The company this year plans to make at least 21,000 of its $70,000 Model S sedans at its Fremont plant, and double that in 2014. While the factory has capacity to produce as many as 500,000 vehicles a year, the addition of a smaller electric car priced about half that of Model S will require additional plants, Musk said.
"We'll try to locate those close to where people are, close to where the customers are, to minimize the logistics costs of getting the car to them," the Tesla co-founder said in an interview with Bloomberg Television's Betty Liu. "I think long term you can see Tesla establishing factories in Europe, in other parts of the U.S. and in Asia."
Tesla has been an automotive phenomenon this year, with its shares surging more than fourfold and its market value exceeding some established carmakers such as Fiat, the majority owner of Chrysler Group. The Palo Alto-based company reported its first profitable quarters this year, excluding some items, and has seen demand for the Model S outstrip its ability to build the car.
Among the company's accolades, Model S was named 2013 "Car of the Year" by Motor Trend magazine; Consumer Reports magazine in a May review rated it among the best it's ever tested; and this week Tesla said it received top crash and safety ratings in tests by the National Highway Traffic Safety Administration.
Musk provided no details on how much or when Tesla would invest in more factories. The company has opened a small facility in Tilburg, Netherlands, where it's assembling Model S components shipped from California to Europe, for cars it's begun selling there.
While Tesla's next vehicle, the Model X electric sport-utility vehicle, goes into production in Fremont late next year, the timing of the smaller, lower-priced vehicle, isn't firm.
"Certainly, within five years we'll have our mass-market electric car available," Musk told Liu, who is also a correspondent for ABC News. "We'll start seeing hundreds of thousands of electric cars going to market every year."
Musk, in previous interviews, has said the lower-priced car would arrive in about three or four years.
Tesla shares fell 1.1 percent to $147.86 in Wednesday's trading. The shares have surged 337 percent this year, compared with a 16 percent increase for the Russell 1000 Index.