Tesla is reportedly gearing up to produce a new mass-market electric vehicle (EV) codenamed "Redwood" by mid-2025.
'Redwood' Model of Tesla
Citing four people familiar with the matter, with two describing the model as a compact crossover, Reuters reported that Tesla has already told suppliers about its plan to start the production of "Redwood" models, which aligns with the trend of smaller, more affordable EVs.
GRUENHEIDE, GERMANY - MARCH 22: Tesla CEO Elon Musk attends the official opening of the new Tesla electric car manufacturing plant on March 22, 2022 near Gruenheide, Germany. The new plant, officially called the Gigafactory Berlin-Brandenburg, is producing the Model Y as well as electric car batteries
Tesla CEO Elon Musk has long got fans and investors excited about the company's plan to manufacture affordable self-driving robotaxis and EVs, which include an entry-level car with a $25,000 price tag.
This move was seen as part of Tesla's broader strategy to compete with lower-cost gasoline-powered cars and the rising number of inexpensive EVs in the market.
The "Redwood" model is a crucial player in Tesla's lineup as the company responds to the rising demand for cost-effective electric transportation.
With China's BYD surpassing Tesla as the leading EV maker in the last quarter of 2023, the pressure on Tesla to deliver more accessible models has heightened.
Tesla's pursuit of a $25,000 car was initially promised by Musk in 2020, a commitment that underwent shifts in plans but has now resurfaced with the Redwood model.
This aligns with Tesla's broader strategy to diversify its product offerings, catering to a wider audience and staying competitive in the global EV market.
Last year, Tesla initiated the process by sending "requests for quotes" to suppliers for the Redwood model, forecasting a weekly production volume of 10,000 vehicles.
According to Reuters, the anticipated production commencement is slated for June 2025, with hopes that this move will help Tesla regain its position as a dominant force in the EV market.
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Affordable EVs of Tesla
However, Tesla's ambitious goals come with challenges, as the company has a history of missing launch targets and facing difficulties in meeting pricing projections.
The Cybertruck, for example, experienced production delays and had a starting price significantly higher than initially advertised. Elon Musk has previously revealed plans to introduce not only an affordable EV like the Redwood but also an inexpensive robotaxi.
The shared architecture for these vehicles is expected to contribute to economies of scale and streamline production processes. Musk has emphasized the innovative design and manufacturing techniques Tesla employs, claiming superiority over industry standards.
While Musk and Tesla executives have unveiled plans to reduce the cost of next-generation vehicles, specific timelines for the launch have not been disclosed.
The company's commitment to affordability is reflected in its exploration of cost-effective production methods, as evidenced by the study of a Honda Civic - a conventional gas-powered car with a starting price of $23,950 in the U.S., Reuters reported.
The next-generation Tesla architecture, referred to as "NV9X," is anticipated to introduce multiple models, expanding Tesla's product range and catering to various market segments.
In addition to the Redwood model, Tesla has plans to produce more affordable cars in its Berlin factory, with potential interest in establishing a factory in India.
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