SUMMARY
The EV maker stated its intention to increase production by 50% from 2023
On April 5, Tesla abandoned its plans to introduce its affordable vehicle, referred to as the Model 2, which it intended to manufacture in Texas, Mexico
The Model 2 was anticipated to be priced at $25,000 and play a pivotal role in Tesla’s expansion into the mass-market automotive segment
Tesla’s plan for entry into India anytime soon remains in limbo. The Elon Musk-led electric vehicle company is planning to use its existing factories to build new and more affordable vehicles as early as the end of this year, rather than investing in new factories in India and Mexico in the near future.
As per Reuter’s report, the company aims to increase production by 50% from 2023, aiming to reach its current capacity of nearly 3 Mn vehicles before considering investments in new manufacturing lines.
“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 told Reuters.
Investors welcomed the decision to refrain from the risks associated with constructing new models in new factories, leading to a 12% surge in Tesla shares during after-hours trading, despite the company’s quarterly results falling short of financial targets.
“I think it’s a positive that he’s not just barreling 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,” Elliot Johnson, chief investment officer at Evolve ETFs said in the report.
On April 5, Tesla abandoned its plans to introduce its affordable vehicle, referred to as the Model 2, which it intended to manufacture in Texas, Mexico, and a third undisclosed location. The Model 2 was anticipated to be priced at $25,000 and play a pivotal role in Tesla’s expansion into the mass-market automotive segment.
Musk responded to the Reuters report by dismissing it as false, stating “Reuters is lying” on X, although he did not provide specific details. Subsequently, on Tuesday, he did not directly acknowledge the Reuters report. Instead, Tesla focused on discussing new models, which seemed to be distinct products but were not identified.
Meanwhile, Musk postponed his trip to India where he was scheduled to meet Prime Minister Narendra Modi and announce plans to enter the South Asian market.
Musk was scheduled to visit India on April 21 and 22.
In addition, Tesla is reportedly in discussions with Reliance Industries regarding a potential joint venture aimed at establishing a manufacturing facility in India. Moreover, the company has initiated the production of right-hand drive electric vehicles at its manufacturing plant in Germany, emphasising its commitment to entering the Indian market.
Musk emphasised the importance of electric cars for India, stating that it’s a natural evolution for his company to enter the Indian EV market.
