Tesla is reportedly working on a new affordable electric vehicle (EV) model codenamed “Redwood,” that aims to compete with mass-market brands, with CEO, Elon Musk, setting a target price of around $25,000 for this new model, according to sources.
The “Redwood” model is expected to play a key role in Tesla’s strategy to offer more cost-effective electric cars and compete with cheaper gasoline-powered vehicles and affordable EVs from other manufacturers, such as China’s BYD, which Tesla has previously fell behind in terms of global electric vehicle production.
Elon Musk had initially promised a $25,000 car in 2020, but delays prevented Tesla from meeting developing it. The current cheapest Tesla offering, the Model 3 sedan, starts at $38,990 in the United States. The company has sent requests for quotes to suppliers for the “Redwood” model, with a projected weekly production volume of 10,000 vehicles. If the timeline proceeds as planned, production is expected to commence in June 2025.
Despite Tesla’s previous announcements to halve the cost of its next-generation vehicles, the sources suggest that Musk and the company have a track record of missing targets for launches and pricing. Tesla’s recent Cybertruck, to cite an example, has experienced delays and a starting price higher than initially touted.
The sources indicate that Tesla has studied other affordable vehicles, such as the Honda Civic, to gain insights into making cost-effective cars. The challenge lies in profiting from cheaper EVs, considering battery costs and the difficulties associated with producing quality yet inexpensive vehicles.
Tesla’s plans also include building cheaper cars at its factories in Texas and Berlin, with potential interest in establishing a factory in India for the production of more affordable electric vehicles. The company continues to explore ways to expand its market reach and make electric vehicles more accessible to a broader audience.
As with any Tesla project, there is anticipation and scepticism about meeting the proposed timelines and price points, given the company’s history of optimistic targets and delays. Nevertheless, the potential introduction of an affordable Tesla EV could have a significant impact on the electric vehicle market, making sustainable transportation options more accessible to a wider consumer base.
