Tesla is getting comfortable with Texas being home. January 2023 filings with the Texas Department of Licensing and Registration show that Tesla is planning to invest over $770 million on construction of factory facilities in the state. These facilities will be designed for battery cell testing and manufacturing, a die shop and a cathode and drive unit.
Basically, it’s all to build more electric cars. The EV maker is investing in expanding the company’s ability to scale up production of electric cars in time for the rest of the auto industry to catch up and switch over to all-electric vehicle production. They are bullish even in a time of economic flux. What are they planning?
What is Tesla planning?
Tesla recently reduced prices of some of their models to help with inflation, then slightly raised them again when their vehicles qualified for more federal tax credits. The goal is to find the sweet spot where EVs can bring in profits without overburdening consumers. Tesla recently set records on profitability and manufacturing efficiency, finally unseating the industry leader for 30 years: Toyota.
The EV maker has been filling out a full product line of electric sedans and the futuristic angular Cybertruck SUV that is still delayed in coming to market. It can be challenging for smaller auto companies to get past the challenges of quality control, recalls, technology development and building vehicles from the ground up, but Tesla continued to persevere.
This is despite additional challenges to the company’s stock caused by the recent disastrous outcomes of owner Elon Musk’s Twitter acquisition. For Tesla to compete in an auto industry that will soon offer hundreds of competing EVs, the company must both find the right price point and master quality control. All while building out other parts of the business to control the full life cycle of EVs and clean energy.
The Texas facilities for Tesla will be in Austin where the headquarters were moved during the pandemic. Tesla’s first EV and battery factory opened in Texas in April 2022, hosting a “cyber rodeo” for shareholders and company fans. The factory manufactures some Model Y crossover vehicles in Austin already. The Cybertruck is slated to be produced there as well.
Tesla also recently opened a vehicle assembly plant outside Berlin. Tesla has been building out EV fast-charging infrastructure through Europe 2022. They have rapidly deployed a phased plan to pilot EV charging for all EVs, not just Teslas. The company has been acting on a multi-year plan to develop businesses in all areas of the automotive and clean energy and transportation industry, to own everything from energy production through solar roofs, to EV charging, to electric vehicle production and high-speed rail. Musk has called his new factories “gigantic money furnaces” in an interview with Tesla Owners Silicon Valley.
The future of energy in Texas
The state of Texas has struggled in the last few years with an overburdened and unprepared energy grid during ice storms and heat waves. It’s not hard to anticipate that Tesla’s move to Texas to take advantage of low taxes and lower cost of living will lead the company to creating an alternative to traditional energy in the state that will scale across the U.S. and Europe to support EV customers charging electric vehicles at home and wanting to produce their own clean energy for domestic use.
The new Texas factories will bring Tesla’s Austin manufacturing facility footprint to an incredible 5.6 million square feet. Tesla is following Apple’s move to build in Austin to prepare for future business opportunities, despite the current uncertain economic climate. The small Texas city is a perfect blend of highly concentrated tech start-ups and low cost of doing business, and many other companies are following suit as being physically headquartered in Silicon Valley becomes less essential for tech companies.
The new Model 3 and Model Y qualify for the full $7,500 federal EV tax credit through March of 2023. If you’re thinking of shopping for an EV, check out our articles on EV tax credit rules that change in early 2023 to find a deal while the rules are in flux before the Inflation Reduction Act loopholes close. You can still purchase a solar roof built into your roof shingles from Tesla. Additionally, you can now purchase standard rooftop solar panels as well as home EV chargers and batteries for self-contained home energy production and EV charging that is 100% clean.
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