In the automotive supplier community, there are rumors of Tesla signing huge contracts for parts enough to produce millions of a yet-to-be-unveiled vehicle.
The sheer size of the contracts, coupled with Tesla’s silence regarding this new vehicle, has even caused some concern among suppliers as they’re putting in a lot of investment into a vehicle that Tesla hasn’t even shown to the world.
Tesla Cybertruck Filmed Utilizing 4-wheel Steering to do a Standing 180-degree Turn, Drift in Reverse on Ice, & performing other Cool Tricks. @Tesla @elonmusk #Tesla
— Torque News (@torquenewsauto) November 10, 2023
Tesla’s next-generation $25,000 vehicle (internally codenamed “robotaxi”) unlike current Tesla vehicles will be built using the company’s next-generation Gen-3 vehicle platform. Tesla initially hoped to start production of the compact $25,000 vehicle at a new plant to be built in Mexico.
However, Elon Musk has decided that given all the new technologies coming with the new vehicle, it’s important that the first production line be close to Tesla’s headquarters in Austin, Texas. Musk has also recently revealed that Giga Berlin will produce Tesla’s next-generation 25,000 euro vehicle.
Some reports suggest that this decision might have delayed the start of production at Tesla’s Mexico plant to as far as 2027.
This is disappointing, especially for Mexico which appears to be going full force to eliminate all roadblocks and improve infrastructure for Giga Mexico.
However, Tesla’s decision to move production of the $25,000 vehicle to Giga Texas also comes with some benefits. In addition to being near Tesla’s top executive team, building the new vehicle at Giga Texas also speeds up the production timeline.
Throughout the Giga Texas build, Tesla has already done a lot of infrastructure work that can be used to support vehicle production at such a massive scale. Meaning, that Tesla can leverage the work the company has done to prepare Giga Texas to quickly reach production of the Gen-3 vehicle.
A few days ago, we reported that Tesla was quietly installing $25,000 vehicle production equipment at Giga Texas. This suggested that Tesla might be closer to producing the Gen-3 vehicle than everyone anticipates.
Today, a long-time Tesla institutional investor has confirmed these rumors and added even more information regarding Tesla’s plans for the next-generation vehicle.
In an interview with CNBC Squawk Box, Tesla investor Ron Baron among other things revealed that Tesla is internally planning to start producing the Robotaxi in 12 to 18 months.
This puts the start of the Gen-3 vehicle production somewhere between late 2024 and early 2025. Given the fact that Giga Mexico hasn’t even started construction, this news came as a shock for a lot of people, however, this is yet another sign that proves Tesla has entirely shifted $25,000 vehicle production plans to Giga Texas.
Ron Baron on $TSLA: I think Tesla's employees are the highest paid workers in the world because they own stock; The stock went down yesterday because of Biden.
This on its own is exciting however, Ron Barron also added that Tesla is planning to produce and sell $5 million $25,000 vehicles a year. The 5 million cars a year number is even higher than earlier supplier comments that shared Tesla has ordered parts enough to produce 4 million $25,000 vehicles a year.
To put this into context, the best-selling vehicle in the world last year, the Toyota Corolla, sold a total of 1.1 million vehicles across the world.
Meaning Tesla, with its upcoming vehicle plans to produce 5 times as many vehicles as the current best-selling car in the world. This is scale and growth that the automotive world has never seen before.
Currently, it’s not exactly clear when Tesla plans to officially unveil this new vehicle to the world. However, we’ll be sure to keep you posted as we get more information about Tesla’s plans.
Until then, make sure to visit our site torquenews.com/Tesla regularly for the latest updates.
So what do you think? Surprised to learn that Tesla is close to production on the $25,000 vehicle? Also, do you think the Gen-3 car will have enough demand to sell 5 million vehicles a year? Let me know your thoughts in the comments below.
Image: Courtesy of Teslaconomics
For more information check out: Truckload of Model 3 & Y’s Sporting the 7 New Tesla Colors Spotted Headed to Giga Texas in Time For Cybertruck Delivery Event
Tinsae Aregay has been following Tesla and The evolution of the EV space on a daily basis for several years. He covers everything about Tesla from the cars to Elon Musk, the energy business, and autonomy. Follow Tinsae on Twitter at @TinsaeAregay for daily Tesla news.