recently had to cut prices to increase demand, but that hasn’t stopped it from expanding its production capacity at its Gigafactory in Nevada. Investors should be pleased, though they may have preferred the money used for share buybacks.
In a blog post on Tuesday, the company announced $3.6 billion in investments for Nevada facilities.
(ticker: TSLA) will build a battery factory capable of producing 100 gigawatt-hours of 4680 batteries per year, as well as a factory for the Tesla semi-truck.
4680 refers to the size of the battery. Those cells have a diameter of 46 millimeters and are 80 millimeters long. Most Tesla batteries have the 2170 form factor. Those cells are 21 millimeters in diameter and 70 millimeters long. The larger batteries are designed for better energy density and a better power-to-weight ratio.
Essentially, the larger cells make EVs more efficient and cheaper to manufacture.
The Tesla Semi was unveiled in November 2017. The first vehicles were delivered to
(PEP) in December 2022. Tesla aims to deliver 50,000 units per year by 2024. That could generate up to $10 billion in annual sales for the company. Estimated revenue in 2023 is about $100 billion.
The new investments in Nevada will create 3,000 jobs, according to the company.
Tesla’s history in Nevada goes back to 2014, when it built a battery factory with a partner
(6752.Japan). The battery factory is designed to produce 35 gigawatt hours of batteries annually. That’s enough to make about 500,000 EVs.
It was an ambitious plan. 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 approximately 37 gigawatt-hours of batteries per year. Tesla also purchases batteries from third-party suppliers.
Part of the expenditure should qualify for subsidy under the Inflation Reduction Act. Tesla did not immediately respond to a request for comment on any benefits of the new law.
Investors should be fine with Tesla investing in growth. Some investors may have preferred buying back shares with stocks that are down more than 50% in the last 12 months.
Investors will have a chance to ask management about capital allocation, subsidies and growth when Tesla reports fourth-quarter results Wednesday night.
Tesla shares fell 1.2% in after-hours trading on Tuesday, a sign that investors may have preferred the money spent elsewhere.
Tesla shares closed 0.1% higher at $143.89. The
closed 0.1%. The
decreased by 0.3%.
Write to Al Root at firstname.lastname@example.org