Sub-$30K Tesla Compact Crossover Reportedly Arriving in 2025

2019 tesla model 3
Report: Sub-$30K Tesla Crossover Arriving in 2025Michael Simari - Car and Driver
  • Tesla is developing an entry-level compact crossover codenamed Redwood, according to a report from Reuters.

  • The Redwood will enter production in June of 2025, the news agency's sources said, with an expected weekly production volume of 10,000 units.

  • Tesla CEO Elon Musk first mentioned an affordable Tesla back in 2020, originally suggesting it would start at $25,000 and arrive within three years.

Tesla finally began assembling the angular Cybertruck late last fall after years of delays, but the Texas-based company is reportedly already preparing a new vehicle. According to Reuters, Tesla has alerted suppliers that it plans on starting production for a new car in mid-2025, currently codenamed "Redwood."

Reuters said that it spoke to four people with knowledge of Tesla's plans. Two of the anonymous sources said the Redwood is a compact crossover. There has been talk for a few years that Tesla is working on an entry-level car, with Musk first mentioning such a vehicle at a 2020 event. He suggested a $25,000 price point, fully autonomous driving capability, and an arrival time within three years.

Musk backtracked on the car's development in 2022, before bringing it back into the spotlight in December 2023. According to Reuters, Tesla sent suppliers invitations to bid for the Redwood last year, and predicted a weekly production volume of 10,000 units. Production is scheduled to begin in June 2025, the sources said. "They have been overly optimistic on most of their new product launches. Volume output is more likely to begin in 2026," Reuters quoted one source as saying.

While the Redwood is presumably the affordable vehicle Musk has touted, we imagine the price might start closer to $30,000 when it goes on sale, given that the Model Y now starts in the mid-$40K range. According to two of Reuters'sources, Tesla has torn down a Honda Civic "to study how to make cheaper cars." In 2023, Musk said the new model would be built at Tesla's factory in Austin, Texas.

The same architecture set to underpin the Redwood is also supposed to be used for a dedicated robotaxi, something Musk has long promised but not yet delivered. Musk said in 2022 that the autonomous taxi would reach production in 2024, but we wouldn't expect the robotaxi to arrive until after Redwood production has commenced.

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