It Won’t Be Skimping on Capital Expenditures over the Next Few Years.
The Great Tesla (TSLA 3.94%) On Tuesday, the bellwether manufacturer of electric vehicles (EVs) saw its stock continue to accelerate, surging nearly 4% higher. And that was on a generally fine day for the market overall during which the S&P 500 index notched a 1.5% gain. The company’s announcement of a strategic change contributed to the recent uptick in positive sentiment surrounding Tesla.
Tesla’s 10-K annual report was submitted to the Securities and Exchange Commission (SEC) less than a week after it released its most recent set of quarterly earnings. A discussion on capital expenditures (capex) was one of many things investors had to take in.
Tesla estimates that it will spend $6 to $8 billion on capital expenditures in 2023, and then $7 to $9 billion each of the two years after that. Capex reached just under $7.2 billion in 2022.
Much of the 2023 spend — around $3.6 billion — will be devoted to the expansion of the company’s sprawling “gigafactory” complex in Additionally, funds will be used to increase output at comparable company facilities in Texas and Germany.
According to Tesla, the expansion of its manufacturing capability will be the primary focus of its capital expenditure plans. The next phase of this, added the EV leader, will depend not only on the state of production in the German and Texas facilities but also on “our ability to add to our available sources of battery cell supply by manufacturing our own cells that we are developing to have high-volume output, lower capital and production costs and longer range.”
Tesla also plans to increase production of the Semi, its first heavy truck, in addition to the new battery cells. The niche heavy truck market is somewhat constrained in comparison to the larger consumer vehicle market, but both products have strong potential.