Andy Nurman
January 24, 2024
Electric automaker Tesla is planning to launch a new mass-market compact crossover EV in mid-2025 priced around $25,000, according to a recent report from Reuters.
The news agency cited insider sources familiar with the company’s plans who revealed that Tesla has requested bids from suppliers to support a weekly production target of 10,000 vehicles for the new model, codenamed “Redwood.”
“Tesla sent ‘requests for quotes,’ or invitation for bids for the ‘Redwood’ model, to suppliers last year, and forecast weekly production volume of 10,000 vehicles, two of the sources said,” Reuters reported this week.
The launch timeline means Tesla is aiming to put the affordable electric crossover into volume production in June 2025, according to details provided by Reuters’ anonymous sources close to the plans.
Our Thoughts
This electric crossover represents Tesla’s long-promised $25,000 “affordable” EV aimed at the mass market. CEO Elon Musk previously said bringing a more economical model to production would be Tesla’s “biggest priority” after the Model 3 and Model Y ramp.
The project timeline is still years away, however. With a mid-2025 production start, the wait for this crossover will test buyers’ patience. Nonetheless, the SUV-style body and targeted base pricing could allow the model to sell in far greater quantities than Tesla’s pricier entries.
Past hints pointed to a small two-seater, but a compact crossover makes more sense for broad appeal and everyday practicality. As the brand looks beyond luxury segments, an affordable electric SUV is smart positioning to compete with major players like Ford, VW and Hyundai racing toward the $25k price mark as well. BYD is already there though with their $12k Seagull hatchback.
If Tesla can deliver on quality and costs, this Redwood crossover stands to bring the company’s EV tech to mainstream affordability at long last. But making a true high-volume $25k model profitably at scale remains an immense challenge even for Tesla.
