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What Coronavirus Panic? Elon Musk Is Scouting U.S. Gigafactory Sites For His Cybertruck

Stock market turmoil spurred by growing concerns about the economic impact of the COVID-19 strain of coronavirus may be causing many CEOs to hold off on new multibillion-dollar capital investment projects for now, but not Tesla’s Elon Musk. In fact, he seems to be looking at two major new plant projects that would significantly expand the company’s U.S. operations. 

Musk took to Twitter, his preferred communication medium, on Tuesday to tell his 32 million followers that he’s “Scouting locations for Cybertruck Gigafactory. Will be central USA.” Additionally, he wants “Model Y production for east coast too.” 

He provided no details in terms of timing or investment amount and Tesla didn’t respond to a request for additional details. His legion of Twitter fans certainly liked the news, however, with many quickly recommending potential plant locations.

Currently, Tesla is building up production of Model 3 sedans at its new Shanghai Gigafactory, which is only about half the size the company ultimately envisions. Early this year, Tesla also started preparing the site for its first assembly plant in Europe, near Berlin, that is to start producing vehicles within about two years. The company continues to build out its original Gigafactory in Sparks, Nevada, the main source of Tesla battery packs, where construction began more than five years ago, and operates a Gigafactory in Buffalo, New York, that makes its solar panels.

The Buffalo facility’s capacity hasn’t been fully utilized, and it’s unknown whether a portion of the site could be modified to handle some Model Y production.

Adding a dedicated plant for Musk’s unconventional Cybertruck, a blocky, heavy vehicle that joins Tesla’s lineup within a couple of years, along with a new Roadster sports car and Tesla Semi, would likely cost at least $1 billion, as would a dedicated factory for the Model Y crossover. Production of Model Ys just began in January at Tesla’s main Fremont, California, assembly plant, where it also builds Model 3 sedans, Model S sedans and Model X crossovers. The company currently has U.S. capacity to build between 400,000 and 500,000 vehicles a year at Fremont.

Tesla claims to have hundreds of thousands of potential Cybertruck customers, who need only put down $100 to reserve one–one-tenth the reservation price for a Model 3 following its debut. Although its hard-edged geometric design is polarizing and looks nothing like a conventional pickup, Musk is confident there’s a market for his “badass, futuristic, armored personnel carrier.” 

“Demand is just far more than we could reasonably make in the space of, I don’t know, three or four years, something like that,” he told analysts during Tesla’s fourth-quarter results call. If so, that may be why he sees the need for a dedicated plant.

It’s unclear what Musk’s timetable is for the additional factories or his motivation for announcing what may be very early-stage plans via Twitter. Over the years, he’s made many surprise announcements that at times appeared to be as much about aiding Tesla shares in a rough patch as announcing company strategy. Since closing at a record $917.42 on Feb. 19, Tesla stock has dropped 31% through March 10, hammered along with most U.S. shares by coronavirus worries. 

Tesla rebounded a bit on Tuesday, rising about 6% to $645.33.

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