Tesla has told suppliers it wants to start production of a new mass market electric vehicle (EV) codenamed "Redwood" in mid-2025, according to four people familiar with the matter, with two of them describing the model as a compact crossover, Reuters reported.

Those models, including an entry-level $25,000 car, would allow it to compete with cheaper gasoline-powered cars and a growing number of inexpensive EVs.

Tesla CEO Elon Musk had first promised to build a $25,000 car in 2020, a plan he later shelved and then revived. Tesla's cheapest offering, the Model 3 sedan, currently has a starting price of $38,990 in the United States.