(RTTNews) - Tesla, Inc. (TSLA) has informed suppliers of its intention to commence production of a new affordable electric vehicle known as "Redwood" and is aiming for a June 2025 start for the production of the new compact crossover.
According to Reuters, this move is aimed at competing with lower-priced gasoline cars and an increasing number of affordable electric vehicles, including those from Chinese automaker BYD, which surpassed Tesla as the world's leading electric vehicle maker in the final quarter of 2023.
CEO Elon Musk has long teased the prospect of budget-friendly electric vehicles and self-driving robotaxis, which are expected to be built on next-generation, more cost-effective electric car platforms. Currently, Tesla's most affordable offering, the Model 3 sedan, starts at $38,990 in the United States.
Last year, Tesla reached out to suppliers for quotes on the "Redwood" model and projected a weekly production volume of 10,000 vehicles, as per sources. However, many believe that a mid-2025 production start seems overly optimistic as Tesla has a history of making ambitious promises and failing to deliver. The $25,000 electric vehicle has been in the pipeline for at least six years, with production repeatedly delayed.
Anyway, this report comes at a convenient time for Tesla, as the company has faced criticism for its relatively outdated Model 3 and Y designs. The potential timing of new electric vehicles was one of the most highly anticipated topics for Tesla's upcomingearnings callon January 24. If the new vehicles meet Musk's vision, they could help address these concerns.
Meanwhile, Tesla has started to deliver its Cybertruck, which has received mixed reviews, with some users criticizing quality issues and others praising its performance and boldness.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
