Elon Musk, Chief Executive of Tesla Motors Inc (NASDAQ:TSLA), said that the company is planning to open manufacturing facilities in Europe and Asia to boost production of its planned mass-market battery car, expecting an increase in demand.
“We’ll try to locate those close to where people are, close to where the customers are, to minimize the logistics costs of getting the car to them,” the Tesla co-founder said in an interview with Bloomberg.
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Starting another plant in California will be costly
The electronic vehicle manufacturer is targeting production of at least 21,000 of its $70,000 Model S premium sedans at its Fremont, California plant, and hopes to increase production by two times by 2014. Musk stated that the factory has capacity to roll out around 500,000 vehicles per year, but additional factories are needed to manufacture smaller electric cars, which will be lower in price than the Model S.
While giving an interview in his Fremont factory last month, Musk said that establishing another plant in California would be challenging due to high costs. The Fremont facility was started in the 1960s by the predecessor of General Motors Company (NYSE:GM), and in 1984 it became a joint venture between General Motors and Toyota Motor Corporation (NYSE:TM) (TYO:7203), later acquired by Tesla in 2010.
In the interview, Musk said that establishing another plant in California is a tough task, and the company wants to enhance this plant to its original production capacity of half a million vehicles per year.
There was no estimate provided by Musk on how much the company would shell out to start new factories. As of now, company has a small facility in Tilburg, Netherlands where the Model S is assembled.
Tesla recently filed a patent for Model E
Tesla Motors Inc (NASDAQ:TSLA), named for inventor Nikola Tesla, reported its first ever profitable quarter this year, and also grabbed “Car of the Year” award for its Model S by Motor Trend Magazine. In May, according to Consumer Reports, Tesla was named as the best car it ever tested.
This month Tesla filed an application with the United States Patent and Trademark office for trademark protection of the ‘Model E’ name.
Shares of Tesla Motors Inc (NASDAQ:TSLA) surged more than four times and its market value has spiked higher than some of the automobile juggernauts like Fiat SpA (BIT:F), the majority owner of Chrysler Group LLC. Tesla dropped 1.1 percent to $147.86 at the close yesterday, in New York. Tesla shares have gained 337% this year, compared to a 16% increase for the Russell 1000 index.