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The vehicle, codenamed ‘Redwood,’ could be the entry-level $25,000 car that Tesla has previously teased, and would help it compete with Chinese automaker BYD.
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Tesla is eying a June 2025 kickoff for production of a new mass-market compact crossover, Reuters reports. The company has apparently invited suppliers to bid to work on the car, and is forecasting producing 10,000 vehicles weekly. Tesla did not respond to The Verge’s request for comment on Reuters’ report.
News that production of the next-generation vehicle could be just a year and a half away comes as Tesla is facing intense competition in the electric vehicle market from BYD, a Chinese automaker that Reuters reports overtook Tesla to become the world’s top EV maker by sales in the fourth quarter of 2023. While BYD has grown rapidly off the back of its affordable cars, The Wall Street Journal notes that it’s moving into selling more premium vehicles, bringing it into competition with Tesla.
The company’s CEO Elon Musk has previously teased a next-generation Tesla car with a more affordable $25,000 price point. He mentioned the price target in a 2018 interview with YouTuber Marques Brownlee, and in 2020 said that reducing the cost of an electric vehicle’s battery cells and packs would allow the company to reach this more aggressive price point.
Last year Musk’s biographer Walter Isaacson told Axios that the car would have a futuristic Cybertruck-style design and be developed alongside an autonomous robotaxi. The company teased a pair of new vehicles at an investor event in March, with one appearing to be a smaller car and the other a small commercial truck.
Although Musk has publicly talked about Tesla’s plans to offer a vehicle priced at $25,000, the company has struggled to hit aggressive price targets like these in the past. For years, Musk’s stated aim was to release a Model 3 car costing $35,000, but that model didn’t stick around for long. Meanwhile the Cybertruck was eventually released with a starting price of $60,990, up from the $39,900 it was announced with four years earlier.
Prior to starting deliveries of the Cybertruck late last year, Tesla’s last all-new car was the Model Y — a mid-size SUV that started deliveries in the US in early 2020. Its other three consumer vehicles, the Model S, Model X, and Model 3, started shipping in 2012, 2015, and 2017, respectively.