandemic. The company blamed the lackluster numbers on external factors, but many prominent Tesla investors have put the blame on Musk as CEO.<\/p>\n As of Friday, the company\u2019s stock has fallen about 33% since the start of the year, and at least one Tesla bear has predicted the company\u2019s stock could \u201cgo bust.\u201d <\/a>Even notable Tesla bull Wedbush Analyst Dan Ives called the company\u2019s recent miss on vehicle deliveries an \u201cunmitigated disaster.\u201d\u00a0<\/p>\n Chinese EV companies have increasingly penetrated foreign markets, posing a risk to Tesla and other established car companies. Meanwhile the market for electric vehicles continues to shrink.<\/p>\n Sales of electric vehicles grew just 2.7%<\/a> during the first quarter, far below the 47% growth seen in the EV sector during the same period last year. Some analysts have surmised that the eco-conscious target market for EVs has been tapped out, and now EV makers must convince skeptical gas-powered car owners to make the switch in order to grow.\u00a0<\/p>\n Already, established car companies have scaled back their plans to produce electric vehicles, with Ford announcing Thursday it would delay the launch<\/a> of two high-end EVs as it increases its emphasis on plug-in hybrid vehicles, which are less costly.<\/p>\n As for Tesla, Musk had previously warned investors that sales growth in 2024 would be \u201cnotably slower,\u201d<\/a> because it was caught between two growth waves: the global expansion of its Models 3 and Y and the launch of its more affordable car.\u00a0<\/p>\n With the future of the affordable EV in doubt it\u2019s unclear how future sales, and the company\u2019s competitiveness, will be affected.<\/p>\n<\/div>\n\n\n
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