SAN FRANCISCO (Reuters) – Tesla (NASDAQ:) said on Tuesday it will use its existing plants to produce new and more affordable cars as early as the end of this year, making investment in new plants in Mexico and India unlikely in the near future .
The world’s largest electric vehicle maker said it plans to increase production by 50% from 2023 to its current capacity of about 3 million vehicles, before investing in new production lines.
“This update may result in smaller cost savings than previously expected, but will allow us to intelligently grow vehicle sales in a more efficient manner during a period of uncertainty,” the company said.
Investors welcomed the decision not to risk building new models at new factories, with Tesla shares jumping 12% in after-hours trading despite the company’s quarterly results missing financial targets.
“I think it’s positive that he’s not just moving forward with an expansion plan, ignoring the challenges in the market and the fact that he’s making a cheaper vehicle out of an existing product line,” said Elliott Johnson, chief investment officer of Evolve ETFs. which manages about $6 billion in assets, including investments in Tesla and other electric vehicle makers.
On April 5, Reuters exclusively reported that Tesla had abandoned plans to produce its low-cost car, known as the Model 2, which Tesla had planned to produce in Texas, Mexico and a third country. The Model 2 was expected to cost $25,000 and help establish Tesla as a mass-market automaker.
remove advertising
.
Musk responded to the Reuters report by posting on X that “Reuters is lying.” He did not provide details and did not directly address the Reuters report on Tuesday.
Instead, Tesla discussed unidentified new models that appeared to be different products.
Musk said in January that Tesla was aiming to release a lower-cost new model in the second half of 2025, adding that the model would have “revolutionary manufacturing technology” and provide the next wave of growth for Tesla.
But Lars Moravi, Tesla’s chief technology officer, said Tuesday that the new manufacturing process and production lines come with “some risks” and the automaker has made a “major shift in strategy” to use its capacity to build low-cost cars quickly and quickly. effective way.
Musk was expected to meet Indian Prime Minister Narendra Modi on Monday and announce a major investment in a car plant to produce a small, affordable model. Musk pulled out at the last minute, citing Tesla’s “very difficult commitments.”
Musk said last year that Tesla would “definitely” build its plant in Mexico, but the plant’s construction timeline would depend on the economy and interest rates, which reduce the affordability of cars. He also said Tesla would begin the initial stages of construction last year.
Tesla did not respond Tuesday to a request for comment on its plans in Mexico and India.
Smaller peer Rivian (NASDAQ:), known for its R1S SUV and R1T pickup truck, said last month it would start producing the smaller and less expensive R2 electric SUV at its existing U.S. plant to speed up deliveries in the first half of 2026. The R2 was previously planned to be built in a new $5 billion plant.
remove advertising
.