Shares fell more than 5 percent in after hours trade
following the company's investor day from its Texas headquarters.
More than a dozen Tesla executives led by Musk discussed
everything from a white-paper plan for the globe to embrace sustainable energy
to the company's innovation in managing its operations from manufacturing to
service.
The presentation featured an array of senior engineers,
including the new global production chief, Tom Zhu, a nod to Tesla's attempt to
show the depth of its executive bench beyond Musk, the face of the company.
But there were no details about when next generation cars
would be launched and what models would be offered.
Musk had been expected to lay out a plan to make a more
affordable electric vehicle (EV) that would broaden his brand's appeal and fend
off competition.
Tesla's chief financial officer, Zach Kirkhorn, and others
underscored their dedication to cutting production costs.
Kirkhorn estimated Tesla must invest six times more than it
has to date to hit its long-term target of increasing output to 20 million
vehicles annually by 2030, a 10-fold increase from current capacity. The bill
could be $175 billion, he said.
The next investment step will be a new Tesla factory in
northern Mexico, Musk said, announcing the first plant outside of the United
States, Germany and China.
Musk did not comment on plans to revamp the Model Y sedan
next year, called Project Juniper that Reuters flagged in a report on
Wednesday, or a revamped version of its Model 3 sedan - a project codenamed
Highland which Reuters has reported will go into production in September.
Design chief Franz von Holzhausen said the Cybertruck pickup
is coming this year.
Mass market
Capturing the mass market is critical to Tesla's annual
production goal, which is more than the combined production of the two largest
volume vehicle makers - Germany's Volkswagen and Japan's Toyota.
It would also represent a sales volume for Tesla alone of
about a quarter of last year's total global car sales.
Musk said the key to driving Tesla's sales volume would be
bringing prices down for consumers, adding that Tesla's discounts offered this
year had stoked demand.
"The desire for people to own a Tesla is extremely
high. The limiting factor is their ability to pay for a Tesla," Musk said.
Tesla is the most valuable automaker, but its stock has
swung wildly. Shares are down about half from their November 2021 peak, but
have rebounded more than 60 percent this year.
Musk said Tesla could need as few as 10 models, which at
target production would amount 2 million sales per year for each model line. By
comparison, Toyota sells just over 1 million Corollas a year globally.
Tesla already has a lead over its rivals in manufacturing
EVs at a profit. Chief Engineer Lars Moravy said the company expects 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 EVs he
called an "unboxed" model of snapping together sub-assemblies to
reduce complexity and time in production.
Tesla executive Peter Bannon gave an example of how the
company uses data to cut costs. Customer data showed Tesla owners did not use
the sun roof, he said, "so we removed it."
High-profile Tesla investor Ross Gerber tweeted that the
presentation amounted to a "Huge tease" on the next-generation vehicle.
"It's coming. They laid it all out. 50 percent less cost to build. Would
get you a $25-$30k 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, which
were 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 has called the "fundamental limiting factor" for the
transition to sustainable energy and more affordable cars.
Tesla has been struggling to scale up the production of
advanced batteries, called 4680s. Executives on Wednesday said it was likely
they could hit volume production this year, but added they were still testing
two different production processes. -Reuters
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