Anonymous sources within Tesla said the car, codenamed “Redwood,” is expected to begin production in mid-2025, with a target selling price in its home country of $25,000 (£19,618).
This would compare with its current cheapest vehicle, the Model 3, which starts from US$38,990 in the US and £39,990 in the UK — raising the intriguing possibility that we could have a Tesla priced from around £25,000, if the company decides to sell it in the UK.
The Reuters news firm reported that four other people had provided confidential information and declined to give their names. Tesla has not made any official comment on the Redwood rumors.
However, CEO Elon Musk has repeatedly stated in the past that he wants his company to make more affordable electric vehicles, adding autonomous robot taxis.
To do this, Tesla will want to create cheaper next-generation electric vehicle racks that they can be placed on. The existing “platform” used for the Model 3 and Model Y currently prevents smaller cars from being made.
Redwood has been described by Tesla experts as a compact crossover, which is the most popular sector of the global automotive market and will come with the upcoming electric versions of the Ford Puma and Nissan Juke, as well as the new Volvo EX30 EV.
The hope is that the new, more affordable Tesla can compete with cheaper gasoline and diesel cars, as well as other cheap electric cars from China.
The leak follows the announcement that Chinese company Build Your Dreams, also known as BYD, has overtaken Tesla as the world’s leading EV manufacturer in the last quarter of 2023.
Musk has promised an affordable electric vehicle in 2020, so caution should be exercised before taking its base value at face value. In 2019, it said the Cybertruck would launch with a starting price of $40,000, but after all it went on sale beyond last year, $60,990 was owed, 50 cents more than originally proposed.
Tesla’s CEO said the reason to make a less expensive electric vehicle is because emerging interest rates can affect customer demand for more expensive items, such as cars.
According to sources, Tesla sent out “requests for quotation” or RFPs for the year of Redwood’s proposal.
Expected weekly production volumes would be around 10,000 vehicles, and the line will be available by the middle of next year.
However, the delays in the long-awaited Cybertruck are proof of that, one of the resources told Reuters: “They have been too positive about the maximum of their new product launches. Production volume is most likely to start in 2026. “
In May 2023, Musk himself said that Tesla is running two new products, with a combined sales target of five million cars per year. He said at the annual shareholders’ meeting: “Both product design and production techniques are above anything else in the industry. “
The leak of the Redwood information looks like suspiciously good timing on the part of Tesla.
Ahead of today’s quarterly earnings report, the timing of the launch of next-generation compact cars is one of the most debated issues among investors.
Tesla is expected to forecast a 21 per cent rise in 2024 deliveries in the report, although this is some way shy of Musk’s 50 per cent year-on-year growth plan that he set out three years ago.
The CEO also claimed in 2022 that Tesla would be making a self-driving, futuristic-looking taxi by 2024, while he and other executives at the company laid out plans in March 2023 which said the cost of its next-generation vehicles would be halved.
Making the Redwood EV at specific prices probably won’t be easy. The cost of lithium-ion batteries for electric cars remains high, although making affordable, high-quality products also requires the company to have long-standing problems.
To that end, it’s unclear where the Redwood model and, indeed, all upcoming cars founded on the platform known as “NV9X” would be built internally at Tesla.
Musk said in 2023 that its cheapest EV would be built at the company’s factory in Texas.
However, Tesla also plans to build cars at one of its facilities near Berlin, while exploring the option of opening a production facility in India to make cheaper electric vehicles. The company also has factories in Shanghai, China, and Fremont, California. .
Tesla has been reached for comment.