Elon Musk Signals Affordable EV Era as Tesla Aims for Mass Market with 'Redwood': Report

Tesla is aiming for the manufacturing of a mass-market electric car, codenamed "Redwood," around mid-2025, sources say.

The company's strategy matches CEO Elon Musk's promise to produce low-cost electric automobiles and self-driving robots, according to four sources cited by Reuters. Tesla can compete in the growing market for low-cost electric cars with the cheaper model. The Tesla Redwood will employ affordable, next-generation electric vehicle chassis, including a $25,000 sedan.

Shifting Focus

In Q4 2023, Chinese firm BYD emerged as the top EV maker globally, surpassing Tesla. This development highlights the growing competition within the sector. Despite Musk's initial promise of a $25,000 car in 2020, which was later put on hold and then revived, Tesla's most affordable option at the moment is the Model 3 sedan, with a starting price of $38,990 in the United States.

Elon Musk disclosed that Tesla filed "requests for quotes" for the "Redwood" model last year because of worries about high borrowing rates affecting customer demand. Undisclosed sources said the corporation wants to start manufacturing in June 2025 and produce 10,000 automobiles each week. Tesla has not commented on the matter.

Investors have been eager to learn about the timing of next-gen compact vehicles, making it a top inquiry ahead of Tesla's quarterly results report. The forecast for a 21% increase in 2024 deliveries falls short of Musk's ambitious three-year-old goal of achieving a 50% annual rise. Musk, in May, unveiled Tesla's work on two new products with a combined sales potential of 5 million vehicles per year, emphasizing superior design and manufacturing techniques.

As Tesla faces recent criticisms for the relatively stagnant Model 3 and Y designs, the report on the new Redwood model arrives at a crucial time. Investors' questions about the timing of new electric vehicles have been a focal point, particularly given the upcoming earnings call on January 24, according to Engadget.

Elon Musk Maintains Positive Outlook Amid Challenges

The Tesla Redwood aligns with Elon Musk's vision for a dedicated robotaxi designed exclusively for autonomous ride-hailing services. Tesla's future production plans include the "NV9X" architecture with multiple models, exploring Berlin for cheaper car production, and considering an Indian factory for affordable electric vehicles.

Despite mixed reviews surrounding the Cybertruck EV's initial shipments, Elon Musk's excitement about the upcoming affordable Tesla Redwood remains apparent.

TechTimes earlier reported that Tesla's Gigafactory in Texas has increased its production, particularly for the Cybertruck, since its inaugural delivery event in November. Subsequently, Tesla CEO Elon Musk has hinted at the prospect of the newly launched Cybertruck being showcased in China, although challenges exist for making the electric pickup road-legal in the country. Elon Musk suggested shipping prototype Cybertruck units to the country. However, he acknowledged the difficulty of making the Cybertruck compliant with Chinese road regulations, suggesting it may only be present in the country as a display.