SAN FRANCISCO, April 23 (Reuters) - Tesla said

on Tuesday that it will use its existing factories to build new

and more affordable vehicles as early as late this year, leaving

investments in new factories in Mexico and India unlikely in the

near term.

The world's top EV maker said it plans to raise production

by 50% from 2023 to its current capacity of close to 3 million

vehicles before investing in new manufacturing lines.

"This update may result in achieving less cost reduction

than previously expected but enables us to prudently grow our

vehicle volumes in a more capex efficient manner during

uncertain times," the company said.

Investors cheered the decision not to take the risks of

building new models in new factories, with Tesla shares jumping

12% in after-hour trading despite the company's quarterly

results missing financial targets.

"I think it's a positive that he's not just barreling

ahead with an expansion plan, ignoring the challenges in the

market and the fact that he's doing a cheaper vehicle from the

existing product line," said Elliot Johnson, chief investment

officer at Evolve ETFs, which manages nearly $6 billion in

assets, including investments in Tesla and other EV makers.

Reuters exclusively reported on April 5 that Tesla had

scrapped plans to launch its cheap vehicle, known as Model 2,

which Tesla planned to build in Texas, Mexico and a third

country. The Model 2 had been expected to cost $25,000 and drive

Tesla's growth into a mass-market automaker.

Musk had responded to the Reuters report with a message on X

that "Reuters is lying." He did not give details and on Tuesday

he did not directly address the Reuters report.

Instead, Tesla discussed unidentified new models that

appeared to be different products.

In January, Musk said Tesla aimed to deliver the cheaper new

model in the second half of 2025, adding that the model will

have "revolutionary manufacturing technology" and generate the

next wave of growth for Tesla.

But Lars Moravy, head of Tesla's engineering, said on

Tuesday that new manufacturing process and production lines come

with "some risks," and the automaker made a "major strategy

shift" to utilize its facilities to build low-cost vehicles in a

fast and efficient manner.

Musk had been expected to meet with India Prime Minister

Narendra Modi on Monday and announce major investments in an

auto factory to produce a small, affordable model. Musk canceled

at the last minute, citing "very heavy Tesla obligations."

Musk said last year that Tesla will "definitely" build its

factory in Mexico, but that the timing of the factory would

depend on the economy and interest rates that reduce the

affordability of vehicles. He also said that Tesla would start

the initial phases of construction last year.

Tesla did not respond to a request for comment on Tuesday on

its plans in Mexico and India.

Smaller peer Rivian, known for its R1S SUVs and R1T

pickup trucks, said last month it would start producing its

smaller, less expensive electric R2 SUVs at its existing U.S.

factory to hasten deliveries in the first half of 2026. It had

previously planned to build the R2 at a new $5 billion plant.