Tesla said it intends to invest $3.6 billion to expand manufacturing capabilities in Nevada and is confident growing software-related profits, reflected in record net income reported Wednesday for the fourth quarter of last year, will keep margins higher than any other automaker.

The company confirmed it plans to produce high volumes of semi-trucks and make enough cell batteries for 2 million light-duty vehicles annually in Nevada.

Nevada Gov. Joe Lombardo posted a photo on Twitter of himself and CEO Elon Musk late Tuesday after the newly elected Republican announced in his first State of the State address Monday night that Tesla had committed to a “brand-new” manufacturing facility for electric trucks in northern Nevada.

The project actually will expand an existing operation at the Truckee Reno Industrial Center, about 20 miles (32 kilometers) east of Reno-Sparks along Interstate 80. But the plan takes the company a step closer to accomplishing previously announced plans to ramp up Tesla Semi production to make 50,000 trucks in North America in 2024.

The leading electric vehicle maker posted adjusted earnings of $1.19 per share in the quarter, up from 85 cents a share a year earlier, and its previous record of $1.07 a share in the first quarter. Analysts surveyed by Refinitiv had forecast EPS of $1.13.

Tesla shares were little changed in after-hours trading. Tesla said Wednesday that it expects sales of about 1.8 million vehicles this year, up 37% from 2022 sales of 1.3 million vehicles.

Tesla just can’t make Wall Street happy despite record 1.3M vehicles delivered in ’22

What’s happening at Tesla

For the full year, the company had adjusted earnings per share of $4.07, up from $2.26 in 2021. But the closely-watched automotive gross margin fell to 25.9% from 27.9% in the third quarter and 30.6% in the fourth quarter a year ago.

Tesla’s once high-flying shares lost 65% of their value last year, the worst year ever for the company’s stock. One of the company’s problems is that it failed to hit its target of a 50% growth in sales in 2022. Its previous aggressive growth rates and strong profit margins were factors that made Tesla the most valuable automaker in the world by far, despite having a fraction of the sales volume of other global automakers.

The automaker’s previously announced sales shortfall was attributed greatly to Covid-related shutdowns, which caused the shutdown not only its Shanghai factory, but many of its stores and suppliers in China.

Tesla also said it will reveal details of its next generation vehicle platform at an investors’ day in March.

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