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Tesla Announces Plans for Next-Generation Electric Vehicle Production in Texas

San Francisco, January 25, 2024, The Europe Today: Tesla, the electric vehicle (EV) giant, plans to commence production of its next-generation electric vehicle at the Texas factory in the second half of 2025, according to an announcement by Chief Executive Elon Musk on Wednesday. The unveiling of this timeline comes amid Musk’s earlier caution about a significant slowdown in sales growth for the current year.

While addressing Tesla’s future plans, Musk acknowledged the production challenges associated with the new vehicle but assured a kick-off in the latter part of 2025. He emphasized the need for “a tremendous amount of new revolutionary manufacturing technology” for the upcoming vehicle. This suggests that enhancing the manufacturing process with innovative technology will be crucial to Tesla’s growth prospects.

Musk revealed that Tesla would initiate production at its Texas factory, with the manufacturing process subsequently expanding to Mexico. Another factory outside North America is also under consideration, with a decision expected later this year.

Despite the promising future plans, Tesla’s shares experienced a 6% decline in after-hours trading, reflecting investor concerns over the anticipated challenges in ramping up production. Musk candidly stated, “We’ll be sleeping on the line practically,” indicating the intensity of efforts required at Tesla’s Texas factory.

Additionally, Tesla issued a warning of “notably lower” sales growth for the ongoing year. The company aims to prioritize the production of the next-generation vehicle, following the release of Models 3 and Y in 2017 and 2020, respectively. The EV maker reported a shrinking fourth-quarter gross margin, emphasizing its transition between two growth waves.

While Wall Street anticipates Tesla to sell approximately 2.2 million vehicles in 2025, marking a 21% increase from the previous year, it falls short of the ambitious 50% long-term growth target set by Musk three years ago. The company did not reiterate this target in Wednesday’s announcement, emphasizing the shifting focus towards the new vehicle platform.