Tesla Sets Sights on Affordable Electric Future Codenamed 'Redwood' in 2025

After news of the highly-anticipated Cybertruck, Tesla (TSLA.O) has communicated its plans to commence production of a new mass-market electric vehicle, internally referred to as "Redwood," by mid-2025.

Sources familiar with the matter, speaking on the condition of anonymity, revealed that two of them characterized the upcoming model as a compact crossover.

Elon Musk, the CEO of Tesla, has consistently teased the anticipation of affordable electric vehicles and self-driving robotaxis.

These innovations are expected to be based on next-generation, cost-effective electric car platforms.

The introduction of these models, including an entry-level $25,000 car, positions Tesla to compete with more economical gasoline-powered vehicles and an increasing number of affordable electric vehicles, exemplified by China's BYD (002594.SZ).

Notably, BYD surpassed Tesla as the world's leading electric vehicle manufacturer in the final quarter of 2023.

Elon Musk had initially pledged to manufacture a $25,000 car in 2020, a plan that was temporarily shelved and later revived.

Currently, Tesla's most budget-friendly offering, the Model 3 sedan, starts at $38,990 in the United States.

Expressing concerns about the impact of high-interest rates on consumer demand for substantial purchases like cars, Musk acknowledged these challenges last year.

In a strategic move, Tesla initiated the procurement process by sending out "requests for quotes" to suppliers for the "Redwood" model last year.

Sources indicated that the company projected a weekly production volume of 10,000 vehicles.

According to insiders, production of the "Redwood" model is slated to commence in June 2025.

As the details are considered confidential, all sources chose to remain anonymous.

Source: Hyunjoo Jin and Joe White / Reuters