Elon Musk confirms a new low-cost Tesla model is coming in 2025

Elon Musk has confirmed that a “next-generation low-cost” Tesla EV is in the works and is “optimistic” that it’ll arrive in the second half of 2025, he said in an earnings call yesterday. He also promised “a revolutionary manufacturing system” for the vehicle that’s far more advanced than any others in the world by a “significant margin.”

An article yesterday from Reuters indicated that the new vehicle would be a small crossover codenamed “Redwood.” Tesla reportedly sent requests to suppliers for quotes, predicting a weekly production volume of 10,000 vehicles. Musk previously stated that the automaker is working on two new EV models that could sell up to 5 million per year, combined. 

“Our current schedule shows that we will start production towards the end of 2025, sometime in the second half,” he said on the call. The vehicle will be built in Tesla’s Austin, Texas Gigafactory to start with and other locations around the world later. Musk hinted that there would be a strong push to ramp up assembly: “We’ll be sleeping on the line practically,” he said.

We achieved a record production and deliveries of over 1.8 million vehicles, in line with our official guidance. And in Q4, we’re producing vehicles at an annualized run rate of almost 2 million cars a year. And people are often surprised that the the highest-output… car factory in North America is in the San Francisco Bay area.

Musk stated that the company’s new manufacturing technique will be “very hard to copy” because “you have to copy the machine that makes the machine that makes the machine… manufacturing inception.” He added that as before, the new line could start slowly before production significantly ramps up. 

He warned shareholders of “notably lower” sales growth for 2024, however, as the wave of Model 3 and Model Y sales subsides. The company predicted a second sales wave that will start with the next-generation vehicles coming in 2025. 

Musk also touched on Tesla’s FSD (full self-driving) progress, noting other “car companies should be asking for FSD licenses” and adding that the reasons “will become obvious probably this year.” Musk has made similar rosy predictions for FSD before, though, and it still remains at Level 2 capability. Meanwhile, rival Mercedes-Benz recently gained Level 3 approval in the US. 

As Musk admitted himself, the production forecast “should be taken with a grain of salt as I’m often optimist… regarding time.” He was accurate when he said the Model 3 would arrive in 2017, but was very wrong about the $35,000 price (it debuted at just under $50K and Tesla only briefly sold a $35K model). If that history holds, the next-gen model may arrive on time, but it may take some time for the price to come down.

This article originally appeared on Engadget at https://www.engadget.com/elon-musk-confirms-a-new-low-cost-tesla-model-is-coming-in-2025-103517158.html?src=rss