Tesla plans to build new electric vehicles in mid-2025

Tesla has told suppliers it wants to start production of a new mass market electric vehicle codenamed "Redwood" in mid-2025, according to four people familiar with the matter, with two of them describing the model as a compact crossover, Report informs referring to Reuters.

Tesla CEO Elon Musk has long whetted fans' and investors' appetites for affordable electric vehicles and self-driving robotaxis that are expected to be made on next-generation, cheaper electric car platforms.

Those models, including an entry-level $25,000 car, would allow it to compete with cheaper gasoline-powered cars and a growing number of inexpensive EVs, such as those made by China's BYD.

BYD overtook Tesla as the world's top EV maker in the final quarter of 2023.

Musk had first promised to build a $25,000 car in 2020, a plan he later shelved and then revived. Tesla's cheapest offering, the Model 3 sedan, currently has a starting price of $38,990 in the United States.

Musk said last year he was concerned about the impact of high interest rates on consumer demand for big-ticket items like cars.

Tesla sent "requests for quotes," or invitation for bids for the "Redwood" model, to suppliers last year, and forecast weekly production volume of 10,000 vehicles, two of the sources said.

Production would begin in June 2025, three of the sources said. All spoke on condition of anonymity because the matter is confidential.

Timing of next-generation compact vehicles was one of the most voted questions by investors to Tesla ahead of its quarterly results report on Wednesday afternoon, where it is expected to forecast a 21% rise in 2024 deliveries, well below the long-term annual target of 50% that Musk set about three years ago.