Tesla plans to build new affordable model in 2025 – Model 2 “Redwood” to be firm’s USD25k vehicle?

Tesla has informed suppliers that it wants to start production of a new mass-market electric vehicle, codenamed “Redwood,” sometime in mid-2025. This was reported by Reuters, which cited information gleaned from four people familiar with the matter.

Two of the sources told the news agency that the planned model was a compact crossover, which falls in line with the body-style of the affordable vehicle that the electric automaker was rumoured to be planning a few years ago. In 2021, it was reported that the company was aiming to introduce a hatchback-styled offering, and it was suggested that the car could be the USD25,000 EV it had been long looking at.

A sketch revealed by the company in 2020 of a short wheelbase vehicle concept indicating an electric city car (as seen above) provides an idea of how the “Redwood” – which has been unofficially called the Model 2 by various quarters – could shape up. The new model is expected to sit on the company’s next-gen platform architecture, internally known as NV9X.

Tesla CEO Elon Musk has long whetted fans’ and investors’ appetites for affordable EVs built on next-generation, cheaper electric car platforms. In 2018, he revealed that the automaker could be making more affordable cars that cost under US$25,000 in three years’ time.

Tesla plans to build new affordable model in 2025 – Model 2 “Redwood” to be firm’s USD25k vehicle?

Currently, the automaker’s cheapest offering is the Model 3.

USD$25,000 is around RM119,000 at today’s exchange rates, which is around the upper end of the BYD Dolphin‘s price range in Malaysia.

While the timeline has moved along, it looks like the shelved plans are being resurrected, if what the sources say are correct. Musk had said last year he was concerned about the impact of high interest rates on consumer demand for big-ticket items like cars, which could be the prompt for the move.

At present, its cheapest offering is the Model 3, which currently has a starting price of USD38,990 (RM184,580) in the United States, and so building cheaper models – including an entry-level USD25k car – would allow Tesla to compete with cheaper gasoline-powered vehicles and a growing number of inexpensive EVs such as those made by China’s BYD, which overtook Tesla as the world’s top EV maker in the final quarter of 2023.

According to the sources, Tesla sent “requests for quotes,” or an invitation for bids, for the “Redwood” model, to suppliers last year, forecasting a weekly production volume of 10,000 vehicles. Production would begin in June 2025, three of the sources told Reuters.

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