Tesla Faces Scrutiny Over Model 2 Cancellation

In April 2024, Tesla CEO Elon Musk publicly denied a Reuters report that the company had canceled its planned $25,000 'Model 2' electric vehicle, despite the project being abandoned weeks earlier. Musk's post on X briefly halted a 6% decline in Tesla's stock, but left executives concerned about potentially misleading investors and the risk of SEC scrutiny due to previous agreements mandating legal review of Musk's Tesla-related statements. Internally, staff and suppliers had already been informed of the Model 2's cancellation, deepening confusion over the company's messaging. Despite investor expectations, Tesla has not released the affordable EV, instead shifting focus to launching stripped-down versions of the Model 3 and Model Y in 2025. The episode underscores ongoing struggles for Tesla to deliver a mass-market vehicle and maintain investor trust amid aging products and declining sales. Musk and Tesla have not officially confirmed the Model 2's cancellation, leaving the company's future strategy unclear.