Tesla in no rush to build Mexico plant, focuses on difficult Cybertruck ramp, Musk says After disappointing third-quarter earnings, Musk strikes a pessimistic tone on the global auto market due to high interest rates. The Cybertruck will launch Nov. 30, but volume production won't happen until 2025.
October 18, 2023 08:33 PM UPDATED 4 HOURS AGO LAURENCE ILIFF TWEET SHARE SHARE EMAIL PRINT Tesla Tesla Inc. CEO Elon Musk said the electric vehicle maker is moving forward on plans to build a factory in Mexico to produce affordable vehicles. But it is not pushing an aggressive timeline to do it because of worries about the global economy.
"In Mexico, we're laying the ground to begin construction," Musk said on Wednesday's third-quarter earnings call, "but I think we want to just get a sense of what the global economy is like before we go full tilt."
Musk announced plans for the assembly plant in Mexico in March during the company's investor day event.
Throughout the call, Musk struck a pessimistic tone about high interest rates, in particular, saying they were making it difficult for consumers to afford new vehicles.
"If interest rates come down, we will accelerate," he said in reference to the Mexico plant. He also noted that Tesla's factory in Austin, Texas, which opened last year, has significant room to expand vehicle production.
"I'm not saying things will be bad, I'm just saying they might be," Musk said, adding that he may be "more paranoid" than necessary because he remembers how the Great Recession in 2009 pushed General Motors and then-Chrysler into bankruptcy.
"I am scarred by 2009," Musk said. "I don't want to be going at top speed into uncertainty."
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Tesla reports lower Q3 margin Chinese suppliers to Tesla will invest nearly $1 billion in northern Mexico, officials say Difficult Cybertruck ramp-up Musk also braced Tesla fans and the investor community for a long and difficult ramp-up of the highly anticipated Cybertruck pickup out of the Texas factory. The company announced a launch event for Nov. 30.
"I've driven the car, and it's an amazing product," Musk said of the wildly styled pickup. "I do want to emphasize that there will be enormous challenges in reaching volume production."
He said pickup production should reach a quarter of a million annually by 2025, and said there are around 1 million reservations for the Cybertruck.
Tesla has yet to announce final pricing for the pickup. Musk said the automaker is trying to make it affordable but that it's loaded with new technologies, making cost a challenge.
Musk reiterated Tesla's guidance to produce 1.8 million vehicles this year, but he wavered during the earnings call on whether the company remained committed to achieving 50 percent global volume growth annually for the foreseeable future. He did say he expects Tesla to grow faster than any other car company on Earth "by far."
In its third-quarter financial statement after the market close Wednesday, Tesla said its gross margin shrank from a year earlier as it slashed prices to boost demand in the face of higher interest rates. The company reported a gross margin of 17.9 percent compared with 25.1 percent a year earlier. In the second quarter, Tesla posted a gross margin of 18.2 percent.
Since January, the company has resorted to steep price cuts and discounts, including price reductions of more than 6 percent across models in the third quarter, to propel sales at a time when overall demand is under pressure.
Third-quarter net profit fell 44 percent to $1.9 billion while revenue in the quarter rose 9 percent to $23.35 billion, the slowest pace of growth in more than three years. Analysts had estimated $24.1 billion in revenue for the quarter.
Tesla's adjusted profit margin was roughly in line with expectations, at 17.9 percent.
The company's shares closed down 4.8 percent at $242.68.
Il terzo trimestre non è stato per niente positivo. La produzione è calata del 6% mentre i profitti sono crollati del 44%. La scelta di tagliare i listini sta aiutando la casa americana a continuare a crescere ma il prezzo non è basso. Musk ha dichiarato che la produzione in serie del Cybertruck arriverà solo nel 2025.
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