- Tesla is building a new gigafactory near Monterrey, Mexico, CEO Elon Musk confirmed at the company’s annual Investor Day on Wednesday.
- The automaker is aiming to churn out 20 million EVs a year “basically as soon as we can,” Senior Vice President of Powertrain and Energy Engineering Andrew Baglino said during a presentation to investors. The goal is part of the EV maker’s “master plan” for production, which also includes $10 trillion worth of manufacturing investment.
- The new plant is the latest addition to Tesla’s growing global factory footprint. Musk noted during his remarks that the company will continue expanding production at all of its factories, with the Mexico site supplementing that capacity.
Tesla, which produced its four-millionth vehicle as of Wednesday morning, is hoping that by scaling production and increasing efficiency, it can drive down the cost of its vehicles by up to half.
“We can make lower cost products that are still efficient and compelling and we can make them at scale,” Colin Campbell, vice president of powertrain engineering, said during his remarks. “We're going to build them all in compact and high output factories that are easy, easy for us to build quickly.”
The EV maker is trying new methods for combining manufacturing processes in its facilities in a bid to cut production costs. In Shanghai, for example, such process consolidation has helped the company reduce energy consumption and decrease production cycle time, Tesla global production head Tom Zhu said.
“We're going to keep building new factories, and new lines and we'll come up with new products as well,” Zhu said. “And with all gigafactories and the one organization we’ll be able to replicate unified ideas across factories. Also we will help the new factories . . produce a better quality at a lower cost.”
Tesla’s new facility plans build on its other recent manufacturing announcements. In January, the EV maker announced it was investing over $3.6 billion to build two new factories in Nevada, including a cell plant with enough capacity to produce batteries for 1.5 million vehicles a year.
In addition, construction is underway for Tesla’s lithium refinery in Corpus Christi, Texas. The facility is expected to begin operations by the end of the year.
“We are also trying to sort of accelerate the pace of the industry by trying some new things that are a little bit more scalable and de-risking certain innovations that improve productivity,” Baglino said.