Mar 10, 2020 - Energy & Environment

Tesla weighs Nashville for new vehicle factory

Tesla CEO Elon Musk

Photo: Brendan Smialowski/AFP via Getty Images

Tesla CEO Elon Musk said he's "scouting" central U.S. locations for a factory that would build the upcoming Cybertruck, as well as the Model Y crossover for deliveries on the East Coast.

Why it matters: The announcements via Twitter Tuesday night add some clarity to expansion plans for the Silicon Valley electric automaker, which has recently found itself on better financial ground ahead of key product launches.

What we're hearing: A source familiar with the planning says one of the locations being considered for the new factory is Nashville, Tennessee.

  • “Incentives play a role, but so do logistics costs, access to a large workforce with a wide range of talents, and quality of life,” Musk told The Wall Street Journal in an email.
  • Tennessee is a hub of auto manufacturing, with GM, Nissan and Volkswagen — along with many auto suppliers — already operating in the state.

Where it stands: All-wheel-drive versions of the futuristic-looking Cybertruck are slated to begin production in 2021, while the less-expensive rear-wheel-drive model will follow a year later.

  • The Model Y, a small crossover utility, recently began production at Tesla's Fremont, California, factory. Tesla also recently opened a factory in China for the Model 3 and Model Y and is building a plant in Germany, too.
  • "Should Tesla build Model Ys in the new factory, the vehicle will be manufactured in four places — China, Germany and Fremont, California, are the others," CNBC notes.

Quick take: Tesla has likely learned a lot about manufacturing efficiency as it muscled through problems encountered in getting Model 3 up and running in Fremont. They won't make the same mistakes again.

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