Tesla (NASDAQ: TSLA) announced today in a new 10-Q filing with the SEC that it plans to increase its capital expenditures for the next two years as it will build a new factory, introduce a new vehicle platform, and continue to ramp production at its factories to reach a monumental goal of 20 million vehicles annually by the end of the decade.
In the filing, Tesla said it plans to spend between $7 billion and $9 billion over the next two years, revising its capital expenditure plan for the second time in 2023.
“Owing and subject to the foregoing as well as the pipeline of announced projects under development, all other continuing infrastructure growth and varying levels of inflation, we currently expect our capital expenditures to be between $7.00 to $9.00 billion in 2023 and in each of the following two fiscal years,” Tesla said in the filing.
It marks the second time in 2023 that Tesla has changed its spending plans.
In January in a 10-K filing, Tesla said that it planned to spend between $6 billion and $8 billion in 2023, with between $7 billion and $9 billion to be spent in 2024 and 2025.
However, Tesla now plans to spend at least $7 billion but not more than $9 billion this year as it will build a new factory in Mexico, “to do more vertical integration, expand our product roadmap, and provide financing options to our customers,” the company said.
Additionally, Tesla continues to develop new battery cell technologies, work toward autonomous driving, and ramp manufacturing, which can manipulate its plans for spending, it said:
“We are simultaneously ramping new products, ramping manufacturing facilities on three continents, piloting the development and manufacture of new battery cell technologies and investing in autonomy and other artificial intelligence enabled products, and the pace of our capital spend may vary depending on overall priority among projects, the pace at which we meet milestones, production adjustments to and among our various products, increased capital efficiencies and the addition of new projects.”
The increased spending during these periods depends on “the specific pace of our capital-intensive projects and rising material prices and increasing supply chain and labor expenses resulting from changes in global trade conditions and labor availability associated with the COVID-19 pandemic.”
Last year, CEO Elon Musk said ramping factories is an expensive process. The CEO referred to new production plants in Austin and Berlin, which are continuing to expand production, as “gigantic money furnaces.”
Both factories have reached new production output milestones this year.
Tesla will also begin producing vehicles in Mexico, perhaps within the next year, as it plans to begin construction by the end of 2023.
Disclosure: Joey Klender is a TSLA Shareholder.
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