Wall Street wants answers from Musk on Tesla's affordable car

Elon Musk has kept investors hanging since he issued cryptic social posts following an exclusive April 5 Reuters report that Tesla had scrapped its plans for a $25,000 “Model 2” electric vehicle.

“Reuters is lying,” Musk wrote in one post that day, without identifying any inaccuracies.

Nearly two weeks later, with no concrete updates from Musk, Tesla investors are restless. Some are demanding clear answers on the Model 2, along with Musk’s plans for arresting a sales slide amid falling electric-vehicle demand globally and rising competition from cheap Chinese EVs.

Tesla’s move to lay off more than 10% of its global workforce and a handful of senior executives, made public Monday, added to shareholder jitters.

“The street wants and NEEDS answers” when Tesla holds an earnings call scheduled for this Tuesday, April 23, wrote analysts for Wedbush Securities after the layoffs were revealed. They cited a months-long “horror show” of bad Tesla news and called for a clear “strategic vision … with Model 2 a key component.”

Wedbush Senior Equity Analyst Dan Ives told Reuters that Musk’s silence on the Model 2 was “gut-wrenching” to Tesla investors “because it’s so instrumental to the growth story.”

Ross Gerber, president and CEO at Gerber Kawasaki Wealth & Investment Management and a Tesla investor, put it more bluntly. “There’s no point in even investing in Tesla if they don't come out with this car,” he said.

Musk and Tesla did not respond to requests for comment for this story or the April 5 report.

The Street also wants clarity on another key aspect of the April 5 story: That after ditching the affordable-car project, Tesla plans to move forward with a self-driving robotaxi on the same small-car platform.

Another Musk post that same day raised as many questions as answers: “Tesla Robotaxi unveil 8/8,” he wrote, implying some version of the self-driving vehicle might be ready by August, but giving no details. Industry experts call the notion that Tesla will quickly produce a road-ready robotaxi unlikely, given the steep engineering and regulatory challenges.

Tuesday evening, Musk posted again on his social media site X about Tesla's focus on self-driving vehicles: «Not quite