The full self-driving tech and corresponding regulations / legal approvals are not there yet at scale and not likely to be in place for at least a decade (or more).
It's likely the real reason is because Telsa will lose the $25k EV market to Chinese EVs:
'Seth Goldstein, a Morningstar Research Services analyst, said he believes these less-expensive vehicles will be built on current Tesla platforms and priced in the mid-$30,000s.
"It was my understanding that the original plan was to make the more-affordable vehicle on a new platform," he told Reuters. "I think Tesla realized they were late to making an affordable vehicle versus their Chinese-EV peers … So, they changed their strategy rather than make a large investment to produce a new vehicle."'
"lose the market" is I think, a rather "Intel everywhere" take on what market share means. He would not "own" it the way he owns Tesla's current segments, true. But in the long term he won't own Tesla's market share, because in the long term the other car manufacturers who do make onshore and won't be behind sanctions will compete.
This is like "Ford won't make a VW beetle competitor because .." battles of the 60s. Did it mean Ford lost the small car market? No. it shared it.
If our model is there is porche so we don't need any other sports cars, we're pretty close to a planned economy model no? Why are we making saloon cars if a truck can do it all? Why do we have SUV if a tractor and trailer can carry more people &c &c.
I do not expect to see headlines saying "Ford, GM, BMW and Renault have closed their factories because they can't compete, and why bother trying"
'Tesla dropped its plans for a human-driven $25,000 car. [Musk] said in an Oct. 23 earnings call that building the affordable EV would be "pointless" unless the car was fully autonomous.'
'His latest remarks came in response to an investor asking: "When can we expect Tesla to give us the $25,000 non-robotaxi regular car model?" Musk responded: "We're not making a non-robo," before he was interrupted by another Tesla executive. Musk later added: "Basically, I think having a regular $25K model is pointless. It would be silly."'
Tesla is choosing to not compete in the human-driven $25K EV market. If they choose not to compete in that price point, other car makers will fill the market at that price point.
Tesla will continue to compete at higher price points, so they are not closing any factories, but it will be interesting to see what EVs dominate the low-cost market.
It's likely the real reason is because Telsa will lose the $25k EV market to Chinese EVs:
https://www.cnn.com/2024/04/03/cars/china-tesla-byd-competit...
Edit: the article also confirms this:
'Seth Goldstein, a Morningstar Research Services analyst, said he believes these less-expensive vehicles will be built on current Tesla platforms and priced in the mid-$30,000s.
"It was my understanding that the original plan was to make the more-affordable vehicle on a new platform," he told Reuters. "I think Tesla realized they were late to making an affordable vehicle versus their Chinese-EV peers … So, they changed their strategy rather than make a large investment to produce a new vehicle."'