Tesla announced its plans to open a gigafactory in Monterrey, Mexico as part of the luxury electric car maker's expansion plans. At its Investor Day on Wednesday, Chief Executive Elon Musk revealed the project, now called Gigafactory Mexico.
Tesla engineers also told investors that it will cut assembly costs by half in future generations of cars. Meanwhile, Musk declined to answer a question about the next generation vehicles.
In pre-market activity on Nasdaq, Tesla shares were losing around 6 percent to trade at $191.15.
Regarding Gigafactory Mexico, Tesla said the project will be built just outside Monterrey in Nuevo León. This would be Tesla's third factory outside the U.S. after China and Germany.
Musk said, "We'll continue to expand production at all of our existing factories. So this is not moving output to anywhere, from anywhere. This is supplemental production."
On the previous day, Mexican President Andres Manuel Lopez Obrador had confirmed the news about Tesla factory, which was circulating in the media for some months now.
At present, there is a lane named TESLA in the border crossing between Texas and Nuevo Leon. As per reports, the exclusive lane would help to reduce wait times for cargo going through the border.
Last year, Musk had confirmed that Tesla was considering sites for a new factory in Canada, Mexico, and the U.S. In October, Musk's visit to Mexico and meeting with the governor had ignited rumors of the factory coming to the country.
Tesla, at its four factories, in Fremont, California; Austin, Texas; Shanghai, China; and Berlin, Germany, holds the capacity to build about 2 million cars a year in total. The company in 2022 delivered around 1.3 million cars. Tesla also announced that it built 4 million vehicles in its history. Tesla aims to eventually build 20 million cars a year.
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