London Daily

Focus on the big picture.
Sunday, Nov 16, 2025

Tesla’s growth ambition comes with a $175 billion price tag

Tesla’s growth ambition comes with a $175 billion price tag

CEO Elon Musk sees infinite demand for Teslas, provides little insight into next-generation vehicle

Elon Musk’s Tesla Inc. spent around $28 billion to cement itself as the world’s most valuable car company. It is now preparing to invest roughly five times that as it strives to meet the next objective: Becoming the world’s largest car maker by volume.

Chief Financial Officer Zach Kirkhorn said publicly for the first time on Wednesday that Tesla could need to spend nearly $150 billion more to achieve its long-term goals, which includes selling 20 million vehicles a year. Today’s largest auto maker sells roughly half that annually, while Tesla delivered around 1.3 million vehicles to customers globally last year.

Tesla leadership, in their presentation to investors gathered at the company’s Austin-area factory, spoke to both the scale of the company’s ambitions and how they had overcome hurdles, including reducing manufacturing costs. What stood out, as much as anything, was what they didn’t talk about in detail: a new vehicle.

A man wearing a face mask following the coronavirus disease (1COVID1-19) outbreak walks by Tesla Model 3 sedans and Tesla Model X sport utility vehicle at a new Tesla showroom in Shanghai, China May 8, 2020. 


Tesla hinted at coming models, displaying a slide with two vehicles cloaked in sheets, without sharing specifics. Wall Street had been clamoring for details on when Tesla might introduce a new, less expensive car that would expand its reach.

Wells Fargo analysts called it disappointing that "there was no reveal, timeline, or even basic product description of the next gen model."

The company currently offers four-passenger vehicles, with a fifth—the Cybertruck pickup—slated to hit the market later this year. The least expensive of those offerings is priced at more than $40,000 in the U.S.

Tesla co-founder and CEO Elon Musk stands in front of the newly unveiled all-electric battery-powered Tesla's Cybertruck at Tesla Design Center in Hawthorne, California on November 21, 2019.


It would be jumping the gun, Mr. Musk said, to discuss a coming vehicle, saying the company would have a separate product event. However, he and others underscored the importance of affordability.

Any new, more affordable model is unlikely to contribute meaningfully to Tesla’s sales until 2025 at the earliest, Bernstein Research analyst Toni Sacconaghi Jr. said in a note to investors. In the meantime, he said, Tesla will need to lower prices to hit its growth targets.

Tesla shares slumped more than 6% in Thursday trading.

Tesla Gigafactory Texas on Jan. 17


Mr. Musk, the chief executive, confirmed plans to build a new factory in Mexico while expanding the company’s existing plants. Tesla currently makes vehicles in the U.S., China and Germany. Mr. Musk has said the company is likely to need roughly a dozen factories to meet its long-term sales goal.

California Gov. Gavin Newsom and Tesla CEO Elon Musk announced the location of the company’s new global engineering headquarters. The facility will be in the former computer-maker Hewlett Packard building in Palo Alto. Photo: Tesla

Tesla will build its next-generation vehicle in Mexico and elsewhere, the company indicated.

Mr. Kirkhorn, the CFO, said his investment forecast of up to $175 billion, including around $28 billion already spent, was intended to illustrate the feasibility of Tesla’s goals.

German Chancellor Olaf Scholz, left, talks to Elon Musk, Tesla CEO, at the opening of the Tesla factory Berlin Brandenburg in Gruenheide, Germany, Tuesday, March 22, 2022. The first European factory in Gruenheide, designed for 500,000 vehicles per ye



"We may choose to vertically integrate more into things. We may find efficiencies elsewhere," he said.

Meanwhile, Tesla is getting into the business of making the materials needed to produce the battery cells that power its electric vehicles. It broke ground on a lithium refinery near Corpus Christi, Texas, and is building a battery materials facility in the Austin area, said Drew Baglino, the company’s senior vice president of powertrain and energy engineering.

"We are also trying to accelerate the pace of the industry by trying some new things that are a little bit more scalable and de-risking certain innovations that improve productivity," Mr. Baglino said.


Tesla is expanding from a position of relative financial strength. The company has weathered periods of extreme financial strain, narrowly avoiding bankruptcy in 2008 and again roughly a decade later as it struggled to ramp up production of the Model 3 sedan, Mr. Musk has said. Now, Tesla is sitting on a war chest of around $22 billion in cash and short-term investments.

The company, which has reported 14 profitable quarters in a row, slashed vehicle prices earlier this year—some by nearly 20% in the U.S.—amid concerns about sagging demand. It has since nudged some prices back up. Tesla found that "even small changes in the price have a big effect on demand, very big," Mr. Musk said.

He again dismissed the notion that Tesla could struggle to find buyers. "Demand for our vehicles, in terms of desire to own them, may as well be infinite," he said.

Unleashing that demand will require cost reductions, though, Tesla powertrain engineering leader Colin Campbell said. "If we want to make EVs more accessible to people, they have to be cheaper," he said. "We can make lower cost products that are still efficient and compelling and we can make them at scale."

