‘A shame’: Ex Tesla CEO roasts Elon Musk for purportedly dropping low-cost EV

Faced against increasing competition from Chinese rivals, Tesla may have dropped plans to work on a low-cost electric car. And while the American company has neither confirmed nor denied such a move, it has already invited sharp reactions from many, including former Tesla CEO Martin Eberhard.

Eberhard, who was the co-founder of Tesla and served as its CEO till 2007, has expressed his views against the possibility of the electric vehicle (EV)-manufacturing giant shelving plans of a car that is more affordable than the Model 3. A Reuters report, citing three sources, had previously reported that Tesla has made this decision and will instead, focus on robo-taxis. "I read recently that Tesla has decided not to pursue their Model 2, their low-end car, because they don’t think they can compete with the low-end Chinese cars," Eberhard said during an interview given to Bloomberg TV. "I think that’s a shame, they might want to rethink that. It seems like a better market than that gigantic truck they make." He was referring to the Cybertruck that is priced upwards of $81,900 (approximately ₹68 lakh).

The Tesla Model 3 is the most-affordable EV from the company at present. But is it really affordable? The EV is priced at upwards of $40,000 (approximately ₹33 lakh) in the US, a market where there are several more cost-effective options. Across the Atlantic, in Europe, Tesla is facing enormous competition from Chinese players like BYD and Great Wall Motors who offer EVs at a lower price than Tesla products.

For Eberhard, it is not just about Tesla potentially making an error by possibly not going ahead with a sub-$25,000 EV. He feels even Toyota, the world's largest carmaker, has been slow to the EV game while BYD in particular has been racing ahead. Tesla and BYD have been in a tight tussle for the title of being the manufacturer selling most EVs the world over.

Martin Eberhard (in pic) and Marc Tarpenning together founded Tesla back in 2003. Elon Musk was one of the biggest source of funding in initial years before taking on a far more hands-on role. (Bloomberg)

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Martin Eberhard (in pic) and Marc Tarpenning together founded Tesla back in 2003. Elon Musk was one of the biggest source of funding in initial years before taking on a far more hands-on role. (Bloomberg)

Tesla's tryst with an affordable EV

Musk had confirmed to investors that Tesla will build an affordable EV which could be priced at under $25,000. It would obviously have a smaller battery and therefore lesser range than other Tesla models but many felt it could be just what emerging markets like India and Brazil could lap up.

But while ‘Model 2’ was seen as a product that could come as a shot in the arm for Tesla's ambitions of selling huge volumes of EVs the world over, it remains to be seen how the company plans the volumes' game in the times to come.