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Mexico's Gigafactory To Play Key Role In Tesla's Model 2 Expansion

There is great anticipation for one of Tesla's next launches: the Model 2, an affordable proposal with which the Austin manufacturer wants to take a huge leap forward in terms of volume, and that according to experts will have more than significant production numbers.

Elon Musk himself confirmed at the time that the new model will be based on a platform that will cost half in its production than that used in the Model 3 and Model Y. The starting price will be around $25,000; a figure that, as always, surely will be higher, with taxes, shipping and other costs added; though at the moment it is the only reference available.

But even taking this into account, Tesla's own expectations are that its sales will allow it to actually exceed the combined deliveries of the Model 3, Model Y, Model S and Model X altogether; this is clearly something that will allow it to reach a very high production volume.

Tesla Model 3, Courtesy of Tesla Inc.

The Chinese media have echoed the industrial plan for this new model, which will bring the annual capacity to 4 million units. To put this in perspective, last year Tesla manufactured a total of 1,369,611 units across all its factories, of which 71,777 were Model S/X and 1,298,434 Model 3/Y.

This means that only for the Model 2 (unofficial name, as it has been also called Model C or Model Q), Tesla will have to practically multiply by three its current combined capacity of all its facilities; which in turn supposes an anticipation of several years and that the manufacturer would already be addressing with its suppliers.

According to the report, this will make it possible to provide Tesla's plants with a high capacity, with those located in the United States, which will be in charge of carrying out 2 million units; the new plant in Mexico, which will provide most of the capacity of the new “affordable” model; and with the factories in Shanghai and Berlin, with 1 million units each one.

Tesla Model S, courtesy of Tesla Inc.

It remains to be seen how the company distributes the production of the Tesla Model 2, since achieving 4 million units only in the Mexico factory has many challenges to overcome, both industrial and logistical, and even strong exposure to geopolitical events. This is something that the Austin-Texas manufacturer has been aware of with the relocation of production outside the United States.

Even the factory's future expansion plans indicate a goal of 2 million units per year at full capacity. So it is evident that part of it will be carried out at Gigafactory Berlin in Europe and at Giga-Shanghai in China. In terms of timing, clients and public in general will also have to wait for a while to meet the newest member of the Tesla family: it is estimated that it will take at least a year to witness its presentation.

Tesla Model X, courtesy of Tesla Inc.

But in the end this is an aspect that will depend on the speed in the construction of the Mexican Tesla plant, which is estimated to begin works at the end of this coming month of May, and which will last for about 9 months. This will mean that the physical part of the facility will be ready to start testings in the first quarter of 2024, and allegedly start mass production at the beginning of the first half of next year.


All images courtesy of Tesla Inc.

Nico Caballero is the VP of Finance of Cogency Power, specializing in solar energy. He also holds a Diploma in Electric Cars from Delft University of Technology in the Netherlands, and enjoys doing research about Tesla and EV batteries. He can be reached at @NicoTorqueNews on Twitter. Nico covers Tesla and electric vehicle latest happenings at Torque News.