Tesla’s decision to prioritize manufacturing capabilities over new factory investments has garnered positive investor response, leading to a 12% surge in shares during after-hours trading. Despite quarterly results falling short of financial expectations, the company’s cautious approach has been well-received.
Tesla plans to leverage existing facilities for the production of low-cost vehicles, following a strategic pivot away from the establishment of new manufacturing lines. This shift, described as a “major strategy shift” by Tesla’s Head of Engineering, Lars Moravy, acknowledges the risks associated with new production processes and lines.
Previously, Tesla had indicated plans to engage with India’s Prime Minister Narendra Modi and invest in an auto factory, but these plans were later canceled due to Tesla’s “very heavy obligations.” The company’s focus on expanding production through existing facilities underscores its commitment to cost-effective growth and navigating uncertain market conditions.
