As impressive as Model S is, it’s only phase two of Tesla’s grand strategy. The ultimate goal is to produce a mass-market car that will really get the electric revolution rolling. When that day comes, the company intends to add factories in Europe and Asia to handle the greater production volume, CEO Elon Musk told Bloomberg this week.
Tesla plans to produce some 21,000 units of Model S at its Fremont, California plant this year, and double that number in 2014. That factory has the capacity to produce up to 500,000 vehicles a year. The company also has a small facility in Tilburg, Netherlands, where it assembles Model S components shipped from California for sale in Europe.
“We’ll try to locate [the new factories] close to where people are, close to where the customers are, to minimize the logistics costs of getting the car to them,” said Musk in an interview with Bloomberg Television. “I think long term you can see Tesla establishing factories in Europe, in other parts of the US and in Asia.”
In a July interview, Musk said high costs in California would make building another plant there a challenge. “The real tough question is, beyond this plant, would we establish another plant in California?” Musk said. “That’s where it gets really tricky. What I can say is we do want to ultimately bring this plant to its original production capacity of half a million vehicles a year.”
Tesla’s next vehicle, the Model X crossover, is scheduled to go into production at Fremont late next year. Plans for the smaller, lower-priced vehicle are still vague, but earlier this month, Tesla filed an application with the US Patent and Trademark office to use the name Model E for an automobile, as reported by VentureBeat.
“Certainly, within five years we’ll have our mass-market electric car available,” said Musk. “We’ll start seeing hundreds of thousands of electric cars going to market every year.”
As usual, the market loved Musk’s musings. TSLA hit new highs last week, closing at over $161 dollars a share on Friday.