Exclusive: Tesla plans to build new electric vehicles in mid-2025
Tesla has informed suppliers of its plans to start production of a new mass-market electric vehicle codenamed 'Redwood' in mid-2025. The model is described as a compact crossover and is part of Tesla CEO Elon Musk's vision for affordable electric vehicles. The company aims to compete with cheaper gasoline-powered cars and other inexpensive EVs like those made by China's BYD. Tesla has sent requests for quotes to suppliers for the 'Redwood' model, with a forecasted production volume of 10,000 vehicles per week. Production is expected to begin in June 2025.
Tesla's Plan for New Electric Vehicles
Tesla has informed its suppliers that it plans to start production of a new mass-market electric vehicle called 'Redwood' in mid-2025. The vehicle is described as a compact crossover.
The announcement aligns with Tesla CEO Elon Musk's goal of developing affordable electric vehicles and self-driving robotaxis. Musk has long talked about creating a $25,000 entry-level car to compete with cheaper gasoline-powered cars and other inexpensive EVs.
The Redwood model is part of Tesla's strategy to expand its range of electric vehicles and cater to a wider market.
Tesla's Vision for Affordable EVs
Tesla's ambition to create affordable electric vehicles has been evident for several years. In 2020, Musk promised to build a $25,000 car but later delayed the plan. The company's cheapest offering, the Model 3 sedan, currently starts at $38,990 in the United States.
The Redwood model is expected to be a significant step towards achieving Musk's vision for affordable electric vehicles. Tesla aims to leverage its next-generation electric car platforms to lower production costs and compete with cheaper gasoline-powered cars and other EV manufacturers like BYD, which overtook Tesla as the world's top EV maker in 2023.
Production Plans and Challenges
Tesla has already sent requests for quotes for the Redwood model to its suppliers and anticipates a weekly production volume of 10,000 vehicles. Production is scheduled to begin in June 2025.
However, Tesla's track record of meeting targets and pricing accurately has been mixed, with previous launches experiencing delays and higher-than-expected prices. Building volume and achieving profitability from cheaper EVs can be challenging due to battery costs and the difficulties in producing quality inexpensive vehicles.
Despite these challenges, Tesla is determined to develop a range of affordable electric vehicles and is exploring factory locations in Berlin and India to support their production.
