We could see the affordable Tesla EV Redwood as a compact crossover as early as 2025.

American billionaire Elon Musk's car company reportedly plans to introduce a new mass-market electric car codenamed Redwood by mid-2025. The affordable Tesla EV could thus be depicted in this car as a compact crossover.

The move comes after China's BYD overtook Tesla as the biggest electric vehicle maker at the end of 2023, prompting Musk to reconsider his promise of a €23,300 entry-level EV from 2020. This promise has been postponed and has now been brought back into play with the Redwood project itself, Reuters writes.

The Tesla Redwood project, described by insiders as a compact crossover, is poised to reshape the landscape of affordable electric cars. With it, the company is said to be entering the mid-market segment, targeting consumers looking for economical alternatives to traditional gasoline vehicles and the growing range of affordable electric models, especially those made by China's BYD.

Musk's ambition to provide affordable electric cars has long enticed company fans and investors alike. The affordable Tesla EV, with a starting price of 23,300 euros, should be built on the next generation of a more cost-effective EV platform, effectively positioning the company to compete more aggressively with both conventional gasoline cars and competitors in the EV segment.

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Tesla has reportedly already begun discussions with suppliers, sending out a “request for proposal” for the Redwood model. Sources indicated a projected weekly production of 10,000 vehicles, with production beginning in June 2025.

The timing of the presentation of Tesla's new generation compact vehicles was the subject of great interest from investors. Musk previously announced that Tesla is working on two new products with a total sales potential of five million vehicles per year. He praised the design and manufacturing techniques of these products, stating that they are superior to anything else in the industry. However, Musk's previous failure to meet launch targets and pricing estimates, such as with the Cybertruck vehicle, cast doubt on the proposed timeline as well as the “affordable vehicle” price range. Based on this, it is quite possible that significant serial production will not begin before 2026.

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One key aspect of the company's plan is to produce an affordable “robotaxis” alongside the Redwood electric car, both based on the same vehicle architecture. This strategy, reminds EVArena, is in line with the company's ambition to revolutionize transportation through autonomous driving technology. However, Musk's previous statements about achieving fully autonomous driving have yet to materialize, although the latest FSD V12 shows a lot of promise.

Making a profit from cheaper electric vehicles will be challenging for the company, given that battery costs remain a significant hurdle, as well as the traditional difficulties associated with producing quality, more affordable vehicles. Tesla even went so far as to take apart a Honda Civic model, a lower-priced gasoline car, to understand the nuances of creating cheaper vehicles.

Analysts expect Tesla's next-generation architecture, internally dubbed “NV9X,” to include multiple models, further complicating the company's ambitious plans. In addition, Tesla intends to produce more affordable cars at its factory near Berlin in Europe and is exploring the possibility of building a factory in India to produce cheaper electric vehicles.