Tesla (NASDAQ:TSLA) may have recently paused production but that doesn’t mean it intends to slow down. The electric vehicle (EV) leader has filed with the city of Austin, Texas to expand its local gigafactory. According to the report, the company has designated the proposed expansion as being for “industrial use facilities with associated improvements.” TSLA stock has been volatile today but it is currently up about 1%. This boost is likely due to the fast approaching second quarter earnings report, not the expansion filing news.
That said, the plans to expand the Texas facility warrant a closer look, as they will prove a positive growth catalyst.
Tesla Is Expanding
It’s worth noting that Tesla’s plans to expand the Austin Gigafactory are not breaking news. The company originally filed for the necessary expansion permits at the start of the month. On July 1, Electrek reported that the EV leader had filed to construct not one but two large buildings at the factory site. The EV-centric outlet noted:
It’s not clear if it would be to increase production of the Model Ys currently being built at the factory or if Tesla plans to use the space to build new models that are supposed to come to Gigafactory Texas next year, like Cybertruck and Tesla Semi.
Yet, the filings cited by Electrek reference “GA 2 and 3” expansions. The use of the abbreviation for General Assembly indicates that Tesla intends to use the new spaces for multiple assembly lines.
Yesterday, a new report from the Austin Business Journal highlighted Tesla’s further plans to continue the Texas expansion. It noted that while neither Tesla nor Elon Musk have offered statements on the expansion, the public filings offer indicate that it intends to ramp up production in Austin. The article also notes that the most recent expansion project has been classified as a “Production Support Area” by Tesla.
StreetInsider reports that Tesla has been acquiring land around the gigafactory campus with the goal of building more than just EVs. The article states that:
Not only will it build Tesla’s most recent and advanced vehicles, but it will also produce the 4680 cell. The most advanced battery on the market.
What It Means for TSLA Stock
All told, it is clear that Tesla is bent on continuing to scale production in Austin. This news comes not too long after Musk classified the Texas and Berlin factories as “giant money furnaces.” Despite the recent production pauses, he seems more focused than ever on increasing production. After a difficult quarter, that is exactly what the company needs. And according to the Austin Business Journal, Musk is intent on breaking ground as soon as possible.
Experts such as InvestorPlace‘s Louis Navellier have stated that TSLA stock can start rising again in the months ahead as markets stabilize. That already seems to be happening. albeit slowly. Now the Austin expansion could generate the type of momentum that TSLA stock needs to pull back into the green. If Tesla can successfully expand Gigafactory Texas, it will be a permanent growth catalyst.
On the date of publication, Samuel O’Brient did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
