Tesla to Build Next-Gen Cars Starting in Mid-2025, Report Says
Despite all the buzz that the Cybertruck generates, it’s not what Tesla needs to retain its EV sales crown. Price cuts to popular models like the Model 3 and Model Y in the past year certainly help, but a lot of people are waiting for another vehicle altogether.
According to a new report by Reuters, Tesla has informed suppliers that it aims to start production of a new mainstream vehicle in June 2025, likely to be the $25,000 Tesla promised by Elon Musk a few years ago. It is known internally under the codename "Redwood."
Don’t look for a conventional car, as it appears the new model will be a small crossover slotting below the Model Y (pictured below). This cheap, entry-level vehicle will be Tesla’s response to growing competition in the EV segment, most notably from Chinese automaker BYD, which out-sold Tesla globally in the fourth quarter of 2023.
Two of the sources that spoke with Reuters said Tesla plans to make 10,000 units a week—meaning 520,000 units a year—without specifying the locations. Musk has previously hinted that production would initially begin at Gigafactory Austin in Texas.
In May of last year at the company’s annual shareholder meeting, the controversial Tesla CEO talked about a design and manufacturing techniques that are “head and shoulders above anything else that is present in the industry." We fully expect the upcoming low-price Tesla to be built using gigacasting, which significantly reduces the number of body panels and therefore production costs. On the other hand, it’s still too early to go into details like power, battery capacity or range.
If all goes according to plan (always a big “if”), Tesla should also launch its first robotaxis in 2025, going head to head with companies such as Waymo, whose self-driving cars we tested during a trip to California last fall.
