Tesla claims that by adopting cutting-edge production techniques and smaller factories, it will reduce the cost of its upcoming vehicle generation by half.
Elon Musk, the company’s CEO, and other officials delivered Tesla’s third master plan to investors at a 3 1/2-hour investor day presentation on Wednesday at its headquarters in Austin, Texas.
The adjustments may reduce the price of a new generation of cars to almost $25,000. The next-generation vehicles were eagerly anticipated by investors, but Musk insisted that they wouldn’t be exhibited until a formal product launch.
“We’d be jumping the gun if we answer your question,” about the new vehicles, he told an analyst.
Following the presentation, which ended shortly after 8 p.m. Eastern Time, shares of Tesla dropped by about 6%.
Tesla intends to establish a new facility in Mexico close to Monterrey, according to Musk. Executives from the company stated that none of the factories where Tesla hopes to increase production will be affected. The next generation of automobiles, they claimed, would be produced in the Mexico plant in addition to other plants.
Although it wasn’t obvious from the presentation, it’s likely that the future generation of automobiles will be smaller than the ones on the road today in order to reduce costs. To reduce labor costs and maintain profit margins, many automakers produce smaller cars in Mexico.
Lack of information on the new vehicles and the company’s history of having its share price climb ahead of major events, only to collapse when the news was actually released, according to CFRA Analyst Garrett Nelson, were both cited as reasons for the decline in Tesla’s shares.
Even while some investors may have been frustrated by the company’s long-term strategy, he believes Tesla’s ambition justifies its premium stock valuation in comparison to other automakers.
What they described actually demonstrated why it merits to trade at a significant premium to the rest of the sector, he added.
Tesla’s design leader, Franz Von Holzhausen, stated that the business must further cut costs in order to meet its ambitious goal of producing 20 million electric vehicles annually by 2030. This year, Tesla plans to produce 1.8 million vehicles.
He said that the business would create the autos in smaller modular components before assembling them. The system takes up less room. Officials said that as a result, their upcoming electric powertrain facility will be 65% less expensive and 50% smaller than the one Tesla recently constructed in Austin.
Tom Zhu, who oversees Tesla production, stated, “It also means we can develop more factories at the same time.
Zachary Kirkhorn, the company’s chief financial officer, said that costs were slashed in half between the first-generation Models S and X and the second-generation Models 3 and Y. For the upcoming generation, it intends to repeat that strategy while also making improvements to the vehicles, he said.
Also, the business promised to reduce the number of cables, transistors, and pricey rare-Earth metals used in battery construction.
The quantity of clients who can access our products rises as we make them more affordable, according to Kirkhorn.
Tesla automobiles are in high demand, but many people who want one right now can’t afford one, according to Musk.
The individuals involved in vehicle design and manufacture are all in the same room, according to executives, making Tesla different from other automakers. While some of its parts and software are designed and manufactured by the corporation, others rely on layers of parts suppliers.
The business also said that beginning of Wednesday, owners of other electric vehicles are now welcome to use 10 of its supercharger stations. Additionally, it has ambitions to make use of wind energy in Texas to provide an unlimited home charging package for $30 per month.
The new master plan, according to Kirkhorn, incorporates product advancements, rapid volume development, and technological advancement.
Musk said at the start of the discussion that there is a clear road to sustainable energy on Earth, but it will require shifting practically everything from electricity produced by fossil fuels to renewable energy sources. Without harming natural ecosystems or practicing extreme austerity, the Earth could sustain more people than it currently does, he claimed.
