Tesla will build its largest gigafactory in Mexico, Musk announced

Tesla Chief Executive Elon Musk announced during an Investor Day session in Austin, Texas, that the company will open a gigafactory in Mexico, in an attempt to increase its global output, according to Reuters.

The electric vehicle plant will be located in the northern border state of Nuevo Leon, near Monterrey, and will cost more than $5 billion to build.

Musk stated that Tesla would increase output at all its gigafactories. Musk outlined Tesla’s innovative approach to managing operations from manufacture to service, including goals to slash assembly costs in half in upcoming car generations.

The plant "will be supplemental to the output of all the other factories," Musk said, calling the announcement "probably the most significant of the day".

Tom Zhu, Tesla's new global production chief, stated that Tesla could produce 2 million vehicles annually.

Musk did not disclose what Tesla would invest in the factory and how many vehicles it would produce annually.

Tesla also has facilities in China, Germany, and the United States.

Tesla is expected to create up to 6,000 jobs in Nuevo Leon and is exploring constructing batteries in the country's heartland as it seeks additional investment.

Cutting costs for the affordable

Musk also announced that Tesla would cut assembly costs by half in future generations of cars and engineers to debut a much-awaited affordable electric vehicle.

Zach Kirkhorn, Tesla's chief financial officer, and others emphasized the company's commitment to lowering production costs.

For Tesla to achieve its long-term goal of doubling output to 20 million vehicles annually by 2030, a ten-fold increase from present capacity, Kirkhorn projected that the company must invest six times more than it has thus far. He estimated that the cost could be $175 billion.

Let’s see how much Musk will cut from costs to spend even more on his gigafactories to create the much-waited-for affordable electric vehicle.