Dive Brief:
- Tesla plans to invest about $776 million to expand its electric vehicle factory in Austin, Texas, according to plans filed this week with the Texas Department of Licensing and Regulation.
- The expansion includes two cell testing labs, a drive unit facility, a cathode plant and a die shop for a combined total of about 1.55 million square feet of new development, according to the filings.
- Tesla announced start dates for the end of this month and early February, with completion set between September 2023 to January 2024.
Dive Insight:
Fully operational in 2022, the Tesla Gigafactory produces about 3,000 Model Y electric mid-size SUVs per week, according to a company tweet last month. The plans for the expansion were filed with the state on Jan. 9 (search “Tesla” under project name).
The Elon Musk-owned company produced over 439,000 vehicles total in the fourth quarter of last year, according to a company report. However, that fell short of Wall Street forecasts, according to the Wall Street Journal.
Nevertheless, despite concerns around softening demand and production disruptions, Musk previously shared goals for the Austin factory to reach a production rate of 5,000 Model Y vehicles per week. The expansion plan is the latest sign the electric car maker will stick to these targets.
Manufacturing construction starts, such as EV plants, remain one of the few bright spots in commercial construction this year, according to Richard Branch, chief economist at Dodge Construction Network.
That’s largely because the CHIPS Act and Inflation Reduction Act will continue to prop up high levels of construction activity in the manufacturing sector. Branch expects start activity in the sector to reach $51.2 billion, but said he “wouldn’t be surprised if the upside here was closer to $60 billion.”
