On Tuesday March 7th, Tesla CEO Elon Musk announced that the next generation of Tesla’s small cars would operate primarily in autonomous mode. Musk argued that there is a clear path to delivering a car that would cost half as much to manufacture as Tesla’s Model 3 sedan, but he did not offer details on timelines or models, as reported by Reuters.
Already in 2020 Musk had expressed he was “confident” that Tesla would make a small, attractive $25,000 fully autonomous electric car within the next three years.
We’re heading rapidly towards an electric, autonomous futureElon Musk
On March 1st of this year Musk announced that Tesla will open a new gigafactory in Mexico’s northern state of Nuevo Leon. According to Reuters, it is set to be the biggest electric vehicle plant in the world with an investment of more than $5 billion. At an Investor Day event Austin, Texas, Musk stated that Tesla will increase output at all of its gigafactories in an attempt to cut assembly costs by half in future generations of cars.
The new plan will be supplemental to the output of all the other factories.Elon Musk
“They are now waiting for the last permits, once they are concluded they can start, hopefully, this same month of March,” said Nuevo Leon governor, Samuel Garcia, in an interview with Reuters. “I believe that by the year 2024 the first cars will start.”
García explained that, in a second phase of the plant, it is expected that the company will also produce components such as chips and batteries, and that is why it acquired a large plot of land.
According to Mexican President Andres Manuel Lopez Obrador, the state of Nuevo Leon was chosen after a couple of calls with Musk, and the plant will be established in the city of Monterrey, although there will be a series of commitments to address water scarcity in the region, such as the use and treatment of recycled water within the factory’s processes, including for painting the cars.
There is already an understanding,” said Lopez Obrador at a press briefing. “Yes, they are going to invest in Mexico and the plant will be in Monterrey, with a series of commitments to address the problem of water shortage”.
Musk’s interest in investing millions of dollars in Mexico comes as the country begins to claim the spotlight as a hotspot for nearshoring. With its low costs and location next to the US market, Mexico emerged as an attractive alternative, which in the wake of the pandemic has attracted manufacturing in sectors such as automobiles, electronics, textiles and furniture.
In the last year, at least a dozen companies have landed in Monterrey including Tesla suppliers: the first plant outside Asia of Taiwanese electronics company Quanta Computer, Chinese company Noah Itech and an expansion of Italian brake manufacturer Brembo. Tesla’s new plant will be in a municipality adjacent to Monterrey.
Tesla produced 1.37 million vehicles last year, an annual increase of 47%, thanks in part to the new plant called Giga Texas, which opened in April of last year and which today assembles the Model Y.
In his last quarterly results conference, Musk highlighted that demand far exceeds production, so actions aimed at increasing their levels of assembled units is something the company is thinking about very carefully. Tesla is the seventh automaker to announce investments to assemble electric vehicles in Mexico, in addition to Ford, General Motors, Audi, Stellantis, Volkswagen, and BMW.