Tesla (NASDAQ: TSLA) stock is enjoying what feels like a rare “up” day Monday morning, as investors parse some confusing news. Last week Reuters reported that Tesla has abandoned its plans to build a Model 2 electric car priced at less than $25,000, in order to focus its efforts on building “robotaxis” instead.
CEO Elon Musk quickly dismissed the rumor on social media platform X, saying Reuters was “lying.”
But Tesla stock still took a hit on Friday, falling nearly 4%. Today, however, Tesla is winning back its losses — and more — as its stock bounces 4.2% through 10:05 a.m. ET.
Tesla tweets
Citing unnamed sources, Reuters reported last week that Tesla has entirely “canceled” plans to build the Model 2 electric car — which at a rumored price of $25,000 could be key to Tesla’s efforts to compete with low-priced electric cars from China. Musk was quick to dismiss the report in part, but he did seem to endorse the other half of what Reuters was saying — the bit about the robotaxi.
In a tweet following up on Reuters’ article, Musk confirmed that Tesla will announce a new self-driving electric vehicle (EV), which he called his “robotaxi,” on Aug. 8.
Tesla Robotaxi unveil on 8/8
— Elon Musk (@elonmusk) April 5, 2024
Is Tesla stock a sell?
And that’s really all he said on the matter. So what are investors supposed to make of these dueling Tesla reports, one from a respected news organization quoting inside sources at Tesla, and the other from Tesla’s CEO himself?
Clearly, nothing’s 100% clear right now. But the most likely scenario seems that Tesla has made robotaxis its new top priority, while pouring money into developing a cheap EV is now taking a back seat. In the middle of an EV price war, that seems a sound strategy that could preserve profit margins for Tesla. It’s not a reason to sell Tesla stock.
But it might be a reason to buy.
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Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.
Why Tesla Stock Put Pedal to Metal Today was originally published by The Motley Fool
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