SAN FRANCISCO/DETROIT — Tesla has advised suppliers it desires to begin manufacturing of a brand new mass market electric vehicle codenamed “Redwood” in mid-2025, in response to 4 individuals conversant in the matter, with two of them describing the mannequin as a compact crossover.
Tesla CEO Elon Musk has lengthy whetted followers’ and buyers’ appetites for inexpensive electrical automobiles and self-driving robotaxis which can be anticipated to be made on next-generation, cheaper electric car platforms.
These fashions, together with an entry-level $25,000 automobile, would permit it to compete with cheaper gasoline-powered vehicles and a rising variety of cheap EVs, similar to these made by China’s BYD.
BYD overtook Tesla because the world’s high EV maker within the remaining quarter of 2023.
Musk had first promised to construct a $25,000 automobile in 2020, a plan he later shelved after which revived. Tesla’s most cost-effective providing, the Model 3 sedan, presently has a beginning worth of $38,990 in the US.
Musk mentioned final 12 months he was involved concerning the affect of excessive rates of interest on client demand for big-ticket gadgets like vehicles.
Tesla despatched “requests for quotes,” or invitation for bids for the “Redwood” mannequin, to suppliers final 12 months, and forecast weekly manufacturing quantity of 10,000 automobiles, two of the sources mentioned.
Manufacturing would start in June 2025, three of the sources mentioned. All spoke on situation of anonymity as a result of the matter is confidential.
Tesla didn’t reply to a request for remark.
Timing of next-generation compact automobiles was probably the most voted questions by buyers to Tesla forward of its quarterly outcomes report on Wednesday afternoon, the place it’s anticipated to forecast a 21% rise in 2024 deliveries, effectively beneath the long-term annual goal of fifty% that Musk set about three years in the past.
Musk mentioned in Might that Tesla was engaged on two new merchandise, with the potential for mixed gross sales of 5 million automobiles a 12 months. “Each the design of the merchandise and manufacturing methods are head and shoulders above anything that’s current within the trade,” he mentioned at Tesla’s annual shareholder assembly.
Tesla plans to make an affordable robotaxi and an entry-level, $25,000 electrical automobile based mostly on the identical car structure, in response to Walter Isaacson’s biography of Musk launched in September, which incorporates interviews with the CEO and executives.
Musk mentioned in 2022 that Tesla would make a devoted self-driving taxi with a futuristic look in 2024, after a number of misses at its purpose of reaching full self-driving functionality.
He and different Tesla executives laid out plans final March to halve the price of its next-generation automobiles, however didn’t present a timeframe for the launches.
STUDYING A HONDA CIVIC
Tesla has a monitor report of lacking its targets for launches and pricing, and it might take time to construct quantity.
Cybertruck manufacturing, for example, has been delayed and gradual to speed up and its $60,990 U.S. beginning worth is 50% larger than Musk touted in 2019.
“They’ve been overly optimistic on most of their new product launches. Quantity output is extra prone to start in 2026,” one of many sources mentioned.
Musk mentioned final 12 months the inexpensive mannequin would initially be constructed at Tesla’s manufacturing unit in Texas.
Tesla in recent times tore down a Honda Civic, whose worth begins at $23,950 in the US, to check how one can make cheaper vehicles, two separate sources mentioned.
The following-generation Tesla structure, internally known as “NV9X,” will embrace two or extra fashions, mentioned the 2 individuals and one of many preliminary sources.
Tesla additionally plans to construct cheaper vehicles at its manufacturing unit close to Berlin, and is concerned with constructing a manufacturing unit in India to supply cheaper electrical vehicles, sources mentioned beforehand.
The EV maker additionally has factories in Shanghai and in Fremont, California.