Tesla's Ambitious Plans for Affordable EV "Redwood" Production in Mid-2025

In a strategic move towards expanding its electric vehicle (EV) lineup, Tesla has informed suppliers of its intent to commence production of a new mass-market EV, internally referred to as "Redwood," by mid-2025.

Speculations suggest that this EV might take the form of a crossover vehicle, aligning with Tesla CEO Elon Musk's vision of introducing affordable EVs and self-driving robotaxis based on cost-effective platforms.

Musk, who initially pledged a $25,000 car in 2020, aims to compete with cheaper gasoline-powered cars and rival EV manufacturers. Tesla's Model 3, currently its most affordable option, starts at $38,990 in the U.S.

Tesla's Pursuit of Affordable EVs and Robotaxis

Elon Musk has consistently aimed for affordable EVs, including an entry-level $25,000 car, to diversify Tesla's market reach. Despite facing delays, Musk's revived plan involves creating cost-effective EV platforms, enabling Tesla to vie with competitors like China's BYD. BYD surpassed Tesla as the world's leading EV manufacturer in Q4 2023. Musk's concerns about high-interest rates affecting consumer demand for cars highlight Tesla's strategic focus on affordability.

"Redwood" Model Details and Production Forecast

Tesla initiated the procurement process for the "Redwood" model by sending out "requests for quotes" to suppliers last year. The company anticipates a weekly production volume of 10,000 vehicles, with production slated to commence in June 2025.

This ambitious venture aligns with Musk's broader goal of introducing next-generation compact vehicles. The timing of these compact EVs has been a key investor query ahead of Tesla's quarterly results.

Tesla's Vision: Futuristic Taxi and Affordable EVs

Elon Musk's announcements hint at Tesla's groundbreaking plans, including the development of an inexpensive robotaxi and a budget-friendly, $25,000 electric car sharing the same vehicle architecture. Musk's assurance of revolutionary design and manufacturing techniques positions these products as industry-leading. The company's aim to create a dedicated self-driving taxi with a futuristic appearance is anticipated by 2024.

Investor Expectations and Production Outlook

Investors are closely watching Tesla's quarterly results, expecting a 21% increase in 2024 deliveries. However, this projection falls short of Musk's ambitious three-year-old target of achieving a 50% annual rise. Despite the anticipated growth, questions linger about Tesla's ability to meet its production milestones, especially given the highly competitive and evolving landscape of the EV market.

Beyond "Redwood": A Glimpse into Tesla's Futuristic Ambitions

Musk doesn't just play in the present; he envisions the future. In May, he hinted at two new projects with the potential to sell a combined 5 million vehicles annually. "Both the design of the products and manufacturing techniques are head and shoulders above anything else that is present in the industry," he declared during Tesla's annual shareholder meeting.

Among these futuristic marvels is an affordable robotaxi, a self-driving marvel poised to revolutionize transportation. And there's even talk of a $25,000 entry-level EV sharing the same platform, creating a cost-effective duo set to disrupt the automotive landscape. These whispers are further substantiated by Walter Isaacson's biography of Musk, released in September. Based on interviews with the CEO and executives, the book paints a picture of Tesla's ambitious plans for the years ahead.

In 2022, Musk promised a dedicated self-driving taxi with a futuristic twist for 2024, hoping to finally make good on his long-held goal of achieving full self-driving capability. While past deadlines have slipped, the excitement surrounding this project remains palpable.