Tesla has reportedly communicated its plans to suppliers about commencing production of a new mass-market electric vehicle dubbed “Redwood” by mid-2025, with insiders indicating it as a compact crossover. Elon Musk‘s persistent push for affordable electric vehicles (EVs) and self-driving robotaxis, anticipated to be based on next-generation, cost-effective EV platforms, continues. This includes the development of an entry-level $25,000 car, positioning Tesla to compete with cheaper gasoline-powered vehicles, and the growing array of budget-friendly EVs, exemplified by China’s BYD.
BYD claimed the top spot as the world’s leading EV manufacturer in the last quarter of 2023, surpassing Tesla. Musk’s initial commitment to a $25,000 car in 2020 underwent shelving and later revival. Presently, Tesla’s most economical offering, the Model 3 sedan, initiates at $38,990 in the United States. Musk expressed concerns in the past year about high-interest rates potentially impacting consumer demand for substantial purchases like automobiles.
Tesla initiated requests for quotes from suppliers for the “Redwood” model last year, projecting a weekly production volume of 10,000 vehicles. While production is slated for June 2025, specific details are confidential, with Tesla opting not to respond to requests for comment.
Investors have displayed a keen interest in the timeline for next-generation compact vehicles, with expectations for Tesla’s quarterly results projecting a 21% surge in 2024 deliveries, significantly below Musk’s ambitious long-term annual target of 50%, set roughly three years ago.
In May, Musk shared that Tesla was actively developing two new products with the potential for combined annual sales of 5 million vehicles. This encompasses the creation of an inexpensive robotaxi and an entry-level $25,000 electric car, both sharing the same vehicle architecture.
