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    Home » Top » Musk’s Tesla master plan could cost billions

    Musk’s Tesla master plan could cost billions

    By Agency Staff27 July 2016
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    Elon Musk
    Elon Musk

    A 1 500-word manifesto that Elon Musk unveiled last week, outlining his plan to expand Tesla Motors’ electric vehicle line and to build “stunning solar roofs”, may end up costing the company tens of billions of dollars to carry out.

    Musk, Tesla’s chairman and CEO, gave the estimate on Tuesday after a tour of the company’s battery factory under construction in Nevada. He quickly added that he doesn’t plan on spending billions more right away.

    “Over time, this must necessarily be true,” he said. “Don’t quote me saying I plan to spend tens of billions right now because that would be incorrect.”

    Musk took heat from investors last week after delivering a “master plan” that was seen as long on vision and short on details about how he’ll finance his ideas for merging Tesla with rooftop solar installer SolarCity, developing an all-in-one solar and battery solution, and offering electric buses and trucks and autonomous ride-sharing fleets. It followed what was already a rocky month for Tesla, which has been on the defensive about its driver-assist technology following a fatal Florida crash.

    A key manufacturing executive also left for Facebook and Tesla’s stock plunged on news of the potential US$2,9bn takeover of SolarCity.

    Tesla’s shares slipped $0,51 after the close of regular trading to $229 at 7.59pm New York time. SolarCity was virtually unchanged.

    Musk said he was “frustrated” by the media coverage from the crash in Florida and that Tesla’s Autopilot technology has made the company’s cars safer. Earlier on Tuesday, Mobileye, the maker of chips and software for driverless cars, said its cooperation with Tesla wouldn’t extend beyond its EyeQ3 product. Parting ways with Mobileye was “inevitable” and not surprising, Musk said at the battery factory.

    Tesla’s “gigafactory” — which it’s building with Panasonic — is the linchpin of the company’s plan to cut the costs of making the batteries that power its electric vehicles, including the forthcoming Model 3 sedan. Musk has sped up the factory’s production to meet his goal of making 500 000 cars by 2018. That means the plant will need to be making batteries for cars by the end of this year.

    Musk said on Tuesday that he was confident that Tesla would start making the Model 3 by next summer. Tesla may require a “modest” capital raise, but the Model 3 — which was “fully engineered” as of a few weeks ago — could generate $20bn in revenue a year once reaching full production, he said.

    About 14% of the gigafactory was finished as of Tuesday, the company said during the tour. About a thousand construction workers were on site, working to meet Musk’s expedited targets. When completed, it’ll occupy a valley surrounded by scrub brush-covered hills and boast the largest footprint of any building in the world, covering the size of about 107 football fields, according to Tesla.

    The company’s $5bn facility will churn out batteries for both Tesla’s cars and for energy storage systems designed to complement rooftop solar panels on homes and businesses offered by SolarCity, where Musk serves as chairman. Musk said he sees growth in Tesla’s stationary battery production surpassing that of its cars.  — (c) 2016 Bloomberg LP

    • Reported with assistance from Christopher Martin and Tom Randall


    Elon Musk Panasonic SolarCity Tesla Tesla Motors
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