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Tesla is assessing the costs associated with expanding its electric vehicle (EV) production capacity. The expansion project includes fixed construction costs of $2 billion and

Tesla is assessing the costs associated with expanding its electric vehicle (EV) production capacity. The expansion project includes fixed construction costs of $2 billion and variable production costs of $30,000 per vehicle. Tesla plans to produce 100,000 EVs annually, generating $5 billion in revenue.

Requirements:

  • Structure the construction and production costs in a paragraph format.
  • Calculate the total investment and variable costs for manufacturing the EVs.
  • Determine the gross profit margin per vehicle and total gross profit.
  • Analyze the market demand and competitive landscape for electric vehicles.
  • Discuss the strategic implications of expanding Tesla's manufacturing capacity.
  • Evaluate the financial impact of the EV production expansion on Tesla's cash flow.

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