Tesla announced the construction of a new gigafactory in Mexico as part of its ongoing plans to increase its production output.
Tesla held an investor day where its management shared current developments and future plans for development and expansion in the company.
Tesla CEO Elon Musk announced that Tesla would be building another gigafactory in Mexico as part of its plan to aggressively ramp up its vehicle production.
Musk said that the company plans to increase production within all of its gigafactories, including Nevada, Texas, New York, Berlin, and Shanghai.
He said that the factory in Mexico would generate output supplementary to the output of all existing factories, emphasising the point that it would not replace any current production facility.
Tesla has been ruthless in its execution of building gigafactories, completing its latest gigafactory in Texas in under two years.
The company is on its way to producing 2 million vehicles per year and would exceed this by adding its Mexico factory.
Tesla reported 1.37 million vehicles produced for its 2022 year-end and 1.31 million vehicles sold.
Musk’s latest master plan for Tesla fell flat as the electric-car maker shared scant details about next-generation models that will underpin its next phase of growth.
The roughly four-hour presentation was long on calculations of what the sustainable energy transition will require, along with boasts about manufacturing and engineering efficiencies.
But Musk and the executives who joined him on stage wrapped Tesla’s investor day without giving a glimpse of cheaper EVs that may still be years away.
“I’d love to really show you what I mean and unveil the next-gen car, but you’re going to have to trust me on that until a later date,” Franz von Holzhausen, Tesla’s design chief, said at the company’s headquarters in Austin, Texas.
“We’ll always be delivering exciting, compelling and desirable vehicles, as we always have.”
Tesla shares fell 7.7% — the biggest drop since January — to $187.08 as of 9:41 a.m. Thursday in New York. Anticipation of the event contributed to a surge in the stock that added more than $300 billion of market value in two months.
Musk, 51, confirmed Tesla will build a new plant in Monterrey, Mexico, in what he said was probably the most significant announcement of the day.
The chief executive officer said Tesla will make its next-gen vehicle there, and that the company will hold a grand opening and groundbreaking at an unspecified date.
When asked when the carmaker will show a prototype and if he could share details about the size, content and performance of the vehicle, Musk responded that Tesla also will hold a “proper sort of product event” at some point, but didn’t say when.
“We’re gonna go as fast as we can,” said Lars Moravy, Tesla’s vice president of vehicle engineering. “We expect that to be a huge-volume product.”
Key Takeaways From Tesla’s Investor Day
- Tesla recently broke ground on a lithium refining plant in Corpus Christi, Texas.
- Musk reiterated that artificial intelligence stressed him out and called for the creation of a regulatory authority that would ensure the “quite dangerous technology” is operating in the public interest.
- Tesla just built its four millionth vehicle. After taking 12 years to make its first million, the company manufactured each incremental million units in 18 months, 11 months and seven months.
- The carmaker’s next drive unit will use a permanent magnet motor and no rare earths, according to Colin Campbell, vice president of powertrain engineering. The comments sent miner shares tumbling.
Musk opened the event by laying out what Tesla believes will be required to displace fossil fuels, from powering the grid with wind and solar to utilizing heat pumps, which he said Tesla might make for homes at some point.
Tesla also is planning to offer unlimited overnight home charging in Texas for $30 a month.
“Earth will move to a sustainable energy economy,” Musk said. “And it will happen in your lifetime.”
Tesla showcased the bench of executives behind its CEO in response to criticism of Musk’s $44 billion acquisition of Twitter and pressure to share more about succession planning.
Toward the end of the festivities, he took a seat surrounded by 16 other executives, some of whom haven’t appeared at past company events.
Investors heard from Tom Zhu, who’s on the ascent after overseeing Tesla’s factory in Shanghai becoming its most productive in the world. Rebecca Tinucci, the head of global charging infrastructure, presented on the “Magic Dock” feature enabling drivers of other EVs to use Tesla’s stations.
There was a heavy emphasis on reducing expenses, with Tesla sharing plans to shrink the footprint of future manufacturing sites by more than 40%. Chief Financial Officer Zach Kirkhorn reiterated that the company is aiming to halve production costs for its next-gen vehicles.
“The emphasis on cost-cutting throughout the company was unsurprising yet encouraging,” said Jessica Caldwell, executive director of insights for auto-market researcher Edmunds. “But Musk and company failed to put the cherry on top — an actual look at a lower-priced Tesla, if only just conceptually.”
Musk published his first master plan for Tesla in 2006, laying out his strategy to build an electric sports car, followed by a series of gradually more affordable models. The company executed on that vision with the Roadster, the Model S and X, and the Model 3 and Y.
Ten years later, Musk released “Master Plan, Part Deux” as Tesla was acquiring SolarCity. He teased a solar roof product that’s been a disappointment, robotaxis that remain elusive and an expanded product line for all major segments. The company recently handed over Semi trucks to its first customer and expects to begin producing the Cybertruck this year.
Reporting with Bloomberg.