Ousted Tesla cofounder says a canceled $25,000 car could give China 'a chance to really spread'

Former Tesla CEO and cofounder Martin Eberhard and Elon Musk have famously butted heads over the years. Chris Weeks/WireImage via Getty

• Tesla cofounder Martin Eberhard expressed disappointment over a report of Tesla canceling its $25,000 EV plans.
• Elon Musk dismissed the report, but has acknowledged pressure from China.
• Eberhard’s said China stands to benefit if Tesla scrapped its plan for a low-cost EV.

Tesla cofounder Martin Eberhard said a report that the electric-car maker has canceled a $25,000 EV could give China a boost.

Eberhard said the decision would be a “shame,” during a speaking engagement at the HSBC Global Investment Summit in Hong Kong on Tuesday, according to a report from Reuters.

Elon Musk has spent years promoting the automaker’s plans for a low-cost EV.

But last week, Reuters reported that Tesla had given up on its plans to build a $25,000 car, citing three sources familiar with the project and internal messages. Shortly after the report was released Musk wrote on X that “Reuters is lying (again).” The billionaire also said Tesla plans to unveil its first robotaxi later this year.

“We’ve both read in the news, Tesla delaying or eliminating their low-end Model 2 program, which is a shame for them, but it’s a sign that China has a chance to really spread there,” Eberhard said, according to Reuters.

Tesla and Eberhard did not immediately respond to a request for comment.

Tesla’s lowest-priced car, the Model 3, currently sells for just under $40,000. The carmaker has been facing pressure from EV companies in China, including BYD, which has been vying with Tesla for the title of top EV seller. BYD sells electric cars with lower battery ranges for as low as under $10,000.

Musk has acknowledged mounting competition from Chinese companies in the past, even saying that the US should consider trade barriers to prevent the companies from taking over the US market. Earlier this week, the Tesla CEO said “Chinese car companies are by far the most competitive.”

“That’s where we find the toughest competitive challenges,” Musk said during a podcast with Norges Bank Investment Management CEO Nicolai Tangen. “They make great cars and they work very hard.”

Eberhard, who helped launch Tesla in 2003 and later left his role as CEO in 2007, has spoken out against some of Musk’s decisions at Tesla in the past, including the company’s use of its driver-assist technology. Musk and Eberhard butted heads shortly after Musk joined the venture and Eberhard has said Musk was responsible for ousting him as CEO.

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