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One core issue Tesla faces is that it has built more manufacturing capacity than the market currently demands for electric vehicles (EVs). The company's recognition that its existing plants have excess capacity for the next two to three years suggests a strategic hesitation to expand infrastructure further without guaranteed demand.
Rather than pushing right into the next-generation platform (often referred to as Gen 3), Tesla seems to be exploring ways to utilize existing lines more efficiently. This approach minimizes capital expenditure (capex) and mitigates the risk of idle manufacturing lines, which would be costly and inefficient.