Model 2 cancellation report premature as Tesla's design head says 'stay tuned'

"Reuters is lying," chimed Elon Musk when he commented on a tweet about the report that Tesla has given up on the release of its cheapest car, tentatively named the Model 2.

Shortly after the report, however, he came up with a tweet that Tesla will be unveiling a Robotaxi on August 8, reversing the Tesla stock price nosedive.

Where there is smoke, there might be fire, and Musk's autobiography revealed that he wanted to release a Robotaxi instead of a more boring Model 2 first, and only budged when he was shown a futuristic design of the $25,000 car.

Both vehicle types are reportedly going to be built on Tesla's next generation platform for affordable mass market electric vehicles that Elon Musk dubbed a revolution in low-cost car manufacturing.

Despite the Model 2 demise report, the platform and its vehicles could still be happening, though. Tesla's design head Franz von Holzhausen advised to "not always believe what you read" over the weekend. At an event at the Petersen Automotive Museum, he answered a question about the Model 2 cancellation with the enigmatic "stay tuned."

Analysts are charting two pathways after Tesla's teased Robotaxi unveil. One is to witness a real Robotaxi without steering wheel or pedals announced on August 8, just as Elon Musk originally envisioned. It will have a long and arduous regulatory road ahead of it and may not sell in nearly the same quantity as a more conventional sub-$25,000 car, though.

The other is to announce some kind of new autonomous driving option for existing vehicles as well, with the Model 2 simply placed on the back burner for when market conditions are ripe. Tesla did something similar with the promised Roadster 2 while it was working to release the Cybertruck, but eventually got around to a promised Roadster 2 release for 2025.

Profit margins, interest rates, and Chinese competition must have all gone as variables into the Model 2 release timeframe equation, but according to Tesla's chief designer not all hope is lost for those who are waiting on the cheapest Tesla to materialize. 

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