Tesla (NASDAQ:TSLA) has reportedly canceled its plans for a low-cost car, according to a report by Reuters on Friday. The company will instead focus on developing self-driving robotaxis on the same small-vehicle platform.

Citing sources and internal company messages, Reuters stated that Tesla has abandoned its longstanding goal of building a more affordable model, a move that disappointed investors. Tesla’s stock price fell more than 5% following the report.

In January, Tesla CEO Elon Musk had announced plans to begin production of the affordable model in the second half of 2025. The entry-level vehicle was expected to have a starting price of about $25,000.

The decision to scrap the low-cost model comes as Tesla confronts heightened competition and a slowdown in electric vehicle demand that has already impacted its business this year.

According to Reuters, the change in plans was revealed during a company meeting in late February, where Elon Musk reportedly directed the team to prioritize the development of self-driving robotaxis.