Tesla confirms it will continue building Mexican factory, but timing remains to be seen

News on October 19, Tesla CEO Elon Musk announced during Wednesday’s third-quarter earnings call that despite previous news that the company would slow down investment in the Mexican Gigafactory , but Tesla will still build a new factory in Mexico, but the time needs to be determined based on global economic conditions. Musk also pointed out that Tesla is paying close attention to the issue of high interest rates, which has put some pressure on the construction of the Mexican factory.

According to the editor’s understanding, Tesla plans to build a US$5 billion assembly plant near Monterrey, Mexico, which will be used to produce new electric vehicles. Elon Musk has previously said that the electric car factory plans to start production in 2025.

#For Mexico, we are working on infrastructure and factory design in parallel with the engineering development of the new production line where we will build the new production line . I think we want to take a look at the state of the global economy before we go full steam ahead with the Mexican factory. I'm concerned about the high interest rate environment we're in."

Since March 2022, the Fed has 11 times Interest rates were raised, from 0.25% to the current 5.5%, to control inflation. Musk pointed out that high interest rates in the United States have affected car sales nationwide, because for most car buyers, the key issue is the monthly payment. As interest rates rise, so does the interest portion of the monthly payment, which has a negative impact on people buying cars.

Tesla’s total revenue in the third quarter was $234 billion, slightly lower than analysts’ expectations of $240.6 billion. The company also reported adjusted earnings of 66 cents per share, missing analysts' expectations of 74 cents.

Musk emphasized: "We will definitely build a factory in Mexico. We feel good about it, we have invested a lot of energy in looking at different locations, and we feel good about that location. We will build it, It's going to be great. The pressure really comes in the timing... I will keep repeating the financial aspect, which is that interest rates must come down. ”

Additionally, Musk revealed that he is still suffering from the effects of “post-traumatic stress disorder” from the 2007-08 financial crisis, when Tesla was on the verge of financial collapse.

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