Tesla not coming to India anytime soon? Elon Musk's firm aims to use existing factories for low-cost cars
Tesla, under the leadership of Elon Musk, on Tuesday revealed plans to utilize its existing factories for the production of new and more affordable vehicles, with potential production beginning as soon as the end of this year.
FollowTesla, under the leadership of Elon Musk, on Tuesday revealed plans to utilize its existing factories for the production of new and more affordable vehicles, with potential production beginning as soon as the end of this year. This strategic decision, outlined in a Reuters report, indicates that investments in new factories in Mexico and India are unlikely in the immediate future.
As the world's foremost electric vehicle (EV) manufacturer, Tesla is aiming to boost production by 50% from 2023, reaching a capacity of nearly 3 million vehicles, before considering further investments in new manufacturing facilities.
Elliot Johnson, Chief Investment Officer at Evolve ETFs, overseeing assets of nearly $6 billion, including investments in Tesla and other EV manufacturers, provided insight into the development.
"I think it's a positive that he's not just barreling ahead with an expansion plan, ignoring the challenges in the market and the fact that he's doing a cheaper vehicle from the existing product line," Johnson said.
On Tuesday, Tesla discussed undisclosed new models that appeared distinct from the previously anticipated Model 2, slated to cost $25,000 and propel Tesla into the mass-market automotive realm.
Also read:Â Elon Musk postpones trip to India due to 'very heavy' Tesla obligations
In January, Musk unveiled Tesla's objective to introduce the more affordable model by the latter half of 2025. He underscored that this vehicle would incorporate "revolutionary manufacturing technology," positioning it as the linchpin for Tesla's forthcoming growth phase.
Lars Moravy, Tesla's engineering head, acknowledged that embracing new manufacturing processes and production lines entails "some risks." Consequently, the automaker opted for a "major shift," redirecting its resources to expedite the production of low-cost vehicles utilizing existing facilities.
Musk's meeting with Indian Prime Minister Narendra Modi, scheduled for Monday to announce substantial investments in an auto factory geared towards manufacturing a small, affordable model, was abruptly canceled. Musk cited "very heavy Tesla obligations" and expressed intentions to reschedule the visit later in the year.
Last year, Musk affirmed Tesla's intentions to "definitely" establish a factory in Mexico, contingent upon economic conditions and interest rates affecting vehicle affordability. He also outlined plans to commence initial construction phases in the same year.
On Tuesday, Tesla remained mum on inquiries regarding its strategies in Mexico and India.
Analysts highlighted the formidable task facing Tesla in expanding its capacity while bracing for a potential deceleration in sales following years of double-digit growth rates. Tesla reiterated on Tuesday that its vehicle volume growth rate might significantly decrease from 2023 levels. However, Musk noted during a conference call that sales would still outpace those of the previous year.
