Tesla CEO Elon Musk opened up about his company’s decision to bring its next North American production facility to Austin, Texas, and also shared his thoughts on a third United States factory within the next few years.
Musk joined Jason Stein for the second part of the Automotive News podcast, where the CEO detailed the strong interest of his employees for an Austin Cybertruck factory over other Texas cities.
Before deciding on where Tesla would begin building its second U.S. production facility, Musk says that he had a sitdown with key members of the electric automaker’s team. Some members of Tesla’s management would have to move to Texas to oversee some of the company’s actions in the Lone Star State, and Musk wanted to make sure that those individuals were comfortable with where they would be moving to.
“When talking to key members of the team that would need to move to Austin from California in order to get the factory going, Austin was their top pick to be totally frank,” Musk said. “That was a big factor in choosing Texas and Austin. Specifically Austin. I guess a lot of people from California if you ask them what’s the one place you’d move outside of California, it’s Austin.”
Tesla was conflicted between some Texas cities, like Dallas, as well as Tulsa, Oklahoma, for the home of its next Gigafactory production facility. However, company executives were undoubtedly more prone to Austin, which could have ultimately led to the company choosing that location.
“That was a big factor, you know? Where do you want to spend time? And, where would you potentially move? Austin was just the number one choice,” Musk explained.
Musk personally announced the company’s intentions to build a new production facility in Austin during the company’s Q2 Earnings Call on July 22.
Although Tesla cannot directly sell to consumers in Texas due to current laws, it is the company’s second-biggest market, Musk said. Its centrally-located position in the U.S. was another reason Tesla chose to extend its hand to Austin. Not only would it make more sense economically to place a factory closer to the East Coast, but it also takes some stress away from the environment during the logistics process.
Musk indicated that transporting cars to East Coast-located buyers was not economical, nor was it good for the environment. These two factors, along with an increase in demand, could segway Tesla straight into a third U.S. factory.
The demand for Tesla’s electric vehicles continues to skyrocket, and there is the possibility that the company could end up building a third plant that could be located in the U.S. to take care of those needs.
Stein asked, “Do you think there could be additional areas of the U.S. that you’d consider for manufacturing beyond this?”
“I think at some point, there will be a third Gigafactory [in the U.S.],” Musk explained. “I’d imagine, you know, closer up North, Northeast, most likely.”
The Tesla CEO also indicated that the next facility could come in “four-ish” years as a rough estimate.
Tesla’s ultimate decision to create a manufacturing facility in Austin will cut down on the logistics timeline the company maintains for delivering its vehicles. East Coast customers will undoubtedly experience more efficient delivery timelines as the company will not be transporting cars from its Fremont factory in Northern California to various states in the Eastern half of the country.
Giga, Texas will produce the Model Y, Model 3, Semi, and Cybertruck.
The second part of Musk’s interview with Automotive News is available in its entirety here.