Why did Musk decide to install a new Tesla plant in Mexico?
New York (CNN) --
New York (CNN) --
Tesla's next vehicle assembly plant will be in Mexico, near Monterrey, the company's CEO Elon Musk announced Wednesday.
"We're very excited about it," Musk said during the company's investor day.
“We will continue to expand production at all of our existing factories.
So this is not moving production anywhere, from anywhere.
This is a supplemental production.”
The company currently has the capacity to build about 2 million cars a year at four factories: in Fremont, California;
Austin, Texas, and Berlin, Germany.
It has set a goal of eventually building 20 million cars a year.
The company delivered just over 1.3 million cars in 2022. The world's largest automaker by production volume, Toyota, delivered just over 10 million cars worldwide in 2022.
The water challenges of the Tesla plant in Monterrey 3:22
Tesla did not comment on the cost of the new plant.
The news confirmed the plans announced on Tuesday by the president of Mexico, Andrés Manuel López Obrador, for Tesla to build its next factory in the country.
Reuters reported that Mexican officials said the plant could cost $1 billion.
The company estimates that building the additional plants needed to reach 20 million vehicles will cost a total of $150 billion to $175 billion, including the $28 billion in investment it has already made in its history.
"Perhaps this total investment seems large," said CFO Zachary Kirkhorn.
"I think it's pretty small relative to our ambitions."
The company also announced that this Wednesday it manufactured 4 million vehicles in its history.
Shareholders sue Tesla and Elon Musk over what they said about the safety of autonomous driving
Tesla shares fell more than 5% in after-hours trading on Wednesday, though that was on top of a bigger drop before Musk's announcement more than three hours after the presentation.
Some investors had hoped that Tesla would announce details about a next generation of vehicles.
Musk declined to answer a question about this.
"We'll have something like our own product event," Musk said.
“We would rush if we had to answer that question.”
In response to another question from an analyst, Musk said he doesn't expect Tesla to ever have more than 10 different vehicles in its product line.
He derided the vast offerings from competing automakers as simply a "mixture" of many similar models.