Tesla to open Texas factory key to growth ambitions

A general view of the Tesla Gigafactory construction site in Austin, Texas, U.S., October 25, 2021. REUTERS/Brian Snyder

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SAN FRANCISCO, April 7 (Reuters) – Tesla Inc (TSLA.O) will hold an event on Thursday to mark the opening of its $1.1 billion factory in Texas, which will help ramp up production of electric vehicles and batteries essential to its growth ambitions.

The event, called “Cyber ​​Rodeo”, comes after billionaire CEO Elon Musk surprised the market this week by revealing he had bought a 9% stake in Twitter (TWTR.N) and would join the board of directors of the social media platform. Read more

Combined with a new plant in Berlin, the Austin plant is expected to double the company’s annual production capacity to 2 million vehicles. Tesla said it would also increase production at factories in California and Shanghai. Tesla said it expects a 50% annual increase in deliveries over a multi-year period.

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“There will always be the potential for setbacks along the way,” Morningstar analyst Seth Goldstein said, adding that Tesla would eventually overcome any ramp-up difficulties as it did with Model 3 production. A few years ago.

Musk billed the opening event as the biggest party in the world, but a Travis County fire marshal said Tesla told the county there would likely be fewer than 15,000 attendees.

The invitation-only event, which begins Thursday at 4 p.m. local time, will include interactive tours accompanied by food and various live entertainment, Tesla said.

“Grand opening party tomorrow! Doors open at 4 p.m., festivities at 8 p.m.,” Musk said in a Tweeteradding that he would speak at 9 p.m. local time.

Tesla said it would use giant molding presses to make the rear and front of cars in new factories, in a bid to cut manufacturing time and costs.

Tesla said in January it would begin deliveries of Texas-made Model Ys equipped with its internal 4680 batteries by the end of March, but it’s unclear if that happened.

“One of the challenges they are currently facing is that Tesla has not been able to launch volume production of their 4680 cells,” said Guidehouse Insights analyst Sam Abuelsamid.

“So it’s probably going to be a while before the Texas plant can come up to full speed.”

Tesla is expected to produce lower-end, cheaper versions of its Model Y at its Texas factory to fend off growing competition from rivals. It recently received certificates from the US Environmental Protection Agency for two new variants of its Model Y, with ranges of 244 miles and 279 miles, compared to the Model Y’s current range of 330 miles.

Tesla has postponed Cybertruck and Semi truck production until next year at the plant due to parts shortages.

New factories are coming online as Tesla is unable to meet demand due to supply chain disruptions. It posted record first-quarter deliveries, but a recent spike in COVID-19 cases in China forced Tesla to temporarily suspend production at the Shanghai factory for several days. Read more

Russia’s invasion of Ukraine has also pushed up material and fuel costs, and Tesla again raised the price of some vehicles on Wednesday.

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Reporting by Hyunjoo Jin; Additional reporting by Tina Bellon in Austin, Texas, and Akash Sriram in Bangalore; Editing by Gerry Doyle and Anil D’Silva

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