Tesla may be building three more Gigafactories

As Tesla’s orders increase, the electric car company may be building up to three more of its “Gigafactories,” CEO Elon Musk wrote today in a letter to shareholders (pdf), published in conjunction with the company’s fourth-quarter results.

That could bring the company’s number of factories up to a total of five. “Later this year, we expect to finalize locations for Gigafactories 3, 4 and possibly 5 (Gigafactory 2 is the Tesla solar plant in New York),” Musk wrote.

Tesla needs to increase its factory capacity to handle both battery and car manufacturing. The company received close to 400,000 preorders after unveiling its mass-market Model 3 vehicle last March, and fourth-quarter orders for its existing Model S and X vehicles increased 49 percent year over year, Musk wrote. Tesla plans to invest $2 billion to $2.5 billion in capital expenditures before Model 3 production begins in July.

Meanwhile, Tesla missed yet another production goal in 2016. The company expected to deliver 80,000 to 90,000 cars by the end of the year, but only delivered 76,230. Tesla attributed its miss to shifting to a new set of “2.0” sensors for its self-driving Autopilot feature. The company still produced 77 percent more cars in the fourth quarter of 2016 than in Q4 2015.

This was Tesla’s first earnings report since its merger with SolarCity — an all-stock exchange valued at $2.8 billion — closed in November. Between the deal close on Nov. 21 and the end of the quarter, solar operations added $77 million in cash but $85 million in operating expenses.

Yet Musk maintained the company is on track to generate $500 million in cash from its energy generation and storage business by 2019. That includes both its solar business in addition to revenue from Powerwall, its battery for homes, and Powerpack, its energy-storage product for businesses.

Overall, Tesla beat Wall Street estimates for revenue in the fourth quarter of 2016, generating $2.28 billion in revenue, up 88 percent year over year, versus expectations of $2.16 billion. Shares increased about 2 percent in after-hours trading.

On the call with analysts and reporters, Musk also announced that the company’s CFO was stepping down after a little more than a year. The company’s former CFO, Deepak Ahuja, will be coming out of retirement to replace him.

This article originally appeared on Recode.net.

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