Tesla CEO Elon Musk has confirmed that the electric car maker plans to start production of its next electric car, codenamed Redwood, in the second half of 2025.
The future car – which could be called the Tesla Model 2 in production – is expected to cost less than £25,000 when it goes on sale in Britain.
Tesla has long expressed a desire to create an entry-level EV, with Musk initially proposing a $20,000 EV in 2020.
In 2023, he told shareholders that Tesla was “developing two new products,” one the recently launched updated Tesla Model 3 and the other the Redwood Project.
Musk said yesterday (Jan 24) in the US company’s 2023 earnings report that he is “often optimistic” that the new car will go into production as planned.
The need for cheaper models has come into focus this year as BYD, a Chinese automaker with a wide variety of models in different price ranges, has overtaken Tesla to become the world’s best-selling electric car manufacturer in the last quarter of 2023 .
Potential production sites for the Redwood car have been suggested for Mexico. This will probably be decided later this year.
In a quarterly earnings report earlier this week, Tesla stated: “In 2024, our vehicle volume growth rate may be significantly lower than the growth rate achieved in 2023 as our teams work to launch the next generation of vehicles.”
Reports from Reuters have suggested that Tesla has already sent “requests for quotations” to suppliers for the Redwood project.
Industry experts say it will be challenging to make a profit from cheap electric vehicles, given the cost of batteries, the technology offered in cars and the tools and machinery needed to build something in sufficient quantities.