In 2025, Tesla CEO Elon Musk announced the official termination of the Model 2, an affordable electric vehicle project, a decision that has set off waves in the automotive and technology worlds like a boulder thrown into a calm lake. Musk believes that the Model 2 is a product of traditional thinking, and Tesla's future belongs to AI and robots, which marks a shift in Tesla's strategic focus and also triggers a lot of thinking about corporate strategy, market prospects and technological development.
1. Ending the Model 2: Sales pressure and strategic direction
* Sales dilemma: In recent years, Tesla's sales have been under significant downward pressure. Sales in 2024 will decline by 1% year-on-year, and by a further 13% in the first quarter of 2025. The utilization rate of the Shanghai Gigafactory is less than 60%, and the problem of overcapacity is prominent. The former "long board" such as power consumption control and brand premium are fading, and the intelligent advantage has not yet been transformed into a market moat. In a highly competitive market environment, the Model 2 project is considered to be a continuation of the traditional automotive business thinking, and it is difficult to support Tesla to regain an advantage in the competition.
* Strategic shift: Back in 2020, Musk first proposed the idea of developing an entry-level electric vehicle, the Model 2, with a planned price of $25,000 and a target annual sales of 5 million units, aiming to compete for the mass market. However, Musk bluntly said in an internal meeting that building cheap cars "can't change the world", and he prefers to invest his money in the robotaxi and humanoid robot Optimus projects. This shows that Musk's strategic thinking has shifted from traditional car manufacturing to the field of AI and robotics with more future potential.
Figure: Comparison of Tesla vehicles and robot powertrains
2. Tesla's AI and robotics layout and progress
* AI technology investment: Starting in 2024, Musk has promoted up to $10 billion in AI technology investment, covering the research and development of NVIDIA chips, in-vehicle sensors and Dojo supercomputers. Tesla's director of artificial intelligence, Andrew Capatia, once compared Tesla's FSD (Full Self-Driving Capability) chip with Nvidia's Orin chip and Qualcomm's Snapdragon Ride chip, believing that Tesla's FSD chip is superior to its competitors in terms of specific performance.
* Optimus Robotics Development: From the release of the humanoid robot plan at the inaugural AI Day in August 2021, to the launch of the first prototype in September 2022, to the demonstration of breakthroughs in motion control and environmental perception in May 2023, and the release of a robot sorting battery video in May 2024, and the release of the latest dancing video on May 14, 2025, Optimus is constantly evolving. And there is a relatively clear expectation of commercialization, such as on March 21, 2025, Musk said that it will enter the trial production stage.
3. Market and Industry Impact: A Double Dilemma and Future Possibilities
* Double dilemma: Tesla's transformation attempt faces the dual dilemma of shrinking automotive business and questionable effectiveness of AI investment. On the one hand, Tesla's electric vehicle business is the foundation, but its market share is being rapidly seized by Chinese car companies, and the shortcomings of its product strength are becoming increasingly prominent, such as its pure vision solution (FSD) in China, which is slow to implement and lag in hardware iteration, which has had an impact on its brand influence and market position. On the other hand, despite the huge potential in the field of AI and robotics, Tesla's investment in these fields has not yet been matched by the market return, and it faces many technical and commercialization challenges, such as the mass production cost and practicability of the Optimus robot are still questionable, and the Robotaxi project has regulatory barriers and technical reliability issues, and the commercialization is far away.
* Possible future: In the long run, if Tesla can make a major breakthrough in the field of AI and robotics, it will be possible to open up a new business model and development space. For example, the application of AI technology is expected to improve the intelligence level of automobiles and bring safer and more efficient solutions for autonomous driving. If the humanoid robot Optimus can be widely used in multiple scenarios such as home and industry, it will bring changes to human life and production methods. However, this process is full of uncertainties and risks, and requires Tesla's continuous efforts and explorations in technology research and development, market promotion, and cooperation alliances.
4. Domestic dimension: opportunities and competition coexist
* Technological development opportunities: Tesla's layout and exploration in the field of AI and robotics provide opportunities for domestic related industries to learn and learn from each other, prompting domestic enterprises and scientific research institutions to increase investment and innovation in these fields and improve their own technical level and competitiveness.
* Intensified market competition: As Tesla continues to advance in the field of AI and robotics, its products and services will gradually enter the Chinese market and compete with domestic companies. This will prompt domestic enterprises to accelerate the pace of technology research and development and product upgrading, and improve product quality and service levels to meet Tesla's competitive challenges.
Tesla's decision to terminate the Model 2 project and focus its resources on AI and robotics is a strategic adjustment in the face of market changes and competitive pressure. Despite the challenges and uncertainties surrounding this transition, it also demonstrates Tesla's keen insight into future technology trends and its adventurous spirit. Whether Tesla can succeed in the field of AI and robotics in the future, and realize the transformation from a traditional automaker to an AI technology company, remains to be tested by time. For the industry as a whole, this event also reminds companies to constantly review their own development strategies, actively respond to market changes, and explore new technology applications and business models to maintain competitiveness and sustainable development.
