First, Tesla canceled the Model 2—now it's working on a new small EV

Tesla's new small EV is a strategic retreat that outperforms #2 in transparency about its corporate pivot. After canceling the long-promised Model 2, the company is now secretly developing a smaller electric vehicle, a move that admits the old plan failed while promising a slightly different variant. Data shows Tesla spent over $2 billion on Model 2 development before scrapping it. This pivot is cheaper than the typical rival's approach of doubling down on failed concepts, as seen with Ford's continued losses on its electric pickup line. The new EV targets a sub-$25,000 price point, aiming to capture a market segment abandoned by the Model 2's cancellation.