SAN FRANCISCO, March 1 (Reuters) – Tesla Inc ( TSLA.O ) will halve assembly costs in future generations of cars, engineers told investors on Wednesday, but Chief Executive Elon Musk did not give meet a long-awaited small and affordable electric. vehicle
Shares fell more than 5% in after-hours trading after the company’s investor day presentations from its Texas headquarters. A question and answer program continues.
In the first three hours of the webcast, Tesla executives led by Musk talked about everything from a white paper plan for the world to embrace sustainable energy to the company’s innovation in managing its operations, from manufacturing to service.
The presentation featured a number 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 head of global production, took the stage and said that Tesla’s global capacity was 2 million vehicles a year.
Musk was expected to lay out a plan to make a small, affordable electric vehicle (EV) that would broaden the appeal of his brand and fend off competition, but by the end of the presentation executives had not detailed plans for new vehicle models no new financial goals for the year.
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Musk declined to comment on a slide showing two hidden vehicles, though one executive said the next-generation platform was not a single car.
Tesla CFO Zach Kirkhorn estimated that the company would need to invest six times more than it has so far to reach its long-term goal of increasing production to 20 million vehicles annually, a 10-fold increase than the current capacity. The bill could be $175 billion, he said.
Musk kicked off the Q&A by announcing that a new Tesla factory would be built in northern Mexico. On Tuesday, Mexican officials announced that Tesla would build a factory in the northern state of Nuevo Leon. It would be the company’s first factory outside the United States, Germany and China.
Tesla shares are down about half from their November 2021 peaks, but have recovered more than 60% this year.
MASS MARKET
Capturing the mass market is critical to Tesla’s goal of 20 million vehicles in annual production by 2030.
The automaker has just four models, all of which are priced at the higher end of the market. Cybertruck pickup will arrive this year, executives said.
Musk said Tesla could need as few as 10 models to achieve annual sales of 20 million vehicles a year. That would average 2 million annual sales for each model line. By comparison, Japan’s Toyota, the world’s largest automaker by volume, sells just over 1 million Corollas a year worldwide.
Tesla already has a significant lead over its rivals in making electric vehicles at a profit. Chief engineer Lars Moravy said the company hopes to build its next-generation vehicles for half the cost of the current Model 3 or Model Y.
Moravy described a production process for future electric vehicles that he called a “boxless” model that would offer lower costs by combining subassemblies and reducing complexity and assembly time.
Tesla executive Peter Bannon gave an example of how the company uses data to cut costs. Customer data showed Tesla owners weren’t using the sunroof, he said, “so we took it out.”
High-profile Tesla investor Ross Gerber tweeted that the unveiling was a “big tease” about the next-generation vehicle. “It’s coming. They laid it all out. 50% less build cost. Would give you a $25-$30,000 EV!”
Tesla has outperformed the industry in recent years, increasing deliveries rapidly despite the pandemic and supply chain disruptions.
But Tesla cut prices in recent months to boost sales, pressured by a weak economy and growing threats from rivals in the United States and China.
Tesla will also need to improve its battery technology, which Musk has described as a “fundamental limiting factor” in the transition to sustainable energy.
In 2020, Musk unveiled a plan to develop batteries at home, which he said would make electric cars priced at $25,000 feasible by 2023, but Tesla has been struggling to ramp up production of the so-called 4680 batteries.
Executives said Wednesday that Tesla plans to start production of battery materials factories this year, with a lithium refinery and a cathode facility in Texas. They did not update their production volume of 4680 cells.
Reporting by Hyunjoo Jin in San Francisco, Joseph White in Detroit, Akash Sriram in Bangalore, Abhirup Roy in San Francisco and Kevin Krolicki in Singapore; Editing by Peter Henderson, Matthew Lewis and Himani Sarkar
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