For years now, automakers have made it quite clear that the high cost of raw materials and the subsequent sticker prices of all-electric vehicles are major barriers to widespread EV adoption – including Ford CEO Jim Farley. That’s precisely why The Blue Oval previously noted that its ultimate goal is to build a $20k model at some point, though that declaration happened a long time ago – in July 2021, in fact. Since then, the prices of raw materials and EVs in general have gone up instead of down, for the most part, though Tesla did recently slash pricing of some of its models. That same EV company has long claimed that it’s working on an affordable, $25k model, and now, Reuters is reporting these more cheaper models may arrive as soon as next year.
Tesla CEO Elon Musk first revealed that the automaker was working on a $25k EV back in 2020, though he later nixed that plan, only to revive it. Now, Tesla has reportedly told its suppliers that it plans to begin production of an affordable new model code-named “Redwood” in mid-2025, which will be a compact crossover of some sort, according to sources.
Musk later confirmed this report via Tesla’s post earnings call this week, and noted that production of the affordable EV is slated to begin at the company’s Gigafactory in Texas in the second half of 2025, with a target rate of around 10,000 units per week. Afterward, production of the same model will spread to Mexico and another unnamed location outside of the U.S. as well.
It is worth noting that Tesla and Musk have long been a bit optimistic when it comes to launch dates such as this one, particularly in the case of the Cybertruck. The EV pickup was originally revealed in 2019, but didn’t enter production until late last year, though Musk remains adamant that the company will meet its proposed timeline this time around. “I’m often optimistic regarding time,” Musk said on the company’s recent earnings call. “But our current schedule shows that we will start production towards the end of 2025,” adding that “we’ll be sleeping on the line practically.”