Elon Musk denies axing Tesla ‘Model 2’ electric car

Mr Musk has long touted efforts to develop autonomous Tesla taxis but has missed self-imposed deadlines. The billionaire said at an investor event in 2019 he was “very confident predicting autonomous robotaxis for Tesla next year”.

Two years ago he said that creating self-driving cars was “really the difference between Tesla being worth a lot of money and being worth basically zero”.

Tesla shares partially recovered following the missive. The stock has been under pressure all year amid rising competition from China and is down 33pc since the start of the year.

The fall comes after Tesla was briefly toppled as the world’s best-selling electric vehicle in the final quarter of 2023.

Tesla had been the world’s biggest electric vehicle manufacturer since 2015 but was overtaken by China’s BYD, which has been aggressively pushing into the UK, Europe and America. Mr Musk’s company has since reclaimed its manufacturing crown in the first quarter of 2024.

BYD is one of several Chinese EV makers flooding Western market with cars priced as low as £8,000.

The wave of cheap vehicles, many of which benefit from state support, has sparked alarm. The White House has branded them a national security threat, while the EU has launched an anti-dumping investigation.

Tesla has long promised a cheaper, smaller vehicle as part of its mission of providing a “low cost family car”. His “master plan” for the company in 2006 pledged to “drive downmarket as fast as possible to higher unit volume and lower prices with each successive model”.

Currently, the lowest-priced Tesla, the Model 3, starts at £39,990 but a cheaper model is expected to start at around £20,000.

Mr Musk told investors in January Tesla would start production of an entry-level car at its Texas factory in the second half of 2025.

Tesla was approached for comment.