Tesla has reportedly informed suppliers about its plans to commence production of a new mass-market electric vehicle, codenamed “Redwood,” in mid-2025, according to sources familiar with the matter. Described as a compact crossover by two insiders, this model aligns with CEO Elon Musk’s ambition to introduce more affordable electric vehicles and self-driving robotaxis, utilizing next-generation, cost-effective electric car platforms.
Elon Musk has long teased the prospect of an entry-level $25,000 electric car with Tesla Redwood, positioning Tesla to compete with cheaper gasoline-powered vehicles and the rising tide of affordable EVs, exemplified by China’s BYD, which overtook Tesla as the world’s leading EV maker in Q4 of 2023. The move is strategic, aiming to tap into a broader market segment and increase Tesla’s global market share.
While Tesla’s cheapest offering, the Model 3 sedan, starts at $38,990 in the United States, the envisioned $25,000 EV could significantly broaden Tesla’s consumer base. Musk’s initial promise of a $25,000 car in 2020 was temporarily set aside but has resurfaced as a key element of Tesla’s product roadmap.
Last year, sources revealed that Tesla sent “requests for quotes” to suppliers for the Tesla Redwood model, projecting a weekly production volume of 10,000 vehicles. The anticipated production start date is June 2025, marking another ambitious target for the electric car manufacturer.
This announcement comes amid speculation and investor queries about the timing of Tesla’s next-generation compact vehicles. The company’s quarterly results report is expected to shed more light on its 2024 delivery projections and future product launches.
Musk, who previously mentioned Tesla’s work on two new products with a combined potential sales volume of 5 million vehicles annually, emphasized the innovative design and manufacturing techniques that set these products apart within the industry.
While Tesla has a history of missing launch targets and facing challenges related to pricing and volume, the company’s commitment to introducing more affordable EVs underscores its determination to lead the electric vehicle market on a global scale. As Tesla navigates this journey, questions remain about profitability and how the company plans to overcome the traditional hurdles of producing high-quality, cost-effective vehicles.
The next-generation Tesla architecture, internally referred to as “NV9X,” is expected to include multiple models, with plans for production in Texas, near Berlin, and potential expansion into India, demonstrating Tesla’s global aspirations in the rapidly evolving electric vehicle landscape.
