HONG KONG (Reuters) -A Tesla founder and former chief executive said on Tuesday it was a "shame" to hear that the automaker was scrapping its low-cost car plans amid fierce competition in China.

Martin Eberhard was speaking at the HSBC Global Investment Summit in Hong Kong. On Friday, Reuters reported that Tesla was cancelling its long-promised inexpensive car that investors had been counting on to drive growth.

The decision represents an abandonment of a longstanding goal that Tesla chief Elon Musk has often characterized as its primary mission: affordable electric cars for the masses. His first "master plan" for the company in 2006 called for manufacturing luxury models first, then using the profit to finance a "low cost family car".

"We've both read in the news, Tesla delaying or eliminating their low-end Model 2 programme, which is a shame for them, but it's a sign that China has a chance to really spread there," Eberhard said.

Tesla's cheapest current car, the Model 3 sedan, retails for about $39,000 in the United States. The now-cancelled entry-level vehicle, sometimes described as the Model 2, was expected to start at about $25,000.

Three sources told Reuters that while Tesla had scrapped plans for its inexpensive car, it would continue to develop self-driving robotaxis on the same small-vehicle platform.

Tesla did not immediately respond to a request for comment.