Tesla Eyes the Central US for Its Cybertruck Factory

Also today on Speed Lines: More coronavirus news. Because of course.

byPatrick George|
Tesla News photo

Welcome back to Speed Lines, The Drive's daily roundup of what's important in cars and tech. Today we're talking about Tesla and viral epidemics. You know, the usual. 

'Central USA' For Cybertruck Factory

I feel like it's been a hot minute since we heard any news about Tesla's Cybertruck, the angular, stainless steel electric pickup perfectly designed for the dystopian hellscape we currently find ourselves living in. The truck took the internet by storm when it was unveiled last fall, but besides racking up reservations, we've gotten close to radio silence on it since.

Now, thanks to CEO Elon Musk's preferred means of communication, Twitter, we do know Tesla is scouting locations for a new Gigafactory where the truck will be built:

What about Texas, the truckiest state in the union? Bloomberg reports that remains a possibility:

Last month, Musk hinted that a factory could be built in Texas. The Texas Enterprise Fund, created by the state’s legislature under former Gov. Rick Perry, has become one of the largest payers of economic-development incentives in the nation. Texas offered $2.3 million to entice SpaceX, the rocket company Musk founded and runs, to locate a launch facility in Brownsville, on the Gulf Coast near the Mexican border. Tesla’s chip team is based both in Palo Alto, Calif., where Tesla is headquartered, and in Austin, Texas.

Tesla’s sole U.S. auto assembly plant is in Fremont, Calif., where the company makes the Model S, X and 3 and has begun producing the Model Y crossover. Commenting on his tweet Tuesday, Musk said “Model Y production for east coast too,” without elaborating. Texas is the top state for pickup sales in the country and home to GM and Toyota Motor Corp. truck factories.

However, TechCrunch reports Tesla is actually in talks with officials in Nashville instead. I'm sure we'll see several cities and states going to war with tax incentives and such to lure a Tesla plant to their area.

Tesla Finds The Japanese Market Elusive

Tesla had a huge year in 2019 and, barring a recent minor stock hit related to the coronavirus outbreak, still has a valuation that both General Motors and Ford find deeply enviable. But here's an interesting tidbit from Bloomberg: the automaker just can't get a foothold in the Japanese market.

Japan remains the world's third-largest new car market, and while Tesla sold 90 percent of the imported EVs there last year, that came out to just 1,378 cars. Why is that? The story notes it has a little to do with Tesla's brand image in Japan, but probably a lot more to do with not matching the dealer service that Japanese buyers are used to:

A March 2019 poll of more than 1,000 adults by Nikkei Research found that only half knew of Tesla. Nissan, the Japanese maker of the all-electric Leaf, clocked in at 98%.

“Tesla doesn’t have an established brand identity in Japan. Its cars are seen more as toys than anything else,” said Tatsuo Yoshida, a senior analyst at Bloomberg Intelligence in Tokyo.

[...] Tesla’s direct-to-consumer business model also doesn’t always translate well in a market where car buyers are accustomed to high-level hospitality. Dealers often provide perks such as complimentary maintenance and free car washes. Some even make regular home visits to check in with loyal clients.

“Japanese customers don’t buy cars like they do appliances,” BI’s Yoshida said. “The personal relationship with a dealer is really important here.”

That, and buyers may find an expensive foreign electric car to be "risky" in a country where most families have only one vehicle.

FCA And Pirelli Lower Production Over Virus Outbreak

Italy is proving to be one of the countries hit hardest by the coronavirus outbreak—basically, the entire nation is under quarantine at the moment. Italy, of course, remains a manufacturing powerhouse in the automotive sector, so companies like Fiat Chrysler and Pirelli are lowering their production for the time being. Via the Wall Street Journal:

Fiat Chrysler on Wednesday said it would boost efforts in its Italian factories to contain the spread of the virus—which as of Tuesday had infected more than 10,000 people in Italy and killed 631—including intensive sanitization of work and rest areas, changing rooms and washrooms. Daily production will be reduced as part of the new processes, the car maker said.

“As a result of taking these actions the company will, where necessary, make temporary closures of its plants across Italy,” Fiat Chrysler said.

[...] The coronavirus is also now hurting Italian production at Pirelli, where an employee at the tire maker’s factory in Settimo Torinese near Turin has tested positive, the company said late Tuesday.

Pirelli said production at the factory has been slowed so it can function with a limited number of employees present, and that it expects there to be a “progressive recovery” of production in the coming days.

Available stock will be used to supply clients “with a suitable level of service,” Pirelli said.

Hopefully, you won't have to wait too long if you need a new set of P Zeros.

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Your Turn

Where should Tesla build the Cybertruck? And what are the odds it actually goes to production looking like the concept and with the stainless steel body?