Analysts Aren’t Convinced: ‘Cheap’ Doesn’t Always Sell

“American consumers have shown that their preferred vehicles are neither small nor cheap, regardless of what their finances might suggest," said Joseph Yoon, consumer insights analyst at Edmunds, in an email, addressing the Reuters report.

Yoon continued. “The subcompact SUV segment is popular among American consumers, but whether it’s a feasible EV segment remains to be seen, particularly if manufacturing begins overseas and the current administration holds its trade policies," he said, adding, “Volvo has already pulled the plug on the EX30, and GM’s commitment to the [Chevy] Bolt fluctuates despite the car’s fervent customer base.”

Analysts Aren’t Convinced: Tesla Has Other Priorities Now

Tesla has already gone down the low-cost “Model 2” road and has other priorities now, said Sam Fiorani, vice president of Global Vehicle Forecasting at AutoForecast Solutions. “Tesla ended development on its earlier entry-level model and the Mexican plant that was expected to produce it,” said Fiorani in an email. “As the company pivots to robotics and autonomy, the need for an entry level model in North America has been greatly reduced,” he said. “The amount of investment necessary to get profitable volumes from a low-priced model would detract from areas Tesla would rather focus on,” he said.