US EV manufacturer Tesla has told suppliers that it wants to start production of a new mass market electric vehicle, codenamed ‘Redwood’, in mid-2025, Reuters reported, quoting four people familiar with the matter. Two of the sources described the model as a compact crossover. The information falls in line with CEO Elon Musk’s ambition of launching affordable electric vehicles and self-driving robotaxis that are expected to be made on next-generation, cheaper electric car platforms.
Tesla has already sent “requests for quotes” or invitation for bids for the “Redwood” model to its suppliers last year. The company has forecasted weekly production volume of 10,000 vehicles while production is expected to begin in June 2025, sources said.
Tesla plans to make an inexpensive robotaxi and an entry-level, USD 25,000 electric car based on the same vehicle architecture, as per Walter Isaacson’s biography of Musk released last September, which includes interviews with the CEO and executives. In 2022, Musk had said that Tesla would make a dedicated self-driving taxi with a futuristic look in 2024, after several misses at its goal of achieving full self-driving capability.
The affordable electric models from Tesla, including an entry-level USD 25,000 car, would allow the company to compete with cheaper gasoline-powered cars and a other inexpensive EVs, such as those made by China’s BYD. The latter is one of Tesla’s biggest competitor as it overtook Tesla as the world’s top EV maker in the final quarter of 2023.
Currently, Tesla’s cheapest offering is the Model 3 sedan with a starting price of USD 38,990 in the United States. Musk had first conceived the idea building a USD 25,000 car in 2020, which he later shelved but then revived again. Last year, Musk said he was concerned about the impact of high interest rates on consumer demand for big-ticket items like cars.
In its impending quarterly results report, Tesla is expected to forecast a 21 per cent rise in 2024 deliveries, which would be well below the long-term annual target of 50 per cent that Musk set about three years ago.