had to cut prices recently to increase demand, but that’s not stopping it from expanding manufacturing capacity at its Gigafactory in Nevada. Investors should be happy, although they might have preferred the money to be used for share buybacks.
In a blog post on Tuesday, the company announced a $3.6 billion investment for facilities in Nevada.
(ticker: TSLA) will build a battery factory capable of producing 100 gigawatt hours of 4680 batteries per year as well as a manufacturing plant for the Tesla tractor-trailer.
4680 refers to the dimensions of the battery. These cells have a diameter of 46 millimeters and a length of 80 millimeters. Most Tesla batteries are in the 2170 format. These cells have a diameter of 21 millimeters and a length of 70 millimeters. Larger batteries are designed to have better energy density and a better power-to-weight ratio.
Essentially, larger cells make electric vehicles more efficient and cheaper to produce.
The Tesla Semi was unveiled in November 2017. The first vehicles were delivered to
(PEP) in December 2022. Tesla wants to deliver 50,000 units per year by 2024. This could generate up to $10 billion in annual sales for the company. Estimated sales in 2023 are around $100 billion.
The new investments in Nevada will create 3,000 jobs, according to the company.
Tesla’s history in Nevada dates back to 2014 when it built a battery factory with a partner
(6752.Japan). The battery plant was designed to produce 35 gigawatt hours of batteries each year. This is enough to manufacture around 500,000 electric vehicles.
It was an ambitious project. Tesla was making about 35,000 cars a year in 2014.
To date, Tesla has invested $6.2 billion in the state, and the battery plant produces about 37 gigawatt hours of batteries per year. Tesla also buys batteries from third-party suppliers.
Some of the expenses should be eligible for grants under the Inflation Reduction Act. Tesla did not immediately respond to a request for comment on the benefits of the new law.
Investors should accept Tesla investing for growth. Some investors may have purchased preferred stocks with shares down more than 50% in the past 12 months.
Investors will have a chance to ask management questions about capital allocation, grants and growth when Tesla reports fourth-quarter results on Wednesday evening.
Tesla shares are down 1.2% in after-hours trading on Tuesday, a sign that investors might have preferred the money to be spent elsewhere.
Tesla stock closed 0.1% higher at $143.89. The
closed down 0.1%. The
Write to Al Root at email@example.com