Tesla to launch new $25,000 EV next year
Tesla is gearing up to launch a new affordable electric vehicle (EV) called "Redwood" by mid-2025, as per industry insiders. The upcoming compact crossover is expected to hit production in June 2025. This aligns with CEO Elon Musk's vision of creating budget-friendly EVs and self-driving robo-taxis on new-generation, cost-effective platforms. With a price tag of around $25,000 (about Rs. 21 lakh), the forthcoming entry-level model will compete against popular mid-size ICE-powered vehicles.
Tesla aims to manufacture 10,000 units of 'Redwood' per week
Last year, Tesla sent out "requests for quotes" for the "Redwood" model to suppliers. The EV maker is anticipating a weekly production of 10,000 vehicles, according to multiple sources. This move positions Tesla to compete with budget gasoline cars and affordable EVs like those from China's BYD. For reference, BYD surpassed Tesla as the leading global EV manufacturer in Q4 2023.
Affordable model and robo-taxi plans
Musk's plans for a $25,000 entry-level electric car and an affordable robo-taxi based on the same architecture were revealed in Walter Isaacson's biography of Musk. In May, Musk shared that Tesla was developing two new products with a combined sales potential of five million vehicles annually. He boasted that their design and manufacturing techniques were "head and shoulders above anything else that is present in the automotive industry."
Challenges in producing cheaper EVs
However, profitability from low-cost EVs could be challenging due to battery expenses and the inherent difficulties in producing quality budget vehicles. Tesla has been studying the Honda Civic, priced at $23,950 in the US, to learn how to make cheaper cars. The upcoming Tesla architecture, known internally as "NV9X," will feature two or more models. The EV maker also plans to manufacture affordable cars at its Berlin factory and is considering an Indian factory for cost-effective EVs.
