TL;DR: Tesla is reportedly aiming to start mass production on a new electric vehicle in mid-2025 and wants suppliers to be ready, multiple sources familiar with the situation recently told Reuters. Two of the people described the new vehicle as a compact crossover. Others have said it could look more like a compact Model Y than a hatchback-style Model 3.
Some of the sources said Tesla reached out to suppliers last year to get bids for the new model, codenamed Redwood. Three sources said mass production is slated to begin in June of next year. If that timeline is accurate, then we can probably expect an official announcement sometime later this year.
All of the sources spoke anonymously due to the confidential nature of the subject.
Last year, Tesla boss Elon Musk expressed concern regarding high interest rates and the impact it could have on big purchases like vehicles. The current climate could set the stage for a new wave of low-cost electrics that could better compete with entry-level gas-powered vehicles.
According to a report from Notebook Check, Redwood (also referred to by some as the Model 2) could start around $22,000 before any potential subsidies. The vehicle might use Chinese-made batteries, however, which could disqualify it from getting a full $7,500 tax credit from the US government. Even without it, such a price point would be highly attractive to many.
The same article says the Model 2 will feature a range of around 300 miles and be built on the Tesla NV9X EV platform. The publication even claims Tesla purchased a Honda Civic at one point just to tear it down and learn how to build less expensive vehicles without sacrificing quality. That would not be totally unheard of for an automaker considering Chevrolet reportedly had a very close look at the Ferrari 458 Italia when designing its mid-engine C8 Corvette.
Tesla's fourth quarter earnings report is due out later today after the bell.
Image credit: Duren Williams, Maik Poblocki