Tesla (NASDAQ:TSLA) has informed its suppliers of plans to commence production of a new mass-market electric vehicle, codenamed "Redwood," by mid-2025, as reported by Reuters on Wednesday, citing four individuals familiar with the matter, with two sources describing the model as a compact crossover.
Tesla CEO, Elon Musk, has consistently teased the prospect of affordable electric vehicles and self-driving robotaxis, anticipated to be developed on next-generation, cost-effective electric car platforms, stirring excitement among fans and investors alike.
Tesla aims to introduce various models, including an affordable $25,000 car, positioning itself to compete with less expensive gasoline-powered vehicles and the growing market of affordable EVs, such as those produced by China's BYD, who passed Tesla as the world's leading EV maker in the final quarter of 2023.
Elon Musk initially pledged to develop a $25,000 car in 2020, a plan that was temporarily put on hold but later revived. Currently, Tesla's most budget-friendly option, the Model 3 sedan, starts at $38,990 in the United States.
Last year, Tesla initiated the procurement process for the "Redwood" model by sending out "requests for quotes" or invitations for bids to suppliers. According to two sources, the company projected a weekly production volume of 10,000 vehicles.
Three sources close to the project revealed that production is scheduled to commence in June 2025.
Shares of TSLA are up 1.69% in pre-market trading Wednesday morning.