Elon Musk has announced that Tesla has axed development of its ultra-affordable model as the popular electric vehicle startup shifts its focus toward more innovative models.

The announcement comes after the company unveiled the Robotaxi, a sleek coupe with full autonomy, which is expected to be launched in 2027.

On the company's third-quarter earnings call, Tesla CEO Elon Musk noted that selling a Tesla for under £20,000 would be "pointless".

He explained: "I think we've made it very clear that the future is autonomous. I think having a regular $25,000 (£19,300) model is pointless.

"It would be silly. It would be completely at odds with what we believe."

Whilst little was known about Tesla's smallest model, dubbed by some as the Model 2, it was expected to cost between $25,000 and $30,000 (£19,300 to £23,150) and be released during 2025.

Briefly spotted during one of the company's promotional videos, the MG4 rival would have featured similar styling to other cars in the Tesla range, such as the Model 3 and Model Y.

The Tesla Model 2 would have also featured an entirely new platform and efficient battery setup, with many predicting a range of around 250 miles per charge.

Whilst Elon Musk has confirmed a new compact model will not be reaching Tesla Centres anytime soon, the company has made a number of bold claims about their upcoming Robotaxi.

Featuring two scissor-opening doors but no steering wheel, the Tesla Robotaxi has been described as "premium point-to-point" transportation, similar to the autonomous taxis already seen in cities such as San Francisco and Miami.

With an expected launch date in 2027, Tesla plans to sell the Robotaxi at around $30,000 (£23,150). However, whether it will be officially imported to the UK is unknown.