Tesla Inc will cut assembly costs for its future generations of cars in half, engineers have told investors, but Chief Executive Elon Musk has not unveiled a much-anticipated affordable small electric vehicle.
Shares fell more than 5% in after-hours trading following presentations at the company’s Investor Day from its headquarters in Texas, United States. A Q&A program continues.
During the first nearly three hours of the webcast on Wednesday, Tesla executives led by Musk discussed everything from a white paper plan for the world to embrace sustainable energy, to the innovation of the company in the management of its operations, from manufacturing to service.
The presentation featured an array 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, spoke and said that Tesla’s global capacity is 2 million vehicles per year.
Musk was expected to lay out a plan to make an affordable small electric vehicle (EV) that would broaden his brand’s appeal and fend off the competition, but by the end of the presentation, executives hadn’t detailed any plans. new vehicle model plans or new financial goals for the year.
Musk declined to comment on a slide showing two hidden vehicles, although an executive said the next-gen platform was not a single car.
Tesla Chief Financial Officer Zach Kirkhorn estimated the company would need to invest six times more than it has to date to meet its long-term goal of increasing production to 20 million vehicles per year, a multiplication by 10 of the current capacity. The bill could be $175 billion, he said.
Musk started the Q&A section 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, China and Germany.
Winning the mass market is essential to Tesla’s goal of producing 20 million vehicles a year by 2030.
The automaker has just four models, all at higher market prices. The Cybertruck pickup is coming this year, executives said.
Musk said Tesla might need just 10 models to achieve annual sales of 20 million vehicles. That would be an average of 2 million sales per year for each model line. By comparison, Japan’s Toyota, the world’s largest automaker by volume, sells just over a million Corollas a year worldwide.
Tesla already has a significant lead over its rivals in making for-profit electric vehicles. Chief engineer Lars Moravy said the company plans 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 cut costs by assembling sub-assemblies and reducing complexity as well as assembly time.
Tesla executive Peter Bannon gave an example of how the company uses data to cut costs. Customer data showed that Tesla owners weren’t using the sunroof, he said, “so we removed it.”
High-profile Tesla investor Ross Gerber tweeted that Wednesday’s presentation amounted to a “huge tease” about the next-generation vehicle. “It happens. They spread it all out. 50% cheaper to build. That would get you $25-30,000 EV!”
Tesla has outperformed the industry in recent years, rapidly increasing deliveries despite the pandemic and supply chain disruptions.
But Tesla has lowered prices in recent months to boost sales, which have been pressured by a weak economy and growing threats from rivals in the United States and China.
Tesla will also have to improve its battery technology, which Musk called a “fundamental limiting factor” for the transition to sustainable energy.
In 2020, Musk unveiled an in-house battery development plan, which he said would make self-driving electric cars priced at $25,000 achievable by 2023, but Tesla is 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 give an update on its production volume of 4,680 cells.