Tesla CEO Elon Musk doesn’t feel launching a compact EV is “worth” the technological breakthrough alone and has chosen the Cybercab autonomous vehicle project as a future goal, despite an internal report warning that sales of the vehicle could be so low that it “may never make money,” The Information reported.

“I don’t think Elon is interested in making a Volkswagen Golf,” said one unnamed source. Photo: Bloomberg.

Elon Musk is known as one of the world’s most demanding CEOs, someone who wants nothing more than to change the course of history, whether in business or politics. So when executives on Elon Musk’s Tesla leadership team lobbied to fill a significant gap in the company’s product lineup, he was unimpressed, according to a new report in The Information.

In Musk’s view, greenlighting a compact EV that could sell for $25,000 was the obvious and predictable move any CEO of an auto company would make, unworthy of a technological disruptor like Tesla. Musk reportedly ignored the general advice of his board in favor of developing a fully autonomous robot taxi for the same price.

That means those who have been holding out for Tesla to finally launch a brand new model by the end of the year are in for a disappointment.

Over the past few years, the electric vehicle landscape has changed rapidly as competition has intensified. As this has happened, industry leaders like Tesla have been forced to adapt, which often means finding new ways to innovate.

Part of Tesla’s growth strategy has been focused on self-driving technology, specifically pioneering a robotaxi. Called the Cybercab, the autonomous vehicle is expected to launch later this year, although it is still in development. Experts claim that this means it doesn’t qualify as truly “self-driving.”

Sources say Musk feels like he has achieved his ultimate goal of creating a thriving electric vehicle industry and now finds his daily routine “mundane.” Launching a small car no longer meets the promise of Tesla, maker of the iconic Cybertruck.

Musk’s senior management team suggested that both models could be built using the same platform and the same assembly method to save costs. But Musk reportedly disagreed and killed the low-cost vehicle, widely known as the “Model 2.”

Tesla’s CEO confidently asserted that his AI-powered Cybercab would sell millions of units a year, mostly to fleets.

Tesla’s self-driving car model introduced.

However, his analysts have reportedly warned that the total US market for robotaxis could max out at less than 1 million units a year. There’s also no hope of overseas markets, as regulators may not allow vehicles without steering wheels or pedals, leaving potential Cybercab sales in the hundreds of thousands.

The article notes that Elon Musk is a CEO who doesn’t seem to make decisions based on bottom-up market analysis, but on his own gut instinct. But that intuition, while it has served him well in the past, has also led to the Cybertruck, a love-or-hate pickup truck with a high price tag and limited appeal that now threatens to turn it into Tesla’s first real bombshell.

Tesla did not respond to a request for comment. But the move appears to be a mantra for Musk, who has based his now-buried goal of selling 20 million electric vehicles a year on a back-of-the-envelope calculation.

Fortune previously tracked his gradual shift from cars to robots, starting in January 2022. It was the first sign that his priorities were starting to change, just over a year after he first announced plans for the Model 2.

“To be honest, we have so much to do right now,” he told investors, adding that his team hadn’t even begun developing it. Instead, he began talking up the prospects of the Optimus robot before the prototype was even shown to investors.

Musk believes that self-driving cars will be Tesla’s unique selling point, easily generating $50 billion in annual revenue. But as his rival Sam Altman, CEO of OpenAI, has won plaudits, Musk has begun promising a “ChatGPT moment” for Tesla.

Since Elon Musk began his tenure at the Department of Government Efficiency (DOGE), Tesla stock has been on a mostly bearish trend, and Wall Street sentiment has also declined. Even analysts who have been bullish on TSLA for years have cut their price targets.

With competition in the EV market increasing, both Tesla and Musk are facing an uncertain future as consumers turn against the company.