Plans to make low-priced EVs at existing facilities
BBN Mumbai
Mumbai: The US electric car maker Tesla has decided to use its existing factory facilities to make new and more affordable vehicles late this year, reports Reuters.
According to report, the new move of Tesla will delay investments in new factories in Mexico and India, or in other words they are unlikely to come up in near future
The world’s top EV maker said it plans to raise production by 50 per cent from 2023 to its current capacity of close to 3 million vehicles before investing in new manufacturing lines, adds the report.
“This update may result in achieving less cost reduction than previously expected but enables us to prudently grow our vehicle volumes in a more capex efficient manner during uncertain times,” the company said.
Investors cheered the decision not to take the risks of building new models in new factories, with Tesla shares jumping 12% in after-hour trading despite the company’s quarterly results missing financial targets.
“I think it’s a positive that he’s not just barrelling 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,” said Elliot Johnson, chief investment officer at Evolve ETFs, which manages nearly $6 billion in assets, including investments in Tesla and other EV makers.
Reuters exclusively reported on April 5 that Tesla had scrapped plans to launch its cheap vehicle, known as Model 2, which Tesla planned to build in Texas, Mexico and a third country. The Model 2 had been expected to cost $25,000 and drive Tesla’s growth into a mass-market automaker.
Musk had responded to the Reuters report with a message on X that “Reuters is lying.” He did not give details and on Tuesday he did not directly address the Reuters report.
Instead, Tesla discussed unidentified new models that appeared to be different products.
In January, Musk said Tesla aimed to deliver the cheaper new model in the second half of 2025, adding that the model will have “revolutionary manufacturing technology” and generate the next wave of growth for Tesla.
