Tesla aims for mid-2025 launch of mass-market electric car

Sources indicate that Elon Musk’s company has issued bid invitations to suppliers for the upcoming ‘Redwood’ model

According to four sources familiar with the matter, Tesla has informed suppliers of its intention to commence production of a new mass-market electric vehicle with the codename “Redwood” in mid-2025. Two of these sources describe the model as a compact crossover.

Elon Musk, the CEO of Tesla, has consistently teased the prospect of affordable electric vehicles and self-driving robotaxis, expected to be produced on more cost-effective next-generation electric car platforms. These upcoming models, including a budget-friendly $25,000 car, aim to position Tesla competitively against less expensive gasoline-powered vehicles and the increasing array of affordable electric vehicles, particularly those from China’s BYD.

In the last quarter of 2023, BYD surpassed Tesla to become the world’s leading electric vehicle manufacturer.

Initially pledged in 2020, Elon Musk had committed to building a $25,000 car—a plan that was initially set aside but later reinstated. Currently, Tesla’s most affordable option, the Model 3 sedan, begins at $38,990 in the United States.

Expressing apprehension about the potential effects of elevated interest rates on consumer demand for significant purchases such as cars, Musk voiced his concerns last year.

In the previous year, Tesla initiated the procurement process by sending “requests for quotes” or bid invitations to suppliers for the “Redwood” model. Two of the sources revealed that Tesla projected a weekly production volume of 10,000 vehicles.

According to three anonymous sources, manufacturing is slated to commence in June 2025. All sources requested anonymity due to the confidential nature of the matter.

Tesla has not provided a response to a request for comment.

The timing of the introduction of the next-generation compact vehicles was among the most frequently asked questions by investors leading up to Tesla’s quarterly results report on Wednesday afternoon. During this report, a 21% increase in 2024 deliveries is anticipated, falling significantly short of Elon Musk’s long-term annual target of 50%, set approximately three years ago.

In May, Musk announced that Tesla was actively developing two new products with the prospect of achieving a combined annual sales volume of 5 million vehicles. During Tesla’s annual shareholder meeting, Musk emphasized that both the design of the products and the manufacturing techniques employed were significantly superior to anything else in the industry.

According to Walter Isaacson’s biography of Musk, released in September and based on interviews with the CEO and executives, Tesla’s strategic plans include the creation of an affordable robotaxi and an entry-level electric car priced at $25,000. These vehicles are expected to share the same underlying vehicle architecture.