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Summary. Tesla is betting on the future with the "Redwood," a new electric vehicle that will enter the market in 2025, aimed at the mass-market segment. The announcement illustrates Tesla's ambition to play a key role in the transition to affordable electric mobility.

Tesla wants to become more competitive in the growing market of affordable electric vehicles. With the introduction of this model, Tesla positions itself as a direct competitor to established car brands and new players, such as China's BYD, in a sector where price is a critical factor.

In the news. The "Redwood," a compact crossover, is Tesla's answer to the growing demand for more affordable electric vehicles.

  • With a production start in 2025 and a target of 10,000 vehicles per week, Tesla aims to diversify its offerings and enter new markets.
  • This model could strengthen Tesla's position as a pioneer in electric vehicles, despite previous challenges such as delayed production launches and higher prices than initially announced.

Rumors had been circulating for some time

Zoom in. The "Redwood" is scheduled to go into production in June 2025 and would cost around $25,000 (€23,000), according to Reuters news agency. Rumors of a low-cost Tesla model had been circulating for some time.

  • In that price range, the "Redwood" could compete with Chinese EVs as well as cheap gasoline cars.
  • Musk promised in 2020 Musk would build a $25,000 car, a plan he later shelved.
  • Insiders know that Tesla recently took apart a Honda Civic, which costs $23,950 in the U.S., to study methods of producing more affordable cars.
  • $25,000 is a significant reduction from the current cheapest model, the Model 3, which is currently offered in the US starting at $38,990 USD.
  • Tesla has already invited suppliers for bids to produce this new model.

Zoom out. Tesla's strategy, in addition to developing a cheaper electric car, also includes a self-driving cab based on the same vehicle architecture.

  • The question is how Tesla can make money on cheaper models and meet its own ambitious production targets.
  • Tesla also reportedly has plans for a factory in India, indicating a push for dominance in several markets.

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