DETROIT — Tesla says it will cut the cost of its next generation of vehicles in half, largely by using new manufacturing methods and smaller factories.
CEO Elon Musk and other executives outlined the goals during a 3 1/2-hour investor day presentation at Tesla’s Austin, Texas, headquarters on Wednesday as they presented the company’s third master plan company.
The changes could bring the cost of a new generation of vehicles to around $25,000. Many investors are hoping to see next-generation vehicles, but Musk said they won’t be shown until a proper product is unveiled.
“We’re going to jump the gun when we answer your question,” about new vehicles, he told one analyst.
Tesla shares fell nearly 6% in after-hours trading during the presentation that ended just after 8 pm Eastern time.
Musk announced that Tesla plans to build a new factory in Mexico near Monterrey. Company executives said it would not take production away from any other factories, where Tesla expects to expand production. They say the Mexican plant will make the next generation of vehicles, which will also be built in other factories.
It’s likely that next-generation vehicles will be smaller than the current ones to keep prices down, but that wasn’t clear from the presentation. Many automakers build smaller vehicles in Mexico to save on labor costs and preserve profit margins.
CFRA Analyst Garrett Nelson attributed the decline in Tesla stock to a lack of details on new vehicles as well as the company’s history of seeing share prices rise ahead of major events. , which only drops when actual news is made.
He said the company’s long-term focus may have frustrated some investors, but he sees Tesla’s vision as justifying the stock’s high valuation compared to other manufacturers.
“What they’re laying out really makes the case that it’s worth selling at a huge premium to the rest of the industry,” he said.
Franz Von Holzhausen, Tesla’s design chief, said the company needs to make another sharp cost reduction to reach its ambitious electric-vehicle production target of 20 million cars a year by 2030. Tesla expects which will produce 1.8 million this year.
The company, he said, will build the cars in small modular units, then put the units together. The system uses less space. Executives say that as a result, the next electric powertrain factory will be half the size of the one Tesla recently built in Austin, costing 65% less.
“That also means we can build more factories at the same time,” said Tom Zhu, who heads Tesla’s manufacturing.
Chief Financial Officer Zachary Kirkhorn said the company cut costs in half between the first Models S and X and the second generation, Models 3 and Y. It plans to do that again for the next generation. , but the cars will also be developed at the same time, he said.
The company also says it will design vehicles so they have fewer wires and transistors, and use fewer expensive rare Earth metals in batteries.
“As we improve affordability, the number of customers who have access to our products increases,” Kirkhorn said.
Musk said the demand for Tesla vehicles is great, but many who want one now can’t afford it.
Executives said that Tesla is unique from other automakers because all the people involved in the design and manufacture of the car are in the same room. The company also designs and manufactures many of its parts and software while others rely on tiered parts supply companies.
The company also said it opened 10 of its supercharger stations to owners of other electric vehicles on Wednesday. And it plans to offer a package of unlimited home payments for $ 30 per month in Texas using wind as the source of electricity.
Kirkhorn said the new master plan includes product improvements, rapid volume growth and technological advancements.
Musk began the session saying that there is a clear path to sustainable energy on Earth, but it is necessary to change everything from fossil fuel power to electricity generated by renewable sources. The Earth could support more people than today without destroying natural habitats or massive savings, he said.