Elon Musk Affirms Arrival of Low-Cost Tesla Model in 2025
Elon Musk has confirmed Tesla is developing a “next-generation low-cost” electric vehicle that he is “optimistic” will enter production in the second half of 2025. Speaking during an earnings call yesterday, he promised the car will boast “a revolutionary manufacturing system” far exceeding anything else in the world.
Citing insider sources, Reuters reported the new model will be a small crossover SUV codenamed “Redwood.” Tesla has allegedly requested quotes from suppliers based on a weekly output of 10,000 vehicles. Musk previously said Tesla was working on two EVs capable of selling 5 million units annually.
“Our current schedule shows starting production towards the end of 2025,” Musk stated, noting the vehicle will first be built at Tesla’s Austin Gigafactory before expanding to other sites globally. He hinted at aggressive efforts to scale output, saying “We’ll be sleeping on the line practically.”
Musk claimed the proprietary production techniques will be extremely difficult to replicate, as it requires copying complex machine integration. As with the Model 3 rollout, he expects a slow ramp-up before reaching mass production.
However, Musk warned of “notably lower” 2024 sales growth as demand for existing Models 3 and Y cools off, forecasting the next wave will come with 2025’s new vehicles.
He also projected advances in Tesla’s Full Self-Driving capabilities this year, boasting other automakers “should be asking for FSD licenses” from Tesla. Yet Musk has inflated FSD’s progress in the past, and it remains at Level 2 despite rival Mercedes gaining Level 3 approval in the US.
As Musk conceded, his optimism often leads to aggressive timelines. While he accurately targeted a 2017 Model 3 launch, his promise of a $35,000 base price took far longer to materialize. So while the next-gen EV may stay on schedule, affordability may prove a bigger challenge.