Elon Musk has officially confirmed the development of a “next-generation low-cost” Tesla electric vehicle (EV), expressing optimism about its anticipated release in the latter half of 2025. During an earnings call held yesterday, Musk also revealed plans for a groundbreaking manufacturing system, surpassing global standards by a “significant margin.”
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According to a recent Reuters article, the upcoming vehicle is rumoured to be a compact crossover known internally as “Redwood.” Tesla has reportedly initiated communication with suppliers, projecting a weekly production target of 10,000 units. Musk, in previous statements, outlined the company’s focus on two new EV models with a combined potential sales volume of up to 5 million units annually.
“Our current timetable indicates the commencement of production towards the end of 2025, likely in the second half,” Musk shared during the call. The initial assembly of the vehicle will take place at Tesla’s Gigafactory in Austin, Texas, with plans to expand production to other global locations in subsequent phases. Musk hinted at an intensive manufacturing effort, stating, “We’ll be sleeping on the line practically.”
Highlighting the unique aspect of Tesla’s new manufacturing technique, Musk emphasized its complexity, making it “very hard to copy.” He explained, “You have to copy the machine that makes the machine that makes the machine… manufacturing inception.” Musk hinted that the production pace might start gradually before experiencing a substantial increase.
Despite these optimistic announcements, Musk cautioned shareholders about an anticipated “notably lower” sales growth in 2024 due to the decline in Model 3 and Model Y sales. The company anticipates a resurgence with the introduction of the next-generation vehicles in 2025.
Musk also touched upon Tesla’s progress in Full Self-Driving (FSD) technology, urging other car companies to seek FSD licenses, with promises of apparent reasons becoming clear “probably this year.” However, it’s worth noting that Tesla’s FSD capability remains at Level 2, while rival Mercedes-Benz recently achieved Level 3 approval in the US.
Acknowledging his penchant for optimism regarding timelines, Musk urged caution with the production forecast, admitting, “should be taken with a grain of salt.” While Musk accurately predicted the arrival of the Model 3 in 2017, he acknowledged the discrepancy in the forecasted $35,000 price, as the model debuted just under $50,000. This history suggests that while the next-gen model may adhere to its timeline, price adjustments may take some time to materialize.
