Electric car: Tesla plans to start new line in 2025 – 01/24/2024 – Market

Tesla has told suppliers it wants to begin production of a new mass-market electric vehicle codenamed “Redwood” in mid-2025, according to four people familiar with the matter, two of whom described the model as a compact crossover.

Tesla Chief Executive Elon Musk has long whetted the appetite of fans and investors for affordable electric vehicles and autonomous robotaxis that are expected to be built on cheaper, next-generation electric car platforms.

These models, including a basic US$25,000 car, would allow it to compete with cheaper gasoline-powered cars and a growing number of cheap electric vehicles, such as those made by China’s BYD.

BYD surpassed Tesla as the world’s largest electric vehicle manufacturer in the last quarter of 2023.

Musk had initially promised to build a $25,000 car by 2020, a plan he later shelved and has now revived. Tesla’s cheapest offering, the Model 3 sedan, currently starts at $38,990 in the United States.

Last year, Musk said he was concerned about the impact of high interest rates on consumer demand for big-ticket items like cars.

Tesla sent “requests for quotations,” or invitations to bid for the “Redwood” model, to suppliers last year and forecast weekly production volume of 10,000 vehicles, two of the sources said.

Production would begin in June 2025, three of the sources said.

Tesla did not respond to a request for comment.

The automaker has a history of failing to meet its launch and price targets, and it would take time to increase volume.

Production of the Cybertruck, for example, was delayed and took a long time to accelerate and its starting price of US$60,990 in the US is 50% higher than that announced by Musk in 2019.

“They have been overly optimistic on most new product launches. Volume production is most likely to begin in 2026,” one of the sources said.

Musk said the affordable model would initially be built at Tesla’s factory in the US state of Texas.

But turning a profit on cheaper EVs will be a challenge, given battery costs as well as traditional difficulties in producing cheap, quality vehicles.

In recent years, Tesla has dismantled a Honda Civic, which starts at $23,950 in the US, to study how to make cheaper cars, two separate sources said.

The next-generation Tesla architecture, internally called “NV9X,” will include two or more models, three sources said.

Tesla also plans to build cheaper cars at its factory near Berlin and is interested in building a plant in India to produce cheaper electric cars, sources have previously said.

The EV maker also has factories in Shanghai, China, and Fremont, California, in the US.