Tesla’s Bold Departure: In a strategic manoeuvre aimed at optimising production efficiency and navigating market uncertainties, electric vehicle titan Tesla has announced a bold departure from its earlier expansion plans. Opting to forego investments in new factories in Mexico and India for the time being, the company instead intends to leverage its existing manufacturing infrastructure to churn out new, more affordable vehicle models.

This shift unveiled amidst the backdrop of Tesla's latest financial results, sent shockwaves through the market, propelling the company's shares up by a staggering 12 per cent in after-hours trading. Investors, it seems, are applauding CEO Elon Musk's decision to prioritise scaling up production capacity before embarking on costly new ventures.

The decision marks a notable departure from Tesla's prior ambitions, including plans to introduce the eagerly anticipated Model 2 and establish manufacturing footholds in key global markets. While Musk had previously hinted at major investments in factories in Mexico and India, recent developments suggest a recalibration of priorities.

Rise of Rivian 

Despite initial scepticism and conflicting reports, Musk's messaging on the matter has been characteristically cryptic. Rather than directly addressing rumours of scrapping the Model 2 and shelving plans for new factories, Tesla's focus seems to have shifted towards exploring new, unspecified models.

Meanwhile, Tesla's smaller rival Rivian has also made waves by opting to streamline its operations. Instead of building a new $5 billion plant as originally planned, Rivian has opted to fast-track production of its smaller, more affordable electric SUVs at its existing U.S. facility. This decision underscores a broader trend in the industry towards prioritizing efficiency and agility over grandiose expansion plans.

With Reuters Inputs