Tesla will exceed its $9 billion spending target in 2023 as it introduces new models. In a lower market, Tesla’s shares were down roughly 1% in premarket trade.
Tesla announced on Monday that its capital expenditure for 2023 will exceed the $7 billion to $9 billion target it set earlier this year, as the electric vehicle manufacturer ramps up output at its factories and prepares to launch new models.
After a third-quarter factory retooling that reduced deliveries and ate into earnings, Tesla is set to begin shipments of its revised Model 3 compact sedan and the “Blade Runner”-inspired Cybertruck in the final three months of the year.
According to a regulatory filing, the company’s spending is likely to return to the $7 billion to $9 billion level in the next two years.
Elon Musk, CEO of Tesla, indicated in an earnings call earlier this month that the company was hesitating about building a facility in Mexico due to the country’s volatile economic outlook.
He warned that rising interest rates could have an impact on Tesla demand, on top of the company’s margin-sapping price war this year to sustain sales.
Elon Musk claimed in a post on the X social media platform on Monday that Tesla is advertising on a “small scale and will do so at a larger scale as we figure out what works best.”
He allowed commercials earlier this year, signaling a shift for Tesla, which had previously avoided advertising in favor of relying on Musk’s celebrity and customer enthusiasm for its automobiles.
Tesla shareholders, notably Gary Black, managing partner of The Future Fund, which owns Tesla stock, have urged the company to promote, claiming that price reductions have had only a minimal influence on demand.
In premarket trading, Tesla’s stock was down roughly 1% in a generally worse market.
