Tesla board chair Robyn Denholm indicated in a recent interview that the company is developing a new affordable vehicle based on the Cybercab platform. She noted it would include a steering wheel and pedals to meet U.S. safety regulations. This comes after Tesla previously canceled plans for a $25,000 model.
Robyn Denholm, chair of Tesla's board of directors, discussed the company's future products in a Bloomberg interview on October 28, 2025. She announced that the Cybercab, originally envisioned as a fully autonomous robotaxi without steering controls, would serve as the basis for Tesla's next new model. "If we have to have a steering wheel, it can have a steering wheel and pedals," Denholm told Bloomberg's Kara Carlson and Craig Trudell.
This shift addresses Federal Motor Vehicle Safety Standards (FMVSS), which require all vehicles sold in the U.S. to have steering wheels and pedals. Exceptions allow only up to 2,500 non-conforming vehicles per year, insufficient for mass-market production. General Motors' attempt to secure an exemption for its Cruise Origin autonomous shuttle failed after two years, contributing to the division's closure. Waymo, a leader in autonomous vehicles, uses modified production cars with steering wheels and pedals, operating without human drivers on public roads.
The so-called Model 2, an affordable electric vehicle, has a turbulent history. Reports from March 2024 suggested production would start mid-2025 in Tesla's German factory, targeting compact crossovers with weekly output of 10,000 units. However, Reuters reported on April 5, 2024, that Tesla canceled the project in late February 2024, redirecting focus to robotaxis. Elon Musk stated during an earnings call, "Having a regular $25K model is pointless. It would be silly." Sources confirmed the cancellation in a meeting attended by many employees, with instructions to withhold details from suppliers.
Denholm's comments suggest a reversal, hinting at a $25,000 model using Tesla's unboxed manufacturing process. She added, "The original Model Y was not going to have a steering wheel or pedals," emphasizing collaboration with regulators. A separate CNBC appearance also confirmed Tesla has "a few more vehicles coming out," following the launch of Model 3 and Model Y Standard Range variants at $36,990 and $39,990.
This development revives hopes for an accessible Tesla amid ongoing debates over autonomy and affordability.