Tesla CEO Elon Musk is said to have pushed ahead with the robotaxi business despite an internal report warning of possible losses.
On Wednesday, electric vehicle media outlet Electrek reported that Musk had gathered various executives at Tesla’s Palo Alto, California, office early last year and decided to produce a new 25,000 USD EV to counter Chinese electric vehicles.
According to the source, high-ranking executives insisted on producing both the electric vehicle known as the Model 2 and the robotaxi, but Musk insisted on reducing some of the features of the existing large Model Y to make it cheaper.
Tesla executives argued that they should focus on producing the 25,000 USD electric vehicle rather than the robotaxi, citing internal analysis as the basis. The analysis reportedly included information that the profitability of the robotaxi would be lower than Musk had claimed.
According to Tesla’s internal analysis, the annual sales forecast for robotaxis is less than 1 million units, which is the combined sales of Waymo and other competitors’ robotaxis. Therefore, it is impossible to replace the 630,000 units that Tesla sold in the U.S. in 2024. In addition, the management was concerned that overseas sales would be difficult for the next few years due to regulations on robotaxis in each country.
Musk, however, pushed ahead with the robotaxi project despite the management’s opposition and internal analysis, and presented a rosy outlook to Tesla shareholders, the media reported. Musk claimed in the quarterly earnings announcement in April last year that Tesla should be viewed as an AI and robotics company.
