Tesla announced on Tuesday that it will use its current factories to make new, cheaper cars starting later this year instead of building new factories in Mexico and India soon. The company aims to increase its vehicle production by 50% compared to that in 2023, reaching close to 3 million vehicles, before considering new factories. While this decision might not save as much money as hoped, it allows Tesla to grow its production without spending too much money, especially during uncertain times.
Investors reacted positively to this news, with Tesla’s stock rising nearly 10%, despite the company missing its quarterly targets. Tesla’s market value was expected to increase by around $50 billion, even though its stock had dropped by 42% this year due to high borrowing costs affecting electric vehicle demand. This move by Tesla could also garner support for a vote in May on CEO Elon Musk’s $56 billion compensation package, which a court had previously invalidated.
Earlier in April, Reuters reported that Tesla had canceled plans to release its affordable Model 2 car, which was supposed to be built in Texas, Mexico, and another country. Musk denied the report, calling it false.
Musk was also expected to meet with Indian Prime Minister Narendra Modi to announce investments in an auto factory for producing a small, affordable model. However, he canceled the meeting at the last minute due to Tesla’s busy schedule, intending to reschedule for later in the year.
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