Is Tesla Building A New Compact Crossover? Here's What We Know About Codename Redwood

Tesla seems to be moving closer to its dream of an affordable electric car. It could start production of this highly-anticipated entry-level ride as early as next year. According to a Reuters report that cites unnamed internal sources, Tesla is reportedly eyeing a 2025 production window for its cheapest-ever electric car.

Now, the carmaker's chief, Elon Musk, has been teasing one such car for a while now, but in true Tesla fashion, the dates have kept shifting further into the future. But it seems that following Cybertruck's market release, Tesla is finally ready to commit with the apt logistics and manufacturing capabilities to go with it.

Manufacturing, especially, is crucial because mass production will be the easiest way to extract a meaningful profit from low-margin vehicles. Tesla is rumored to hawk the car somewhere around $25,000. But that could change, and in a dramatic fashion, if the Cybertruck's steep final price versus its original quote is anything to go by.

According to Reuters, the upcoming Tesla car will be a compact crossover. Notably, the company has set a production target of 10,000 units per week for its value-centric electric car. It is also said to have reached out to supply chain partners with quote requests, which is a clear sign that Tesla wants to kickstart production sooner rather than later.

The car is currently in development, carrying the name Redwood. If that name sounds familiar, it's because Redwood Materials is a battery tech company started by Tesla co-founder, former technology chief, and board member JB Straubel. Back in 2015, when Straubel was still at Tesla, he pointed out that the Model 3's platform would eventually spawn a crossover electric car.

As far as Redwood goes, it focuses on recovering precious metals from used batteries and also making essential components such as cathodes. It won't be out of character to think that Redwood could snag some of the cathode orders from Tesla for the ambitious project. The company is contracted by Tesla to recycle EV batteries. 

But naming aside, Project Redwood will reportedly be based on a new platform that will also serve as the foundation for Tesla's robotaxi project. The upcoming electric crossover is said to tap the next-gen unboxed manufacturing process Tesla has employed at its Texas and Shanghai Giga units. But the company could eventually turn to its Mexico — and rumored Indian — production units to lower costs and multiply production.

Tesla is said to be aiming for 4 million shipped units per year for its mass-market electric car. Unfortunately, we don't know much about Tesla's $25,000 car in terms of looks or specs, at least officially. "Both the design of the products and manufacturing techniques are head and shoulders above anything else that is present in the industry," Musk recently told investors. 

The car would likely come equipped with a 53kWh LFP battery pack, which should be good enough to deliver a range in the ballpark of 230-250 miles. Tesla shared this information as part of its Master Plan Part 3 vision last year. It would reportedly come in at half the production cost of the Model 3 and Model Y vehicles.

A rumor that emerged early in 2023 claimed that the car might look like a shrunk version of the Model Y. Then came the autobiography of Musk, written by Walter Isaacson, which shared some juicy bits of information about the upcoming car project. Inspired by the descriptions in Isaacson's book, the folks over at Motor 1 created concept renders of the yet-to-be-announced car. They envision a design that essentially gives a Cybertruck treatment to the Toyota Prius with clean lines and a smooth aerodynamic profile without any overt chassis styling.