Tesla expects heightened levels of capital expenditures during certain periods depending on the pace of its capital-intensive projects, rising material prices, etc.
American electric vehicle maker Tesla has raised its capital expenditure forecast for 2023 to up to $9 billion, the company announced in a new 10-Q filing with the U.S. Securities and Exchange Commission (or SEC). The new spending plan, which is revised for the second time in 2023, is most likely made as the Elon Musk-owned company seeks to reach a bold goal of selling 20 million vehicles by the end of the decade.
The EV maker now expects to spend between $7 billion and $9 billion this year. This is higher than the previous outlook of $6 billion to $8 billion spending, according to a Reuters report. Tesla, however, maintained its spending outlook for the next two years at $7 billion to $9 billion.
“Owing and subject to the foregoing as well as the pipeline of announced projects under development, all other continuing infrastructure growth and varying levels of inflation, we currently expect our capital expenditures to be between $7.00 to $9.00 billion in 2023 and in each of the following two fiscal years,” Tesla said in the 10-Q filing, which is a financial report that publicly traded companies in the United States are required to file with the SEC quarterly.
Tesla said it has been consistently generating cash flow from operations which it plans to use to do more vertical integration, expand its product roadmap and provide financing options to its customers. Additionally, the automobile manufacturer is working toward developing new battery cell technologies, and more.
“We are simultaneously ramping new products, ramping manufacturing facilities on three continents, piloting the development and manufacture of new battery cell technologies and investing in autonomy and other artificial intelligence enabled products, and the pace of our capital spend may vary depending on overall priority among projects, the pace at which we meet milestones, production adjustments to and among our various products, increased capital efficiencies and the addition of new projects,” it added.
The company expects heightened levels of capital expenditures during certain periods. This depends on the pace of its capital-intensive projects, rising material prices, increasing supply chain, labor expenses, and labor availability.
Tesla’s move to aggressively raise production comes amid its plans to reach the goal of 20 million vehicle sales by the end of the decade. If achieved, Tesla will account for roughly 20% of the global vehicle market, the Reuters report pointed out.
In January the company announced to invest over $3.6 billion in its Gigafactory in Nevada and said to add 3,000 new employees to the facility. Tesla will build two new production facilities in the state. First, a 100 GWh 4680 cell factory that is said to have sufficient capacity to produce batteries for 1.5 million light-duty vehicles annually. Second, a “first high-volume” Semi factory that is Tesla’s electric truck facility.
