Tesla has plans for a new mass-market electric vehicle codenamed ‘Redwood’ in mid-2025, which would start at $25,000, making it the cheapest electric vehicle available.
The Elon Musk-owned company reportedly sent requests for quotes to suppliers last year, projecting weekly production of 10,000 compact crossovers when production begins in June 2025, according to a new report.
The billionaire promised in 2020 that customers would get a cheaper electric vehicle, and ‘Redwood’ could be part of that plan.
The move may be Musk’s strategy to attract more buyers, as Tesla’s cheapest model, the Model 3, at $43,900, saw a 15 percent decline in sales last year compared to 2022.
Tesla may have plans for a new mass-market electric vehicle codenamed ‘Redwood’ in mid-2025, which would start at $25,000, making it the cheapest electric vehicle available. The Model 3 (pictured) is Tesla’s cheapest vehicle: $43,900
People familiar with the matter revealed details to Reuters, which noted that Tesla has a history of missing its launch and pricing targets, and that it would take time to build volume as proposed in notes to suppliers.
Production of the Cybertruck has been delayed and slow to ramp up, and its starting price of $60,990 is 50 percent higher than what Musk touted in 2019.
However, Tesla quietly increased the starting price to $79,990 following the official launch in December.
‘They have been overly optimistic on most new product launches. “Volume production will most likely begin in 2026,” one of the sources said.
Musk said last year that Tesla’s factory in Texas would begin producing affordable electric vehicles.
The Elon Musk-owned company reportedly sent requests for quotes to suppliers last year, projecting weekly production of 10,000 compact crossovers when production begins in June 2025.
Making a profit on cheaper EVs will be a challenge, given the costs of batteries as well as the traditional difficulties of producing quality, affordable vehicles.
In recent years, Tesla knocked down a Honda Civic, which starts at $23,950 in the United States, to study how to make cheaper cars, two separate sources said.
The next-generation Tesla architecture, internally called ‘NV9X,’ will include two or more models, the two people and one of the initial sources said.
Tesla also plans to build cheaper cars at its factory near Berlin and is interested in building a factory in India to produce less expensive electric cars, sources previously said.
The ‘Redwood’ news came after Tesla held its quarterly earnings report earlier this month.
Investors have been pressuring Musk to produce compact vehicles in a bid to increase deliveries.
Tesla has a history of missing its launch and pricing targets, and it would take time to build volume as proposed in the notes to suppliers. Production of the Cybertruck (pictured) has been delayed and slow to ramp up
During this month’s call, deliveries were forecast to reach 21 percent this year. well below the long-term annual goal of 50 percent that Musk set about three years ago.
Musk said in May that Tesla was working on two new products, with a combined sales potential of five million vehicles a year.
“Both the product design and manufacturing techniques are head and shoulders above anything else present in the industry,” he said at Tesla’s annual shareholder meeting.
Plans included a budget robotaxi and a $25,000 entry-level electric car based on the same vehicle architecture, according to Walter Isaacson’s biography of Musk published in September, which includes interviews with the CEO and executives.
Musk said in 2022 that Tesla would make a futuristic-looking self-driving taxi in 2024, after several failures in its goal of achieving full self-driving capability.
He and other Tesla executives laid out plans last March to cut the cost of their next-generation vehicles in half, but did not provide a timeline for launches.