Tesla is reportedly gearing up to start production of a more affordable electric SUV in 2025, giving the US electric vehicle (EV) giant a cheaper model to challenge its Chinese rivals.

    Reuters reports word from four sources that Tesla’s suppliers have been told to prepare for the model – known only as ‘Redwood’ – which will go into production from June 2025.

    At least two of the four sources reportedly described the upcoming Redwood model as a ‘compact crossover’ – though it’s not yet known if it will be the long-awaited US$25,000 (A$38,000) EV first announced by Tesla CEO Elon Musk in 2020.

    The executive has backflipped on plans to introduce the more affordable EV multiple times, but recently told automotive engineer Sandy Munro development of the as-yet-unnamed model is “quite far advanced”.

    According to Reuters, Tesla has sent quote requests to its suppliers who will bid on being involved in the Redwood project.

    The publication’s sources have claimed Tesla is aiming to produce up to 10,000 examples of the finalised Redwood model weekly, totalling approximately 520,000 cars rolling off the production line annually.

    In 2023, more than 1.77 million Tesla Model 3 sedans and Model Y SUVs were produced, accounting for 96 per cent of the circa-1.85 million EVs built by the brand worldwide.

    It is not yet known where the electric SUV will be built, though previous reports have suggested the $US25,000 EV will first go into production at Tesla’s ‘Gigafactory’ in Texas.

    Mr Musk’s push for Tesla to launch more affordable electric models comes amid increasing competition from Chinese rivals, as well as rising interest rates globally.

    Despite these looming threats to the brand, the Tesla Model 3 and Model Y accounted for more than half of new EV sales in Australia throughout 2023.

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    Jordan Mulach

    Born and raised in Canberra, Jordan has worked as a full-time automotive journalist since 2021, being one of the most-published automotive news writers in Australia before joining CarExpert in 2024.

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