Tesla's $25,000 EV Turmoil: Internal Conflicts and Strategic Shifts

Tesla executives were alarmed by Elon Musk's denial of reports about canceling a $25,000 EV. Despite Musk's claims, Tesla pivoted to focus on self-driving technologies. Concerns include misleading investors, potential SEC consequences, and competition from other automakers like BYD. Market reactions remain mixed amidst evolving Tesla strategies.

Senior Tesla executives expressed alarm last year when Elon Musk publicly denied a Reuters report regarding the scrapping of a $25,000 electric vehicle, which investors anticipated to significantly boost sales. Insiders revealed that, contrary to Musk's public claims, the company had stopped the project, known as Model 2, weeks prior.

Musk's denial of the model's cancelation led to confusion among some executives, raising questions about communications with suppliers and investors. Instead, Tesla shifted its focus to autonomous vehicle development. Internally, fears arose about potentially misleading investors, which might attract scrutiny from the Securities and Exchange Commission (SEC).

Market conditions and ongoing competition, particularly from Chinese automaker BYD, add pressure. As Tesla grapples with its product strategy, including delays in new models and falling sales, the company risks losing its lead in the affordable EV market, a prospect that challenges its growth strategy.

(With inputs from agencies.)