Tesla vows to halve electric vehicle’s production costs

Tesla Inc will cut assembly costs by half in future generations of cars, engineers told investors, but Chief Executive Elon Musk did not unveil when it will debut a much-awaited affordable electric vehicle (EV).

More than a dozen Tesla executives led by Musk discussed everything from a white-paper plan for the globe to embrace sustainable energy to the company’s innovation in managing its operations from manufacturing to service.

The presentation featured an array of senior engineers, including the new global production chief, Tom Zhu, a nod to Tesla’s attempt to show the depth of its executive bench beyond Musk, the face of the company.

But there were no details about when next generation cars would be launched and what models would be offered.

Musk had been expected to lay out a plan to make a more-affordable electric vehicle (EV) that would broaden his brand’s appeal and fend off competition.

Executives said Tesla’s next generation platform would include more than one vehicle built in standardized factories, but Musk brushed off questions about models in mind.

Tesla’s chief financial officer, Zach Kirkhorn, and others underscored their dedication to cutting production costs.

Kirkhorn estimated Tesla must invest six times more than it has to date to hit its long-term target of increasing output to 20 million vehicles annually by 2030, a 10-fold increase from current capacity. The bill could be $175 billion, he said. The next investment step will be a new Tesla factory in northern Mexico, Musk said, announcing the first plant outside of the United States, Germany and China.

Musk did not comment on plans to revamp the Model Y sedan next year, called Project Juniper that Reuters flagged in a report on Wednesday, or a revamped version of its Model 3 sedan - a project codenamed Highland which Reuters has reported will go into production in September. Design chief Franz von Holzhausen said the Cybertruck pickup is coming this year.

Capturing the mass market is critical to Tesla’s annual production goal, which is more than the combined production of the two largest volume vehicle makers - Germany’s Volkswagen and Japan’s Toyota.

It would also represent a sales volume for Tesla alone of about a quarter of last year’s total global car sales.

Musk said the key to driving Tesla’s sales volume would be bringing prices down for consumers, adding that Tesla’s discounts offered this year had stoked demand.