Tesla flags lower costs, but Musk does not unveil cheaper car
Tesla Inc will cut the assembly costs of its future generations of cars in half, engineers have told investors, but CEO Elon Musk has not unveiled a highly anticipated small, affordable electric car.
Shares fell more than 5 percent in after-hours trading after presentations on the company’s Investor Day from its Texas headquarters. A question-and-answer program continues.
In the first nearly three hours of the webcast on Wednesday, Musk-led Tesla executives discussed everything from a white paper plan for the world to embrace renewable energy to the company’s innovation in managing its operations from manufacturing to service.
The presentation featured a series of engineers, a nod to Tesla’s attempt to show the depth of its executive bench beyond Musk, the face of the company. Tom Zhu, the new global production chief, took the stage and said Tesla’s global capacity was 2 million vehicles per year.
Musk was expected to lay out a plan to create a small, affordable electric car (EV) that would boost his brand’s appeal and fend off competition, but by the end of the presentation, executives had no plans yet for new vehicle models or new financial targets for the year.
Musk declined to comment on a slide showing two hidden vehicles, though an executive said the next-generation platform was not a single car.
Tesla’s chief financial officer, Zach Kirkhorn, estimated that the company would need to invest six times more than it has done to date to meet its long-term goal of increasing production to 20 million vehicles per year, a tenfold increase from current levels. capacity. The bill could be $175 billion, he said.
Musk began the question-and-answer portion by announcing that a new Tesla factory would be built in northern Mexico. On Tuesday, Mexican officials announced that Tesla will build a factory in the northern state of Nuevo Leon. It would be the company’s first factory outside the US, China and Germany.
Capturing the mass market is critical to Tesla’s goal of producing 20 million vehicles per year by 2030.
The automaker has just four models, all priced toward the higher end of the market. The Cybertruck pickup is coming this year, executives said.
Musk said Tesla could need just 10 models to reach annual sales of 20 million vehicles. That would be an average of 2 million sales per year for each model line. By comparison, Japan’s Toyota, the world’s largest automaker by volume, only sells more than 1 million Corollas a year worldwide.
Tesla already has a significant lead over its rivals in producing electric cars at a profit. Chief engineer Lars Moravy said the company expects to build its next-generation vehicles for half the cost of the current Model 3 or Model Y.
Moravy described a manufacturing process for future EVs that he called an “unboxed” model that would lower costs by snapping sub-assemblies together and reducing both complexity and assembly time.
Tesla CEO Peter Bannon gave an example of how the company uses data to cut costs. Customer data showed Tesla owners were not using the sunroof, he said, “so we removed it”.
High-profile Tesla investor Ross Gerber tweeted that Wednesday’s presentation amounted to a “huge tease” about the next-generation vehicle. “It’s coming. They explained it all. 50 percent less cost to build. Would get you a $25-$30,000 EV!
Tesla has outperformed the industry in recent years, quickly ramping up deliveries despite the pandemic and supply chain disruptions.
But Tesla cut prices in recent months to boost sales, which have been squeezed by a weak economy and growing threats from rivals in the US and China.
Tesla will also need to improve its battery technology, which Musk has called the “fundamental limiting factor” for the transition to renewable energy.
In 2020, Musk unveiled a plan to develop batteries in-house, which he said would make self-driving electric cars priced at $25,000 feasible by 2023, but Tesla has struggled to scale production of the so-called 4680 batteries .
Executives said Wednesday that Tesla plans to begin manufacturing battery materials plants this year, with a lithium refinery and cathode facility in Texas. They did not provide an update on the production volume of 4680 cells.