Elon Musk is once again facing criticism over a high-stakes decision that could cost Tesla dearly. According to a new report, the Tesla CEO ignored internal warnings to abandon the long-anticipated $25,000 Model 2 in favor of pursuing his ambitious — and potentially unprofitable — robotaxi project known as the Cybercab.
Musk’s decision to prioritize a self-driving fleet over a budget-friendly EV for the masses is now under heavy scrutiny. Internal analysts reportedly warned Musk that the Cybercab may never achieve profitability and could face significant regulatory hurdles, limiting its global reach. In contrast, the Model 2 was seen as a major opportunity, especially in markets like India, Latin America, and Southeast Asia, where demand for affordable electric vehicles is rising fast.
“Musk hoped he could sell millions of Cybercabs,” Sherwood News reported. “But internal projections only forecast hundreds of thousands in sales, while the Model 2 could have reached millions.” Musk, however, dismissed the idea of producing both, choosing to fully commit to the robotaxi instead.
This controversial move comes at a time when Tesla is struggling with falling demand, rising competition, and growing discontent among consumers and shareholders. Tesla EVs have reportedly been vandalized in the U.S. and Europe in protest of Musk’s polarizing leadership, and the company’s stock has suffered, trending downward since Musk assumed his role with the Department of Government Efficiency (DOGE).
Further complicating matters, China — a key EV market — continues to outpace Tesla with domestic giants like BYD surging ahead in innovation and self-driving tech. Meanwhile, global deliveries of Tesla’s premium models, including the Cybertruck, are down 25% in Q1 2025, and Musk’s refusal to diversify Tesla’s product line may be limiting the company’s growth potential.
Critics argue that Musk’s top-down leadership style, famously documented in Power Play by Tim Higgins, is once again damaging Tesla’s prospects. The book details how Musk often fired those who disagreed with him — a pattern seemingly echoed in the recent Model 2 cancellation.
With rising costs from the ongoing U.S.-China trade war, regulatory barriers abroad, and investor confidence wavering, Tesla’s future now hinges on a risky gamble. Many are wondering whether Musk’s latest bold bet will pay off—or prove to be one of his most costly mistakes yet.
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