Tesla aims to commence production of its new mass-market electric vehicle, known internally as “Redwood,” in mid-2025, according to sources familiar with the matter.

Described by some as a compact crossover, the model is part of Tesla’s broader strategy to introduce affordable electric vehicles, including an entry-level $25,000 car. The Redwood model is set to compete with more economical gasoline-powered cars and other affordable EVs, as seen with China’s BYD, which overtook Tesla as the world’s top EV maker in Q4 2023.

Elon Musk’s earlier pledge to produce a $25,000 car by 2020 was deferred but has been revisited as part of Tesla’s pursuit of next-generation, cost-effective electric car platforms. The Redwood’s production, slated to begin in June 2025, is forecasted at 10,000 vehicles per week. Tesla sent out “requests for quotes” to suppliers and has been working on two new products with the potential for combined annual sales of 5 million vehicles. Musk emphasized that both the design and manufacturing techniques of these products surpass industry standards.

While Tesla has a history of missing launch targets and pricing projections, the company is committed to introducing more affordable EVs. The company’s affordable model will initially be manufactured in Texas, and it aligns with Tesla’s strategy to make cheaper cars in its Berlin factory and explore opportunities in India. The Redwood model and its counterparts aim to tap into a wider market segment, helping Tesla sustain its position as a leading player in the electric vehicle industry.