Earlier this year, top executives at Tesla gathered in Palo Alto to sell CEO Elon Musk on a line of compact cars that would bring the electric-vehicle revolution to budget-conscious consumers across the world. The more affordable car had long been part of Musk’s master plan for Tesla to fight climate change by “accelerat[ing] the world’s transition to sustainable energy.”
But Musk axed the proposal, amid budget constraints, according to two people close to Musk who spoke on the condition of anonymity to describe private conversations. Instead, the billionaire green-lit a massive purchase of computer chips, in a deal worth billions intended to enhance Tesla’s luxury cars (and a humanoid robot called Optimus) with energy-intensive artificial intelligence capabilities.
The axe fell because of the limited profitability an eco-car offered not politics.
