Musk touts Mexico factory plans, only hints about future products

Tesla Inc. CEO Elon Musk confirmed Wednesday that the automaker will build a new assembly plant in Mexico.

"We're excited to announce the next Tesla Gigafactory will be in Mexico near Monterrey," Musk said at the company's Investor Day event at its Austin, Texas, factory. Monterrey is the capital of the Mexican state of Nuevo Leon, which shares a border with Texas.

"We will continue to expand production at all of our existing factories," Musk said, naming facilities in California, Texas, Nevada, Germany and China. "So GigaMexico would be supplemental to the output at all other factories."

Musk didn't say what vehicle will be built in Mexico, but he and other company executives dropped several hints that Tesla is planning to build a more affordable vehicle or multiple vehicles on a new platform. One of those vehicles could be a dedicated robotaxi without human controls.

Tesla did say again that the Cybertuck is coming this year, with volume production expected in 2024.

Tesla executives also outlined new manufacturing and engineering efficiencies and other innovations that could cut production costs for the new vehicle platform in half compared to the compact platform used for the Model 3 sedan and Model Y.

Musk claimed consumers' appetite for Tesla vehicles is essentially infinite but said the automaker has to reduce prices.

"The desire for people to own a Tesla is very high," Musk said. "The limiting factory is affordability."

During the event, Tesla executives led by Musk discussed a wide range of topics for the electric vehicle maker, including a white-paper plan for the world to embrace sustainable energy and the company's innovation in managing every operation from manufacturing to service.

The presentation featured an array of engineers, a possible effort by Tesla to show the depth of its executive bench beyond Musk, the face of the company. Tom Zhu, the new global production chief, took the stage and said Tesla's global capacity is now 2 million vehicles a year.

Musk had been expected to lay out Tesla's plan to make a small, affordable EV that would broaden its appeal and fend off mounting competition. But executives did not detail new vehicle model plans.

Instead, Musk outlined his vision for a global switch to EVs, driven by $10 trillion in spending to develop sustainable energy worldwide.

“Earth will move to a sustainable energy economy,” Musk said. “And it will happen in your lifetime.”

Heat pumps

One area for future expansion for Tesla is heat pumps. Musk and Drew Baglino, senior vice president of powertrain and energy engineering, said heat pumps could dramatically cut home and office-heating costs, calling them one of the low-hanging fruit of the transition to sustainable energy.

The company also touted its growing ability to get production facilities up and running quickly. Tesla said it has broken ground on a lithium refinery in Corpus Christi, Texas, and aims to start output of battery-grade lithium chemicals within 12 months.

“That’s the target,” Baglino said.

Tesla presented a Master Plan 3 focused on the transition to sustainable energy across the globe in a slide presentation as part of Investor Day. Musk said the company will publish a formal report with all its assumptions and calculations to support the argument that there is a clear path to the transition through electrification of the economy.

The new corporate vision aims to build upon the U.S. EV market leader’s growth from a niche player to a mainstream automotive manufacturer. Tesla’s two previous strategic plans were unveiled in 2006 and 2016.

Musk published his first Master Plan more than a decade ago, laying out Tesla’s go-to market strategy of building an electric sports car, then a series of more affordable cars. The company has executed on that vision with the Roadster, the Model S and the Model 3 sedan — its cheapest vehicle that starts at around $43,000.

Ten years later, Musk released Master Plan, Part Deux, as Tesla was acquiring SolarCity. Musk served as chairman of the solar-panel installer, which was led by his cousins. That plan talked about solar roofs with battery storage, an expanded vehicle lineup and self-driving technology.

Bloomberg and Reuters contributed to this report.