Tesla to Invest $6 Billion for a New “Gigafactory” In China

A few months ago, Tesla faced some critical issues with their stocks continue to fall. This led to their CEO Elon Musk to admit in a Twitter post that he hasn’t been well and was working way too much. Everything seemed to have turned around with their stocks continue to go upwards in the past few weeks. In an interview on Recode Decode podcast, he said that they felt like they were going to die during those times, but not anymore.

Musk also believes that there is a good sign that it will continue to go up especially on the next quarter.
Tesla even made a massive multi-billion dollar investment that will be good for two years. This is not by just manufacturing new models though, but it is actually for new factories and equipment for their production.

Tesla is known for their innovative self-driving cars, making them even more in demand not just in the United States but all over the world.

Multi-Billion Dollar Investment

The electric car company expects to spend about $6 billion over the next year or two for new factories together with new equipment. This is to ramp up the production of their new vehicles. Tesla made this announcement last weekend during the regulatory filing. $2.5 billion is what they think they will spend on the capital investments for this year in total, then for the next two years, they might go up to $3 billion.

One of the biggest projects the company is planning on doing is the new factory that will be built in China. Tesla said that once built, they will refer to it as Gigafactory 3, because they would expect it to produce more than 3,000 Model 3 sedans every single week. The first two Gigafactory is located in Clark, Nevada and Buffalo, New York. The first Gigafactory is where they produce batteries as well as the Model 3 drivetrain, and the one in New York is their solar power plant.

It was revealed that this is something the company has been planning to do, but with the trade wars going on they had to think of a way to resolve it. As of now, they are exporting all of their vehicles to China and the stuff tariffs affect their sales. Once the factory in China has been built, they would no longer have to export their vehicles since it will all be made there. Tesla Model 3 sedans are in demand in China because of their “not-so-good” traffic situation.

Aside from this, Musk also revealed his desire to produce a Tesla pickup truck. The Tesla CEO said he is serious about the plan and he wants it to be like a pickup truck out of the sci-fi movie “Blade Runner”, he even explained it as something really futuristic like cyberpunk. The electric car manufacturer said that he doesn’t really care if people will buy it or not, he just wants to make one so bad since it is something he has been wanting to do so for years now. Musk said that if it is something that will only favor a small number of customers, then they would likely create a more conventional truck that everyone may like.

Tesla’s Gets Investigated By SEC And DOJ

Unfortunately, all this excitement doesn’t always mean things are going extremely well. That is because of the Department of Justice and Securities and Exchange Commission’s ongoing investigation in their Model 3 production.

Last Friday, the electric car manufacturer confirmed that FBI agents were indeed looking into whether Tesla misled their investors on the production of the said vehicle. This all started when Musk revealed his desire to make the company private in a Twitter post a few months ago.

The company had to face multiple shareholder lawsuits in September after Musk posted a tweet regarding the company going private.

Tesla admitted that the DOJ is investigating them, and they haven’t received any formal subpoena from the department. While this is still happening, Musk had to step down as chairman of Tesla last September after the SEC filed charges against him.

Even if he is no longer the chairman, he is till the company’s CEO. In a statement, Musk revealed that most of the allegations on a report released by the Wall Street Journal regarding Tesla’s investigation were untrue. He even referred to the journalists of the said website as “terrible people”.