The $25,000 Tesla Isn't Happening

• The sub-$30,000 Tesla is dead.
• The EV company already has too much on its plate.
• A cheap Tesla doesn't make sense anymore.

The long-rumored $25,000 Tesla isn't happening. During an investor call to report the company's 2021 earnings, Tesla CEO Elon Musk said, "We are not currently working on the $25,000 car." Tesla's fourth-quarter numbers from 2021 were strong, with the company delivering more than 300,000 cars in the last three months of the year alone. But right now, there's simply too much on the company's plate for an even cheaper Tesla.

Musk also said the company won't be introducing any new vehicles in 2022. That means the previously announced Semi, Roadster and Cybertruck won't be on sale until 2023 at the earliest. As a reminder, Tesla has taken over a million Cybertruck pre-orders to date, has contracts with Walmart, Pepsi, DHL and Anheuser-Busch for hundreds of Semis, and is still taking $50,000 deposits on the Roadster (which was announced more than four years ago).

To say that Tesla already has plenty on its plate is an understatement, with current production essentially at a ceiling. For instance, you'll have to wait until at least October to get a Model X if you place a new order today. But some of these issues might be solved as production lines at the new Gigafactories in Austin and Berlin come online, and that the company is actively scouting locations for additional factories. Musk also said he would be shocked if the automaker's Full-Self Driving suite isn't proven to be safer than human driving by the end of this year.

As for the now-dead $25,000 Tesla, we find ourselves asking, “Why bother?” With Tesla selling more cars than it can make and a loyal customer base that's already OK with shelling out at least $46,000 for a Model 3 and more than $60,000 for a Model Y, Tesla doesn't need to make a cheaper car. Why try to eke out razor-thin margins when you're already maxing out current capacity? It's not that the dream of a cheap Tesla is dead — it's that the case for it simply doesn't exist anymore.

Edmunds says

Don't look for a new Tesla model this year — the Cybertruck and Roadster are pushed until 2023 at the earliest — if they happen at all — and Elon's promised $25,000 vehicle is vaporware for now.