Tesla (TSLA) confirmed it is increasing its planned capital spending to $10 billion this year to achieve its next phase of growth.
Recently, Tesla has described itself as being “between two major waves of growth.” The first wave was the ramp-up of production of Model 3 and Model Y, which now appears to be reaching a plateau.
The second wave is expected to be the ramp-up of next-generation vehicles, which will hit the market in late 2025.
In the meantime, Tesla is sticking with its current product lineup, which can still grow a bit, but is nowhere near the pace of the Model 3/Y.
To prepare for this next phase of growth and other products in the works, Tesla has announced upcoming record spending, according to a new SEC filing.
In its 10-K SEC filing today, Tesla confirmed that it made $8.9 billion in investments in 2023:
Capital expenditures were $8.90 billion in 2023, compared to $7.16 billion in 2022, an increase of $1.74 billion. Sustained growth has enabled our business to be largely self-financing and we will continue to invest in a number of capital intensive projects and research and development in the coming periods.
That was a new spending record for Tesla in 2023, but now the company says it will be even higher this year.
Tesla announced it plans to spend more than $10 billion this year:
Based on and subject to the foregoing, as well as the pipeline of announced projects in development, any other continued infrastructure growth and varying levels of inflation, we currently expect our capital expenditures in 2024 to exceed $10.00 billion and between $8.00 and $10.00 each. 00 billion US dollars will be in the following two financial years.
The company isn't disclosing exactly where that money will go, but the automaker continues to invest heavily in production operations and continues to expand Gigafactories in Texas and Berlin.
It's possible that Tesla will invest more in Gigafactory Mexico this year – although the company is not promising construction will begin soon.
One of the categories that could drive Tesla's higher spending this year is electric vehicle infrastructure. Tesla is expanding the Supercharger network incredibly quickly, and it's a capital-intensive category. They must build and install the stations at full cost while waiting for the return on investment for years, if not decades, as electric vehicle drivers begin using these stations.
In 2024, Tesla will need to expand the Supercharger network faster and larger than ever before, especially in North America, where non-Tesla drivers will be onboarded in a more meaningful way for the first time.
Tesla also continues to invest billions in computing power to support its AI initiatives. The company recently announced that a new $500 million Dojo computing cluster is coming to New York. CEO Elon Musk also confirmed that Tesla will spend even more money on NVIDIA and AMD processors this year.
Interestingly, the company expects spending to decline in 2025-2026 compared to 2024.
Where else do you think Tesla will spend big in 2024? Let us know in the comments section below.
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