Tesla to build next plant in Mexico

SAN FRANCISCO, CALIFORNIA - JANUARY 24: Tesla CEO Elon Musk leaves the Phillip Burton Federal Building on January 24, 2023 in San Francisco, California. Musk testified at a trial regarding a lawsuit that has investors suing Tesla and Musk over his August 2018 tweets saying he was taking Tesla private with funding that he had secured. The tweet was found to be false and cost shareholders billions of dollars when Tesla's stock price began to fluctuate wildly allegedly based on the tweet. (Photo by Justin Sullivan/Getty Images) — Justin Sullivan/Getty Images 01 Mar 23

By CNN Newsource

Published March 1, 2023 5:41 PM

Originally Published: 01 MAR 23 20:11 ETBy Chris Isidore, CNN

(CNN) -- Tesla's next vehicle assembly plant will be in Mexico near Monterrey, CEO Elon Musk announced Wednesday.

"We're super excited about it," Musk said during an investor day for the company. "We'll continue to expand production at all of our existing factories. So this is not moving output to anywhere, from anywhere. This is supplemental production."

The company currently has capacity to build about 2 million cars a year at four factories, in Fremont, California; Shanghai, China; Austin, Texas; and Berlin, Germany. It has set a goal of eventually building 20 million cars a year. The company delivered just over 1.3 million cars in 2022. The largest automaker in the world by production volume, Toyota, delivered just over 10 million cars globally in 2022.

Tesla did not comment on the cost of the new plant. The news was a confirmation of plans announced Tuesday by Mexican President Andres Manuel Lopez Obrador for Tesla to build its next factory in the country. Reuters reported that Mexican officials said the plant could cost $1 billion.

The company estimates to build the additional plants needed to reach 20 million vehicles will cost a total of $150 billion to $175 billion, including the $28 billion in investment that it has already made in its history.

"Maybe this total investment looks large," said CFO Zachary Kirkhorn. "I think its quite small relative to our ambitions."

The company also announced that earlier Wednesday it built 4 million vehicles in its history.

Shares of Tesla slipped more than 5% in after-hours trading Wednesday, although that was up a bit from a larger decline before Musk's announcement more than three hours into the presentation. There had been hope by some investors that Tesla would announce details about a next generation of vehicles. Musk declined to answer a question about the next generation vehicle.

"We will have a proper sort of product event," Musk said. "We'd be jumping the gun if we were to answer that question."

In response to another question from an analyst, Musk said he doesn't anticipate Tesla ever having more than 10 different vehicles in its product lineup. He derided the broad offerings of competing automakers as simply a "shuffling" of many similar models.

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