© Reuters. FILE PHOTO: Tesla founder Elon Musk attends Offshore Northern Seas 2022 in Stavanger, Norway August 29, 2022. NTB/Carina Johansen via REUTERS/File Photo
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By Hyunjoo Jin, Joseph White and Akash Sriram
SAN FRANCISCO (Reuters) – Tesla Inc will halve assembly costs on future generations of cars, engineers told investors on Wednesday, but Chief Executive Elon Musk did not say when it will introduce a highly anticipated affordable electric vehicle. .
Shares fell more than 5% in after-hours trading following the company’s investor day from its Texas headquarters.
More than a dozen Tesla (NASDAQ:) executives led by Musk discussed 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 variety of senior engineers, including the new head of global production, 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 on when the next-generation cars will be released and which models will be offered.
Musk was expected to devise a plan to make a more affordable electric vehicle (EV) that would broaden his brand’s appeal and avoid competition.
Executives said Tesla’s next-generation platform would include more than one vehicle built in standardized factories, but Musk dismissed questions about the models in mind.
Tesla’s chief financial officer, Zach Kirkhorn, and others highlighted its dedication to lowering production costs.
Kirkhorn estimated that Tesla must invest six times what it has done to date to meet its long-term goal of increasing production to 20 million vehicles a year 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 the United States, Germany and China.
Musk would not comment on plans to revamp the Model Y sedan next year, called Project Juniper that Reuters noted in a report on Wednesday, or a facelifted version of his Model 3 sedan, a project codenamed Highland that Reuters reported will enter In production in September.
Chief designer Franz von Holzhausen said the Cybertruck will arrive this year.
MASS MARKET
Capturing the mass market is critical to Tesla’s annual production target, which is more than the combined production of the two largest-volume automakers: Volkswagen of Germany (ETR:) and Toyota of Japan.
It would also represent a sales volume for Tesla alone of about a quarter of total global car sales last year.
Musk said the key to boosting Tesla’s sales volume would be to lower prices for consumers, adding that discounts offered by Tesla this year had stoked demand.
“People’s desire to own a Tesla is extremely high. The limiting factor is your ability to afford a Tesla,” Musk said.
Tesla is the most valuable automaker, but its shares have swung wildly. Shares are down about half from their November 2021 high, but have rallied more than 60% this year.
Musk said Tesla might need as few as 10 models, which in target production would amount to 2 million sales per year for each model line. By comparison, Toyota sells just over 1 million Corollas a year worldwide.
Tesla already has a leg up on 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 of joining subassemblies together to reduce complexity and production time.
Tesla executive Peter Bannon gave an example of how the company uses data to cut costs. Customer data showed Tesla owners didn’t use the sunroof, he said, “so we removed it.”
High-profile Tesla investor Ross Gerber tweeted that the filing amounted to a “huge mockery” of the next-generation vehicle. “It’s coming. They designed it all. 50% less build cost. I’d give it an EV of $25-$30k!”
Tesla has outperformed the industry in recent years, ramping up deliveries rapidly despite the pandemic and supply chain disruptions.
But Tesla has cut prices in recent months to boost sales, which have come under pressure from 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” to the transition to sustainable energy and more affordable cars.
Tesla has been struggling to ramp up production of advanced batteries, called 4680s. Executives said Wednesday it was likely they could reach volume production this year, but added they were still testing two different production processes.
