Tesla Inc (NASDAQ:TSLA) shares hit the skids yesterday as investors fretted over the timelines of new product launches, including the much delayed Cybertruck.
A couple of weeks ago the company removed from its website all references to its Cybertruck going into production in 2022 and the company’s founder Elon Musk confirmed yesterday the electric vehicle maker is to put the brakes on several 2022 product launches including the Cybertruck, to concentrate on serving customers in its core business.
“The fundamental focus of Tesla this year is a scaling output,” Musk said. “If we were to introduce new vehicles, our total vehicle output would decrease. This is a very important point that I think people do not logically understand.
“Last year, we spent a lot of engineering and management resources solving supply-chain issues, rewriting code, changing our chips, reducing the number of chips we needed, that was ‘chip drama central’ and that was not the only supply-chain issue. So there’s just hundreds of things and as a result, we were able to grow (output) almost 90%.
“If we actually introduce an additional product, that would then require a bunch of attention and resources on that increased complexity of the additional product resulting in fewer vehicles actually being delivered, and the same is true of this year,” Musk told investors.
Musk unveiled plans for the pick-up truck in 2019 with early 2021 pencilled in as the initial launch date. The pandemic and the concomitant supply issues led to further delays, with the company hoping to release the vehicle, which looks like it was designed on a 1980s home computer using vector-based graphics software, in 2022; now it looks like the vehicle will see the light of day no earlier than 2023.
The company’s shares fell 11.6% yesterday but were up 1.4% in pre-market trading today.
Analysts were hoping for more detail on the ramping up of production at the company’s Austin and Berlin facilities but production guidance was left unchanged.
Meanwhile, in the UK, the government is hoping Musk will do his bit to kick-start its levelling up programme by choosing the UK as the location for the company’s next Gigafactory.
Business secretary Kwasi Kwarteng said the government is “considering and looking” at a site in south-west England, saying he believes Somerset "has the manufacturing skill and competence to be able to sustain an excellent gigafactory".
Two government departments were reported by newspapers as having approached regional authorities and local enterprise partnerships in various parts of the country about locations for a potential factory for an unnamed company.
Musk has previously said he was seriously considering a site in the north-east of England but played down the possibility due to "Brexit uncertainty" at the time.
As Tesla looks to expand with another overseas factory to add to the new sites in Texas and Berlin, the UK will face plenty of competition, including from India, where the transport minister has expressed it willingness to offer strong incentives to ensure low production costs are even lower than its factory in China.