New York (CNN) Tesla’s next assembly plant will be in Mexico, near Monterrey, CEO Elon Musk announced Wednesday.
“We’re super excited about it,” Musk said during an investor day for the company. “We will continue to expand production in all of our existing plants. So this is not a relocation of production to anywhere, from anywhere. This is additional production.”
The company currently has the capacity to build approximately 2 million cars per year at four plants in Fremont, California; Shanghai, China; Austin, Texas; and Berlin, Germany. It has set itself the goal of eventually building 20 million cars per year. The company delivered just over 1.3 million cars in 2022. The largest car manufacturer in the world by production volume, Toyota, will deliver just over 10 million cars worldwide by 2022.
Tesla has not commented on the cost of the new plant. The news was confirmation of plans announced Tuesday by Mexican President Andres Manuel Lopez Obrador for Tesla to build its next factory in the country. Reuters reported that Mexican officials said the plant could cost $1 billion.
The company estimates that building the additional plants needed to produce 20 million vehicles will cost a total of $150 billion to $175 billion, including the $28 billion in investments it has already made throughout its history.
“Perhaps this total investment seems large,” said CFO Zachary Kirkhorn. “I think it’s quite small in relation to our ambitions.”
The company also announced that it has built 4 million vehicles in its history earlier Wednesday.
Shares of Tesla ( fell more than 5% in after-hours trading on Wednesday, though that was slightly higher than a larger drop before Musk’s announcement, more than three hours after the presentation. Some investors hoped that Tesla would reveal details about a next-generation vehicle. Musk declined to answer a question about the next-generation vehicle. )
“We’ll have a real kind of product event,” Musk said. “We would jump if we answered that question.”
In response to another analyst’s question, Musk said he doesn’t expect Tesla to ever have more than 10 different vehicles in its product lineup. He derided rival automakers’ wide offerings as simply a “shaking” of many similar models.
The Inflation Reduction Act passed last year reinstated tax credits of up to $7,500 for buyers of the lower-priced Tesla cars, the Model 3 and Model Y, as long as their list price is below $55,000. To qualify for the tax credit, the cars must be assembled in North America, so final production from the Mexico plant should qualify.
Most global automakers already have assembly plants in Mexico. According to Reuters, there are 20 car assembly plants in the country. General Motors has three, Ford has two, including one that makes its Mustang Mach-E, the EV SUV that rivals Tesla. Stellantis, which builds cars under the Chrysler, Dodge, Ram and Jeep brands, has three.
In addition, Toyota, Honda, Nissan, Volkswagen, Audi, Mazda, Mercedes, Kia and BMW have factories in Mexico.
According to statistics from the U.S. Trade Administration, part of the Department of Commerce, Mexican factories produced just under 4 million cars a year in the years before the pandemic reduced the supply of auto parts, especially computer chips, and reduced car production worldwide. They produced about 3.5 million cars last year. That makes it the seventh largest country in terms of car production.
But 90% of the cars it builds are exported, 76% of which are destined for the United States.