Beautiful Virgin Islands

Friday, Jun 09, 2023

Tesla’s growth ambition comes with a $175 billion price tag

Tesla’s growth ambition comes with a $175 billion price tag

CEO Elon Musk sees infinite demand for Teslas, provides little insight into next-generation vehicle

Elon Musk’s Tesla Inc. spent around $28 billion to cement itself as the world’s most valuable car company. It is now preparing to invest roughly five times that as it strives to meet the next objective: Becoming the world’s largest car maker by volume.

Chief Financial Officer Zach Kirkhorn said publicly for the first time on Wednesday that Tesla could need to spend nearly $150 billion more to achieve its long-term goals, which includes selling 20 million vehicles a year. Today’s largest auto maker sells roughly half that annually, while Tesla delivered around 1.3 million vehicles to customers globally last year.

Tesla leadership, in their presentation to investors gathered at the company’s Austin-area factory, spoke to both the scale of the company’s ambitions and how they had overcome hurdles, including reducing manufacturing costs. What stood out, as much as anything, was what they didn’t talk about in detail: a new vehicle.

A man wearing a face mask following the coronavirus disease (1COVID1-19) outbreak walks by Tesla Model 3 sedans and Tesla Model X sport utility vehicle at a new Tesla showroom in Shanghai, China May 8, 2020. 


Tesla hinted at coming models, displaying a slide with two vehicles cloaked in sheets, without sharing specifics. Wall Street had been clamoring for details on when Tesla might introduce a new, less expensive car that would expand its reach.

Wells Fargo analysts called it disappointing that "there was no reveal, timeline, or even basic product description of the next gen model."

The company currently offers four-passenger vehicles, with a fifth—the Cybertruck pickup—slated to hit the market later this year. The least expensive of those offerings is priced at more than $40,000 in the U.S.

Tesla co-founder and CEO Elon Musk stands in front of the newly unveiled all-electric battery-powered Tesla's Cybertruck at Tesla Design Center in Hawthorne, California on November 21, 2019.


It would be jumping the gun, Mr. Musk said, to discuss a coming vehicle, saying the company would have a separate product event. However, he and others underscored the importance of affordability.

Any new, more affordable model is unlikely to contribute meaningfully to Tesla’s sales until 2025 at the earliest, Bernstein Research analyst Toni Sacconaghi Jr. said in a note to investors. In the meantime, he said, Tesla will need to lower prices to hit its growth targets.

Tesla shares slumped more than 6% in Thursday trading.

Tesla Gigafactory Texas on Jan. 17


Mr. Musk, the chief executive, confirmed plans to build a new factory in Mexico while expanding the company’s existing plants. Tesla currently makes vehicles in the U.S., China and Germany. Mr. Musk has said the company is likely to need roughly a dozen factories to meet its long-term sales goal.

California Gov. Gavin Newsom and Tesla CEO Elon Musk announced the location of the company’s new global engineering headquarters. The facility will be in the former computer-maker Hewlett Packard building in Palo Alto. Photo: Tesla

Tesla will build its next-generation vehicle in Mexico and elsewhere, the company indicated.

Mr. Kirkhorn, the CFO, said his investment forecast of up to $175 billion, including around $28 billion already spent, was intended to illustrate the feasibility of Tesla’s goals.

German Chancellor Olaf Scholz, left, talks to Elon Musk, Tesla CEO, at the opening of the Tesla factory Berlin Brandenburg in Gruenheide, Germany, Tuesday, March 22, 2022. The first European factory in Gruenheide, designed for 500,000 vehicles per ye



"We may choose to vertically integrate more into things. We may find efficiencies elsewhere," he said.

Meanwhile, Tesla is getting into the business of making the materials needed to produce the battery cells that power its electric vehicles. It broke ground on a lithium refinery near Corpus Christi, Texas, and is building a battery materials facility in the Austin area, said Drew Baglino, the company’s senior vice president of powertrain and energy engineering.

"We are also trying to accelerate the pace of the industry by trying some new things that are a little bit more scalable and de-risking certain innovations that improve productivity," Mr. Baglino said.


