Tesla CEO Elon Musk adopted a fairly pessimistic tone on Wednesday’s third-quarter earnings name, and it was not simply in regards to the Cybertruck – the Giga Mexico plant was additionally talked about in the identical bleak context.
Whereas he stated he needed to “mood expectations” in regards to the Cybertruck, blaming the product’s distinctive complexities for the gradual manufacturing ramp-up, he was additionally cautious when speaking in regards to the firm’s future plant in Mexico.
He famous that Tesla is transferring ahead on plans to construct the Giga Mexico facility to supply reasonably priced autos, however the firm just isn’t in a rush to take action due to worries in regards to the world economic system.
“In Mexico, we’re laying the groundwork to start development and doing all of the lengthy lead objects, however I believe we need to simply get a way of what the worldwide economic system is like earlier than we go full tilt,” he stated on the decision.
He sounded significantly apprehensive about excessive rates of interest, saying they’re making it tough for consumers to afford new autos. Musk warned that if rates of interest stay excessive or develop even larger, it will likely be that a lot more durable for individuals to purchase a automobile since most consumers use some type of financing when buying a automobile.
“I am not saying issues might be dangerous, I am simply saying they is perhaps,” Tesla’s head honcho stated about his cautious outlook on the economic system. He added that he could also be “extra paranoid” than crucial as a result of he remembers how Basic Motors and Chrysler have been pushed out of business in 2009 by the Nice Recession.
Nonetheless, Tesla will push the accelerator as soon as once more if the state of affairs improves, Musk reassured traders. “If rates of interest come down, we are going to speed up,” he stated in reference to the Mexico plant. Ought to Tesla want extra capability earlier than Giga Mexico begins working, Musk famous that the plant in Austin, Texas, has vital room to increase automobile manufacturing.
In response to Musk’s feedback, the Mexican state of Nuevo Leon the place the long run plant website is positioned vowed to supply funding for the manufacturing facility’s development. On Thursday, October 19, native authorities introduced they might spend over $130 million on infrastructure to help the development of Giga Mexico, in keeping with Reuters.
The mayor of town of Santa Catarina stated native officers are bettering infrastructure within the space to arrange for Tesla’s Giga Mexico.
“On the state and municipal degree, we’re transferring forward with research for the infrastructure requested by Tesla, which is able to quantity to greater than 2.5 billion pesos ($136.5 million) supplied by the state,” Mayor Jesus Nava stated. “We hope within the first half of 2024 to have the beginning of Tesla’s development.”
Tesla first introduced plans to construct a brand new automobile manufacturing facility in Mexico on the Investor Day occasion in March 2023. The corporate stated it will construct its next-generation platform there, which is predicted to underpin each the $25,000 entry-level EV and the Robotaxi.