Tesla's Capital Expenditure to Surpass $9 Billion Mark This Year
Tesla is set to exceed its initial $9 billion capital expenditure target in 2025, driven by extensive factory upgrades and strategic investments.
Highlights
- Tesla Inc. announced in its latest SEC 10-Q filing that its 2024 capital expenditures will surpass the previously set $9 billion goal.
- The surge in capex is primarily attributed to significant factory modernization projects.
- Plans for a new manufacturing facility in Mexico have been postponed due to elevated interest rates.
Tesla Inc. (TSLA), headquartered in Austin, Texas, revealed in its third-quarter SEC 10-Q report that its capital spending for 2024 is expected to exceed $9 billion, mainly fueled by factory enhancements. This exceeds the company's earlier forecast range of $7 billion to $9 billion for the year, which also applied to the next two fiscal years.
The filing highlights that rising costs of materials, supply chain challenges, and increased labor expenses are key factors influencing the elevated capital expenditures.
"We are accelerating the launch of new products, expanding manufacturing facilities across three continents, pioneering new battery cell technologies, growing our Supercharger network, and investing heavily in autonomous driving and AI-powered innovations. Our capital allocation will adapt according to shifting priorities," Tesla stated in the report.
In Q3, Tesla delivered 435,059 vehicles, falling short of analyst expectations of 455,000 units. CEO Elon Musk attributed this to temporary factory shutdowns in Texas and China as part of retooling efforts for the redesigned Model 3 and the upcoming Cybertruck production.
Net income for the quarter was $1.88 billion, down from $3.33 billion year-over-year, impacted by a competitive pricing strategy initiated earlier this year.
Additionally, Tesla’s leadership flagged geopolitical uncertainties and cautioned that construction of the new northern Mexico plant may not commence until mid-2024 due to high interest rates affecting project timelines.
Following these updates, Tesla shares experienced a decline last week, with a slight recovery noted on Monday, though the stock remains down 14% over the past week.
Discover the latest news and current events in Company News as of 28-10-2023. The article titled " Tesla's Capital Expenditure to Surpass $9 Billion Mark This Year " provides you with the most relevant and reliable information in the Company News field. Each news piece is thoroughly analyzed to deliver valuable insights to our readers.
The information in " Tesla's Capital Expenditure to Surpass $9 Billion Mark This Year " helps you make better-informed decisions within the Company News category. Our news articles are continuously updated and adhere to journalistic standards.