Tesla, the electric vehicle (EV) pioneer, is gearing up to introduce a new mass market EV codenamed “Redwood” in mid-2025, Reuters reported. The new model is expected to be a compact crossover, one of the most popular segments in the global car market.

Tesla’s CEO Elon Musk has been teasing fans and investors with the prospect of affordable EVs and self-driving robotaxis for years. He hopes to achieve these goals by developing next-generation, cheaper electric car platforms that can support various models, including an entry-level $25,000 car.

Tesla faces fierce competition from both traditional automakers and new entrants in the EV market, especially in China, the world’s largest EV market. One of Tesla’s main rivals is BYD, a Chinese company backed by Warren Buffett. BYD surpassed Tesla as the world’s top EV maker in the final quarter of 2023, selling over 1.2 million EVs, compared to Tesla’s 935,950 units.

Tesla’s current cheapest offering, the Model 3 sedan, has a starting price of $38,990 in the United States. Musk had originally promised to build a $25,000 car in 2020, but later scrapped the plan and then revived it. He also expressed concern about the impact of high interest rates on consumer demand for big-ticket items like cars.

To prepare for the launch of the “Redwood” model, Tesla sent “requests for quotes,” or invitation for bids, to suppliers last year, and forecast weekly production volume of 10,000 vehicles, two of the sources said. Production would begin in June 2025.

The “Redwood” model could be a game-changer for Tesla, as it could appeal to a wider range of consumers who are looking for affordable and eco-friendly mobility solutions. According to a Consumer Reports survey, 71% of American drivers have at least some interest in getting an EV, and 31% said they would consider getting an EV for their next lease or purchase.

However, the survey also revealed some barriers and challenges that prevent consumers from adopting EVs, such as the lack of public charging stations, the high upfront cost, and the limited availability of models.

Tesla has been working to address these issues by expanding its Supercharger network, reducing its battery costs, and diversifying its product portfolio. The “Redwood” model could be a key part of Tesla’s strategy to maintain its leadership position in the global EV market and to fulfill its mission to accelerate the transition to sustainable energy.