Automaker and clean energy company Tesla has forecasted high capital expenditures in the next two years as it gears up plans to expand its factory.
Tesla forecasted a capital expenditure between $7 billion and $9 billion in 2024 and 2025 after it disclosed plans to increase the production of a new battery cell and its heavy-duty truck.
The company is also boosting output at its facilities in Germany’s Berlin and Austin, Texas while struggling with the high cost of raw materials such as Lithium used in batteries.
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Recall that Tesla last week disclosed plans to expand its gigafactory in Nevada while planning to invest the sum of $3.6 billion. The company, which disclosed via a statement on its website, also revealed plans to add new team members, numbering about 3k, and two new manufacturing factories; a 100 GWh 4680 cell factory and its first high-volume semi-factory.
Fully operational in 2022, the Tesla Gigafactory produces about 3,000 Model Y electric mid-size SUVs per week, according to the company.
It produced over 439,000 vehicles total in the fourth quarter of last year, according to report, however, that fell short of Wall Street forecasts, according to the Wall Street Journal.
The automaker however entered 2023 with certain challenges, after the company’s stock plummeted by over 71 percent since its all-time high in November 2021 as a result of missing production targets and manufacturing delays.
Also, controversies surrounding the company’s CEO Elon Musk’s antics also took a toll on the brand’s image as investors expressed concerns over Musk’s attention on Tesla which they stated was divided to the detriment of the growth of the company.
Tesla cut its prices in China for the second time in less than three months, stoking expectations of a wider price war for electric vehicles in the world’s largest auto market where demand has weakened.
It slashed prices for all versions of its Model 3 and Model Y cars in China by between 6% to 13.5%. The starting price for the Model 3 was cut to 229,900 yuan ($33,427) from 265,900 yuan.
Tesla also cut prices on its best-selling Model Y and Model 3 cars in Japan, South Korea, and Australia in what a person with direct knowledge of the plan said was part of an effort to help stoke demand for output from its Shanghai factory, which is the U.S. automaker’s single largest production hub.
Nevertheless, despite concerns around softening demand and production disruptions, Musk previously shared goals for the Austin factory to reach a production rate of 5,000 Model Y vehicles per week. The expansion plan is the latest sign the electric car maker will stick to hitting these targets.