Tesla will build next-gen/cheaper electric cars in Texas rather than Mexico first

A new excerpt from Elon Musk’s biography confirms that Tesla will build its first next-generation electric cars in Texas rather than at the upcoming Gigafactory Mexico.

This should be reassuring amid potential delays in building the new plant.

At Tesla’s 2023 Investor Day in March, the automaker unveiled a new car manufacturing system, which CEO Elon Musk claimed would be faster, more efficient, and enable the production of cheaper electric vehicles.

Tesla is calling it the “Unboxed Process”:

The general idea is that Tesla wants to be able to work on separate sections of the vehicle individually and only bring the car together at a new “more final” assembly.

It differs from the more traditional car manufacturing model to move the entire vehicle body down a line all the way to the final assembly.

Tesla’s next-generation vehicles, a cheaper “$25,000 model” and a robotaxi, are expected to be the first to use this new system.

At the same event, Tesla announced its plan to build Gigafactory Mexico in Nuevo Leon, a state bordering Texas. Giga Mexico was expected to be the first Tesla factory to use the “unboxed process.”

A new excerpt from the Elon Musk biography confirmed that it was the plan, but it changed.

Walter Isaacson, a famous biographer, has been embedded in Musk’s life for the past few years, and he is about to release his authorized biography of the CEO.

As is often the case for such publications, he is leaking some information that will be featured in the book to the media in order to create some buzz around the release.

He has now released some information through Axios that confirms Musk wanted to build the new next-gen vehicles in Mexico first, but the plan changed in May – just a few months after the announcement.

Isaacson reported on statement Musk made to him:

“Tesla engineering will need to be on the line to make it successful, and getting everyone to move to Mexico is never going to happen.”

The biographer said that it resulted in a change of plan in May 2023. The decision was made to have both the next-generation cars and robotaxis be built in Austin first.

He said that Musk spent the summer supervising the design of the new workspaces for the new manufacturing process and that “his own workspace and that of his top engineers would be right next to the new high-speed, ultra-automated assembly line.”

City Dwellers’s Take

This is good news amid concerns that Gigafactory Mexico is going to fall behind its ambitious timeline.

These two new vehicles are critical to Tesla’s goal of getting to 20 million vehicles produced per year by 2030.

Any delay in bringing them to market will result in failure to achieve that goal. It is going to be easier to make that happen in an existing factory in Texas.

Furthermore, it should also help replicate the new production process in other factories, like the future Giga Mexico.