Tesla shares dive after plans for Gigafactory 1 expansion failed

T

Tesla drops nearly 5% on the stock market on Thursday. The car manufacturer and battery manufacturer Panasonic put a plan for investments in further expansion of the so-called Gigafactory 1 put on hold.

The reason for the move would be, among other things, the lower demand for Tesla models, writes the Asian business newspaper Nikkei. Promised investments in China are also under threat.

“We will continue to invest in Gigafactory 1 if needed. However, we expect that there is much more to be gained by improving existing production equipment than previously estimated,” Tesla company said in the release.

In Gigafactory 1 in the US state of Nevada, lithium-ion batteries are produced and Teslas assembled. The intention was that with a further capital injection the production capacity would be considerably boosted.
 
The parties previously put a sloppy $ 4.5 billion into the mega factory. Hundreds of millions would follow.

Partly because profit margins for electric vehicles are very low, a good deal of thought is being given to the planned investment. A Tesla spokesperson tells the newspaper that the company will continue to invest in Gigafactory 1 if it proves necessary.


By: Nicholas de Kramer

Nicholas de Krammer, а self-taught economic analytic with heave mathematical background. Math behind the economics (and economics behind math) is the strong side of the author. Contact him at nicholas.dekramer@economicinform.com

Add comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Recent Posts

Categories

About us

EconomicInform, EconomicInform.com is a product of EconomicInform LLC. We sincerely believe that economics is one of the most interesting and most underappreciated – in terms of getting some enjoyment out of reading the subject articles – sciences. More on that - at the link. Feel free to drop us a line.