Key Points
- Tesla Chair Robyn Denholm hinted that the upcoming Cybercab might include a steering wheel and pedals.
- This suggests the Cybercab could also be the long-awaited cheaper EV (Model 2), addressing a significant market need.
- Elon Musk initially resisted a cheaper EV but reportedly liked a Cybercab variant with traditional controls.
- A Cybercab-based Model 2 could be developed and manufactured cheaply, offering a hedge if the robotaxi service struggles.
Tesla Chair Robyn Denholm recently suggested that the company’s upcoming Cybercab could ship with a steering wheel and pedals. This might not sound like a huge change, but it’s actually a really big deal.
This is important because the Cybercab could become the long-awaited, cheaper electric vehicle (EV), often called the Model 2. Tesla revealed the Cybercab—a robotaxi without a steering wheel or pedals—about a year ago. They said it would use a new, cheaper “unboxed” manufacturing process, likely with simpler parts, have only two seats, and cost around $25,000 to $30,000.
Tesla CEO Elon Musk dreams of a robotaxi future where all Teslas drive themselves, but he also needs the Cybercab to succeed and expand Tesla’s total vehicle count. Part of Musk’s vision is for the Cybercab to be a car without pedals or a steering wheel. He has previously questioned the need for a cheaper EV, even though many experts disagree.
Last year, analyst Emmanuel Rosner from Wolf Research wrote that the Model 2 was seen as a way to boost sales, profits, and free cash flow. Edison Yu, Rosner’s successor, thinks a “Model Q” (his name for it) might come out, but could be limited to certain areas and launch in 2026.
Even with his strong opinions, Musk has changed his mind before. Walter Isaacson’s biography of Musk mentioned that Musk thought a $25,000 EV was “not that exciting a product” and didn’t like the idea. However, Musk changed his mind when Tesla design chief Franz von Holzhausen showed him the Cybercab robotaxi concept (which Musk wanted) but also a similar version: a cheap EV with pedals and a steering wheel. “Musk loved the designs,” Isaacson wrote.
For now, Tesla offered cheaper “standard” versions of the Model Y and Model 3 as federal EV tax credits ended on September 30. While these standard versions were probably cheaper to make, many analysts believe they won’t significantly boost sales and might still be too expensive, costing $39,990 for the Model Y and $36,990 for the Model 3.
Tesla needs to grow quickly to keep its cash flowing, invest in AI, and expand its car lineup. The much cheaper Model 2 is essential. The fact that it could easily come from the Cybercab is a huge plus. It could be developed and built cheaply, likely alongside the Cybercab.
A cheaper Model 2 based on the Cybercab is a great backup plan for Tesla if its new robotaxi service doesn’t become widely successful. The robotaxi service is currently testing in Austin and plans to expand to Nevada, Florida, and the San Francisco Bay Area.
Of course, the unpredictable Musk, who reportedly stopped two earlier attempts at a cheaper EV, might try to scrap a Cybercab with a steering wheel and pedals. But could Denholm, as Tesla’s chair, overrule Musk and insist on these controls?
In her interview with Bloomberg, Denholm revealed the Model Y SUV was initially planned without a steering wheel and pedals. But they changed that decision, and it led to huge sales success. The Model Y became Tesla’s bestseller—and in some regions, the bestselling car overall.
Without a doubt, the future of an affordable Tesla EV is extremely important to investors. William Blair analyst Jed Dorsheimer said after the Cybercab reveal that “a smaller and cheaper hot hatchback would be a huge success for Tesla to compete in the lowest pricing tier, especially in Europe and China.” Even a limited release would be good news for Tesla supporters.