Tesla is expanding from a position of relative financial strength. The company has weathered periods of extreme financial strain, narrowly avoiding bankruptcy in 2008 and again roughly a decade later as it struggled to ramp up production of the Model 3 sedan, Mr. Musk has said. Now, Tesla is sitting on a war chest of around $22 billion in cash and short-term investments.

The company, which has reported 14 profitable quarters in a row, slashed vehicle prices earlier this year—some by nearly 20% in the U.S.—amid concerns about sagging demand. It has since nudged some prices back up. Tesla found that "even small changes in the price have a big effect on demand, very big," Mr. Musk said.

He again dismissed the notion that Tesla could struggle to find buyers. "Demand for our vehicles, in terms of desire to own them, may as well be infinite," he said.

Unleashing that demand will require cost reductions, though, Tesla powertrain engineering leader Colin Campbell said. "If we want to make EVs more accessible to people, they have to be cheaper," he said. "We can make lower cost products that are still efficient and compelling and we can make them at scale."

Shanghai, China - August 1, 2020: Exterior view of automobile plant Tesla Gigafactory 3 located in Pudong District, Shanghai, China.


Scaling up manufacturing hasn’t always been easy for Tesla. The company faced "production hell" in the early days of making the Model 3. At one point last year, Mr. Musk called the company’s new factories in Germany and Texas "gigantic money furnaces." It has taken Tesla two decades to produce four million vehicles.

On Wednesday, Mr. Musk reflected on the challenge ahead.

"The hard part is building the cars and the entire supply chain that goes with the cars. This is a logistics challenge of extraordinary difficulty," he said.

AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

Beautiful Virgin Islands
Close
0:00
0:00
The Fed fixing the economy
I have a dream, MLK inspiring speech
Corporations standing up for “LGDP-LGT-LBG-LGBTQ2+ kids” during ‘Pride Month’ be like:
Aretha Franklin, Marvis Staples - Oh Happy Day
A Major Ukrainian Hydroelectric Dam BLOWN UP
BVI Freedom Song
US and European Intelligence Agencies Uncover Evidence of Ukrainian Role in Terror Attack on Nord Stream Pipeline
Billy Preston - You Can't Beat God Giving (Live)
The driver has been described by authorities as a 21-year-old woman from Tallahassee
VIRGIN ISLANDS REGGAE CARIBBEAN RIDDIMZ
Joe Biden falls at the Air Force Graduation
Oh Happy Day Edwin Hawkins - Anthony Brown w FBCG Combined Choir
America's Got Talent…
'Stand by Me' performed by Karen Gibson and The Kingdom Choir
Nvidia Joins Tech Giants as First Chipmaker to Reach $1 Trillion Valuation
National Anthem of the British Virgin Islands - Oh, Beautiful Virgin
Drone Attack on Moscow's Wealthiest Neighborhoods Suspected to be Launched by Ukraine
Hello Dolly
AI ‘extinction’ should be same priority as nuclear war – experts
for KING & COUNTRY - Amen (Reborn) [feat. Lecrae & The WRLDFMS Tony Wi
Prominent Hacker Forum RaidForums Suffers Substantial Data Breach
Bob Marley - Get Up Stand Up
Nvidia CEO Huang says firms, individuals without AI expertise will be left behind
Yes He Can
WPP Revolutionizes Advertising with NVIDIA's AI Powerhouse
What A Friend We Have In Jesus
Two US Employees Fired For Chasing Robbers Out Of Store As They Broke ''Company Policy''
Unforgettable
If you donated to BLM, you got played
Touch The Hem Of His Garment
Pfizer, the EU, and disappearing ink - Smoke, Mirrors, and the Billion-Dose Pfizer Vaccine Deal: EU's 'Open Secret
The Lord's Prayer
Actor Tom Hanks told Harvard University graduates to be superheroes in their defense of truth and American ideals, and to resist those who twist the truth for their own gain
THE GOD MOVEMENT...BEAUTIFUL BVI
The Sussexes' Royal Rebound: Could Harry and Meghan Markle Return to the UK?
Siyahamba
A provocative study suggests: Left-Wing Extremism and its Unsettling Connection to Psychopathy and Narcissism
Ray Charles And The Voices Of Jubilaton, Oh, Happy Day
France Arrests 10 on Suspicion of Failing to Respond in Time to Migrant Drowning
Ramblin' Rose
Neuralink Receives FDA Approval for First-in-Human Clinical Study
Protoje - Who Knows ft. Chronixx
Is Saudi Arabia the holiest place in the world? Ancient Hebrew Inscriptions from "The Mount Sinai Stand" Discovered in Saudi Arabia
Pressure - Virgin Islands Nice
Ukrainian Intelligence Official Admits to Assassination Attempts on Putin
Phil Wickham - House Of The Lord
WATCH THIS: democracy in Russia is so bad!
My God Is Real (Yes, God Is Real)
Ed Davey: It is possible for a woman to have a penis
The Lion King Circle of Life by LEBO M. — LIVE at the HAVASI Symphonic
Bernard Arnault Loses $11.2 Billion in One Day as Investors Fear Slowdown in US Growth Will Reduce Demand for Luxury Products
Louis Armstrong - When The Saints Go Marching In
Russian’s Wagner Group leader: “I am not a chef, I am a butcher. Russia is in danger of a revolution like in 1917.”
Kanye West Sunday Service - hallelujah, salvation, and glory
TikTok Sues Montana Over Law Banning the App
Jonathan Nelson - I Believe (Island Medley
Ron DeSantis Jumps Into 2024 Presidential Race, Setting Up Showdown With Trump
From The Virgin Islands Sqad Up
Steve Jobs introducing Apple's iPhone, exactly 16 years ago.
Common, John Legend - Glory
Banking Behemoth vs Ex-Boss: The PMorgan-Epstein Entanglement
Anthony Evans vs. Jesse Campbell - If I Ain't Got You
China overtakes Japan as world's top car exporter
I have a dream, MLK inspiring speech
Last Walmart in North Portland Closing Down
Aretha Franklin, Marvis Staples - Oh Happy Day
Banking Behemoth vs Ex-Boss: The PMorgan-Epstein Entanglement
BVI Freedom Song
Florida's DeSantis seeks to disqualify judge in Disney case
Billy Preston - You Can't Beat God Giving (Live)
Talks between US House Republicans and President Biden's Democratic administration on raising the federal government's $31.4tn debt ceiling have paused
VIRGIN ISLANDS REGGAE CARIBBEAN RIDDIMZ
Biden Administration Eyeing High-Profile Visits to China: The Biden Administration is heating things up by looking into setting up a series of top-level visits to Beijing by top officials in the coming months
Oh Happy Day Edwin Hawkins - Anthony Brown w FBCG Combined Choir
New evidence in special counsel probe may undercut Trump’s claim documents he took were automatically declassified
'Stand by Me' performed by Karen Gibson and The Kingdom Choir
A French court of appeals confirmed former President Nicolas Sarkozy's three-year jail term for corruption and influence peddling
National Anthem of the British Virgin Islands - Oh, Beautiful Virgin
Debt Ceiling Crises Have Unleashed Political Chaos
Hello Dolly
Weibao Wang, a former software engineer at Apple, was charged with stealing trade secrets related to autonomous systems, including self-driving cars
for KING & COUNTRY - Amen (Reborn) [feat. Lecrae & The WRLDFMS Tony Wi
Mobile phone giant Vodafone to cut 11,000 jobs globally over three years as new boss says its performance not good enough
Bob Marley - Get Up Stand Up
Elon Musk compares George Soros to Magneto, the supervillain from the Marvel Comics series.
Yes He Can
Warren Buffett Sells TSMC Shares Over Concerns About Taiwan's Stability
What A Friend We Have In Jesus
New Study Finds That Secondary Bacterial Pneumonia Is a Major Cause of Death in COVID-19 Patients Who Require Ventilator Assistance
Unforgettable
×