Shanghai, China - August 1, 2020: Exterior view of automobile plant Tesla Gigafactory 3 located in Pudong District, Shanghai, China.


Scaling up manufacturing hasn’t always been easy for Tesla. The company faced "production hell" in the early days of making the Model 3. At one point last year, Mr. Musk called the company’s new factories in Germany and Texas "gigantic money furnaces." It has taken Tesla two decades to produce four million vehicles.

On Wednesday, Mr. Musk reflected on the challenge ahead.

"The hard part is building the cars and the entire supply chain that goes with the cars. This is a logistics challenge of extraordinary difficulty," he said.

Newsletter

Related Articles

0:00
0:00
Close
Nearly Half of Job Losses Under Labour Government Affect UK Youth
UK Chancellor Reeves Eyes High-Value Home Levy in Budget to Raise Tens of Billions
UK Urges Poland to Choose Swedish Submarines in Multi-Billion € Defence Bid
US Border Czar Tom Homan Declares UK No Longer a ‘Friend’ Amid Intelligence Rift
UK Announces Reversal of Income Tax Hike Plans Ahead of Budget
Starmer Faces Mounting Turmoil as Leaked Briefings Ignite Leadership Plot Rumours
UK Commentator Sami Hamdi Returns Home After US Visa Revocation and Detention
UK Eyes Denmark-Style Asylum Rules in Major Migration Shift
UK Signals Intelligence Freeze Amid US Maritime Drug-Strike Campaign
TikTok Awards UK & Ireland 2025 Celebrates Top Creators Including Max Klymenko as Creator of the Year
UK Growth Nearly Stalls at 0.1% in Q3 as Cyberattack Halts Car Production
Apple Denied Permission to Appeal UK App Store Ruling, Faces Over £1bn Liability
UK Chooses Wylfa for First Small Modular Reactors, Drawing Sharp U.S. Objection
Starmer Faces Growing Labour Backlash as Briefing Sparks Authority Crisis
Reform UK Withdraws from BBC Documentary Amid Legal Storm Over Trump Speech Edit
UK Prime Minister Attempts to Reassert Authority Amid Internal Labour Leadership Drama
UK Upholds Firm Rules on Stablecoins to Shield Financial System
Brussels Divided as UK-EU Reset Stalls Over Budget Access
Prince Harry’s Remembrance Day Essay Expresses Strong Regret at Leaving Britain
UK Unemployment Hits 5% as Wage Growth Slows, Paving Way for Bank of England Rate Cut
Starmer Warns of Resurgent Racism in UK Politics as He Vows Child-Poverty Reforms
UK Grocery Inflation Slows to 4.7% as Supermarkets Launch Pre-Christmas Promotions
UK Government Backs the BBC amid Editing Scandal and Trump Threat of Legal Action
UK Assessment Mis-Estimated Fallout From Palestine Action Ban, Records Reveal
UK Halts Intelligence Sharing with US Amid Lethal Boat-Strike Concerns
King Charles III Leads Britain in Remembrance Sunday Tribute to War Dead
UK Retail Sales Growth Slows as Households Hold Back Ahead of Black Friday and Budget
Shell Pulls Out of Two UK Floating Wind Projects Amid Renewables Retreat
Viagogo Hit With £15 Million Tax Bill After HMRC Transfer-Pricing Inquiry
Jaguar Land Rover Cyberattack Pinches UK GDP, Bank of England Says
UK and Germany Sound Alarm on Russian-Satellite Threat to Critical Infrastructure
Former Prince Andrew Faces U.S. Congressional Request for Testimony Amid Brexit of Royal Title
BBC Director-General Tim Davie and News CEO Deborah Turness Resign Amid Editing Controversy
Tom Cruise Arrives by Helicopter at UK Scientology Fundraiser Amid Local Protests
Prince Andrew and Sarah Ferguson Face Fresh UK Probes Amid Royal Fallout
Mothers Link Teen Suicides to AI Chatbots in Growing Legal Battle
UK Government to Mirror Denmark’s Tough Immigration Framework in Major Policy Shift
UK Government Turns to Denmark-Style Immigration Reforms to Overhaul Border Rules
UK Chancellor Warned Against Cutting Insulation Funding as Budget Looms
UK Tenant Complaints Hit Record Levels as Rental Sector Faces Mounting Pressure
Apple to Pay Google About One Billion Dollars Annually for Gemini AI to Power Next-Generation Siri
UK Signals Major Shift as Nuclear Arms Race Looms
BBC’s « Celebrity Traitors UK » Finale Breaks Records with 11.1 Million Viewers
UK Spy Case Collapse Highlights Implications for UK-Taiwan Strategic Alignment
On the Road to the Oscars? Meghan Markle to Star in a New Film
A Vote Worth a Trillion Dollars: Elon Musk’s Defining Day
AI Researchers Claim Human-Level General Intelligence Is Already Here
President Donald Trump Challenges Nigeria with Military Options Over Alleged Christian Killings
Nancy Pelosi Finally Announces She Will Not Seek Re-Election, Signalling End of Long Congressional Career
UK Pre-Budget Blues and Rate-Cut Concerns Pile Pressure on Pound
×