Tesla has reportedly ended its plans for a low-cost vehicle, a move attributed to the formidable competition posed by Chinese electric vehicle (EV) manufacturers.

According to sources familiar with the matter and internal company communications reviewed by Reuters, Tesla has opted to discontinue the development of an affordable car.

Tesla Ends its Low-Cost Vehicle Plans

According to Reuters, instead of pursuing the production of an economical vehicle, Tesla will pivot towards further advancements in self-driving technology, particularly focusing on the development of autonomous robotaxis built on the same compact vehicle platform.

Despite Musk's repeated assurances to investors and consumers regarding introducing a low-cost vehicle, recent developments suggest a divergence from these promises. 

Earlier in January, Musk informed investors about Tesla's plans to commence production of the affordable model at its Texas facility by the latter half of 2025.

READ NEXT: Elon Musk Reacts After Tesla Cybertruck Crashes Into Beverly Hills Hotel Sign 

Elon Musk Says Reuters is 'Lying'

Tesla's most economical model, the Model 3 sedan, is priced at approximately $39,000 in the United States. In contrast, the now-scrapped entry-level vehicle, often called the Model 2, was anticipated to debut with a starting price of around $25,000.

However, Tesla has not provided an official comment on the matter. However, Elon Musk responded to the report on X, claiming that Reuters is "lying" without explaining why. 

Musk has consistently assured investors and consumers of the imminent arrival of such a vehicle. In January, Musk informed investors about Tesla's intention to begin production of the more affordable model at its Texas factory in the second half of 2025.

The Model 3 sedan, which is currently Tesla's most affordable model, has a retail price of approximately $39,000 in the United States. The entry-level vehicle, which is no longer in production, was commonly referred to as the Model 2. It was initially projected to have a starting price of approximately $25,000. 

While Chinese electric vehicles made significant strides in challenging Tesla's market dominance, Elon Musk was busy overseeing his vast array of ventures. This includes SpaceX, the pioneering rocket-maker, Neuralink, the brain-chip developer, and X, the social media giant that Musk acquired in 2022.

The platform, once known as Twitter, has experienced significant challenges under Musk's unpredictable leadership. As a result, it has suffered a decline in value and a loss of revenue and advertisers.

The success of the affordable Tesla is crucial for fulfilling Musk's ambitious goals for sales expansion. In 2020, Musk made a bold statement about Tesla's ambitions for the future.

He expressed his goal of selling 20 million vehicles by 2030, which is twice the number of vehicles currently sold by Toyota, the world's largest automaker. It remains uncertain how he will reach his goal following the discontinuation of the Model 2.

READ MORE: Car Insurance Prices Keep Rising Without Any Immediate Signs of Relief