Tesla’s $25,000 electric car is back in use – and production could begin as early as next year, according to a report citing several different sources within the company.
According to the Reuters Tesla reportedly sent out a request for proposals to suppliers last year for a model codenamed Redwood, and at the time forecast weekly production of 10,000 vehicles – implying potential annual production for the model of more than 500,000.
The news certainly doesn’t come out of the blue. Tesla has the potential to be one “compelling” $25,000 Tesla with fully autonomous driving capability, planned in three years, the focus of Battery Day 2020. While 2023 has come and gone. The automaker has put into action most of the other battery technologies featured in this presentation that would enable the groundbreaking car to be powered by LFP batteries.
Tesla has announced $25,000 for Battery Day 2023
In 2021, the top Tesla executive in China confirmed this Chinese development for an entry-level Tesla under the Model 3. In October 2022, Musk then confirmed that the company was working on a third platform for smaller vehicles (and internally called NV9X, according to the report), with production volumes expected to exceed that of all other vehicles combined. That would make the future possible Tesla electric vehicles should cost half as much make.
But it’s been a confusing progression and it’s unclear whether China is even still connected. Musk had stated just a few months earlier, in January 2022, that they were not working on the $25,000 EV and said availability would be less important self-driving robotaxis. Executives stuck with the idea of an affordable model but seemed to imply that the project had been pushed to the back burner. In the meantime, there was increased control by the federal government Tesla’s self-driving claims may have resulted in the company prioritizing the project again.
Producing a successful, affordable small car (or crossover, as it’s reportedly called) – and making it profitable – is one of the keys to expanding Tesla’s reach into new markets like India. But making the model fit as an entry-level electric vehicle for the United States and Europe is a challenge that has caused legacy automakers to shy away from it.
The Reuters report notes that Tesla tore down a Honda Civic during the development phase of this model. Honda is planning a 2025 Civic Hybrid available for the US market starting this year. But just earlier this month at CES, Honda CEO Toshihiro Mibe said such a thing A small, affordable electric vehicle would be difficult without making “a breakthrough type of technology” like solid-state batteries profitable.
According to the report, the model could be built in Texas, with Germany and a potential future factory in India potentially being considered for a global production ramp-up. It could be one of two products that Musk said last year were in the works, potentially shipping up to 5 million units per year worldwide.
Tesla Cybertruck
However, according to some reports, Tesla has a history of setting production schedules that are so accelerated as to be almost farcical, while the company often struggles to meet its original pricing targets. Most notably, Tesla lost some of the initial interest in the Model 3, which was supposed to start at $35,000 – although the company eventually matched that price. It originally revealed the Cybertruck Delivery of the $60,990 base model currently won’t begin until 2025. And then there’s the Roadster, which was unveiled in production-ready concept form in 2017 but still hasn’t arrived.
Will Tesla mention more about the affordable small car project in its presentation to investors today? As has been shown time and time again, one should not expect much growth to come.
