Tesla to manufacture new EVs by mid-2025, exclusively
January 24, 2024 – 4:00 AM PST
SAN FRANCISCO/DETROIT (Reuters) – Tesla (TSLA.O) has informed suppliers of its plans to kickstart production of an exciting new electric vehicle called “Redwood” in mid-2025, according to four insiders. Two of them have described the model as a compact crossover.
Tesla CEO Elon Musk has long tantalized fans and investors with the promise of affordable electric vehicles and self-driving robotaxis. These vehicles are expected to be built on next-generation, cost-effective electric car platforms.
These models, including a budget-friendly $25,000 car, would position Tesla to compete with cheaper gasoline-powered cars and the growing number of affordable EVs, such as those produced by China’s BYD (002594.SZ).
BYD surpassed Tesla as the world’s leading EV manufacturer in the final quarter of 2023.
Musk initially pledged to create a $25,000 car by 2020, a plan that was later put on hold and then revived. Currently, Tesla’s most affordable offering, the Model 3 sedan, starts at $38,990 in the United States.
Last year, Musk expressed concerns about the impact of high interest rates on consumer demand for big-ticket items like cars.
Tesla sent out “requests for quotes” to suppliers for the “Redwood” model last year, with a projected weekly production volume of 10,000 vehicles, according to two sources.
Production is set to commence in June 2025, as confirmed by three sources. All sources spoke on the condition of anonymity due to the confidential nature of the matter.
Tesla has not responded to requests for comment.
The timing of the release of next-generation compact vehicles was one of the most highly anticipated questions from investors ahead of Tesla’s quarterly results report on Wednesday afternoon. The company is expected to forecast a 21% increase in deliveries for 2024, which falls significantly short of Musk’s long-term annual target of 50% set three years ago.
In May, Musk revealed that Tesla was working on two new products that could potentially sell a combined total of 5 million vehicles per year. He stated, “Both the design of the products and manufacturing techniques are head and shoulders above anything else that is present in the industry” during Tesla’s annual shareholder meeting.
According to Walter Isaacson’s biography of Musk, released in September, Tesla plans to develop an affordable robotaxi and an entry-level, $25,000 electric car based on the same vehicle architecture. Musk also announced in 2022 that Tesla would introduce a dedicated self-driving taxi with a futuristic design in 2024, after facing several setbacks in achieving full self-driving capability.
Last March, Musk and other Tesla executives outlined plans to halve the cost of their next-generation vehicles, but did not provide a specific timeline for their launches.
STUDYING A HONDA CIVIC
Tesla has a history of missing its launch and pricing targets, and it will take time to ramp up production volume.
For example, Cybertruck production has experienced delays and slow acceleration, with its starting price in the US currently at $60,990, which is 50% higher than what Musk initially claimed in 2019.
“They have been overly optimistic on most of their new product launches. Volume output is more likely to begin in 2026,” stated one of the sources.
Last year, Musk revealed that the affordable model would initially be manufactured at Tesla’s factory in Texas.
Generating profits from the production of cheaper EVs will be a challenge, considering the costs of batteries and the traditional difficulties associated with producing high-quality, inexpensive vehicles.
According to two separate sources, Tesla recently dismantled a Honda (7267.T) Civic, which starts at $23,950 in the United States, in order to study how to manufacture more affordable cars.
The next-generation Tesla architecture, internally referred to as “NV9X,” will include two or more models, as confirmed by the initial sources.
Additionally, Tesla plans to manufacture cheaper cars at its factory near Berlin and has expressed interest in establishing a factory in India to produce more affordable electric vehicles, as previously reported by sources.
The EV manufacturer currently operates factories in Shanghai and Fremont, California.
Reporting by Hyunjoo Jin and Joe White; Editing by Peter Henderson and Jamie Freed
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What is the projected production volume of the Tesla “Redwood” model?
Tesla to Begin Production of New Electric Vehicle “Redwood” in Mid-2025
January 24, 2024 – 4:00 AM PST
SAN FRANCISCO/DETROIT (Reuters) – Tesla has informed suppliers of its plans to kickstart production of an exciting new electric vehicle called “Redwood” in mid-2025, according to four insiders. Two of them have described the model as a compact crossover.
Tesla CEO Elon Musk has long tantalized fans and investors with the promise of affordable electric vehicles and self-driving robotaxis. These vehicles are expected to be built on next-generation, cost-effective electric car platforms.
These models, including a budget-friendly $25,000 car, would position Tesla to compete with cheaper gasoline-powered cars and the growing number of affordable EVs, such as those produced by China’s BYD. BYD surpassed Tesla as the world’s leading EV manufacturer in the final quarter of 2023.
Musk initially pledged to create a $25,000 car by 2020, a plan that was later put on hold and then revived. Currently, Tesla’s most affordable offering, the Model 3 sedan, starts at $38,990 in the United States.
Last year, Musk expressed concerns about the impact of high interest rates on consumer demand for big-ticket items like cars.
Tesla sent out “requests for quotes” to suppliers for the “Redwood” model last year, with a projected weekly production volume of 10,000 vehicles, according to two sources.
Production is set to commence in June 2025, as confirmed by three sources. All sources spoke on the condition of anonymity due to the confidential nature of the matter.
Tesla has not responded to requests for comment.
The timing of the release of next-generation compact vehicles was one of the most highly anticipated questions from investors ahead of Tesla’s quarterly results report on Wednesday afternoon. The company is expected to forecast a 21% increase in deliveries for 2024, which falls significantly short of Musk’s long-term annual target of 50% set three years ago.
In May, Musk revealed that Tesla was working on two new products that could potentially sell a combined total of 5 million vehicles per year. He stated, “Both the design of the products and manufacturing techniques are head and shoulders above anything else that is present in the industry” during Tesla’s annual shareholder meeting.
According to Walter Isaacson’s biography of Musk, released in September, Tesla plans to develop an affordable robotaxi and an entry-level, $25,000 electric car based on the same vehicle architecture. Musk also announced in 2022 that Tesla would introduce a dedicated self-driving taxi with a futuristic design in 2024, after facing several setbacks in achieving full self-driving capability.
Last March, Musk and other Tesla executives outlined plans to halve the cost of their next-generation vehicles, but did not provide a specific timeline for their launches.
Tesla has a history of missing its launch and pricing targets, and it will take time to ramp up production volume.
For example, Cybertruck production has experienced delays and slow acceleration, with its starting price in the US currently at $60,990, which is 50% higher than what Musk initially claimed in 2019.
“They have been overly optimistic on most of their new product launches. Volume output is more likely to begin in 2026,” stated one of the sources.
Last year, Musk revealed that the affordable model would initially be manufactured at Tesla’s factory in Texas.
Generating profits from the production of cheaper EVs will be a challenge, considering the costs of batteries and the traditional difficulties associated with producing high-quality, inexpensive vehicles.
According to two separate sources, Tesla recently dismantled a Honda Civic, which starts at $23,950 in the United States, in order to study how to manufacture more affordable cars.
The next-generation Tesla architecture, internally referred to as “NV9X,” will include two or more models, as confirmed by the initial sources.
Additionally, Tesla plans to manufacture cheaper cars at its factory near Berlin and has expressed interest in establishing a factory in India to produce more affordable electric vehicles, as previously reported by sources.
The EV manufacturer currently operates factories in Shanghai and Fremont, California.
Reporting by Hyunjoo Jin and Joe White; Editing by Peter Henderson and Jamie Freed
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