Tesla’s Investor Day bulletins: what to anticipate from Elon Musk’s newest Master Plan

Tesla is convening its first Investor Day occasion on March 1st at its Gigafactory in Austin, Texas, at which Elon Musk is predicted to unleash upon the world his newest Master Plan for the corporate’s future. Expectations are excessive, however given Musk’s penchant for leaving previous Master Plan guarantees unfulfilled, preserving these expectations in test could also be a clever transfer.  

Musk has stated the occasion is for “individuals and lifetime of earth,” including that “will probably be a message of excellent hope & positivity for the longer term.” That definitely sounds affirming, however the actuality dealing with Musk and Tesla as we speak undercuts plenty of the optimism of that message. 

Wild inventory fluctuations, growing competitors, remembers, product delays, allegations of union busting, and an impending regulatory crackdown are all converging to threaten Tesla’s place as a frontrunner within the EV house. Musk’s disastrous acquisition of Twitter, for which he bought $23 billion in Tesla inventory, and his repeated controversial statements on the social media platform, casts a protracted shadow over Tesla’s rah-rah occasion. 

Still, Musk will get on stage and do his finest to hype the corporate’s product lineup, as he at all times does. It’s additionally an opportunity for him to reset the narrative and remind individuals how Tesla grew to change into a dominant power within the auto business and past. But given the myriad of challenges he’s dealing with, each inside Tesla and out, Musk could discover it tougher to encourage confidence as he as soon as did. 

The predominant showpiece of this occasion would be the third iteration of Tesla’s Master Plan. Whether Musk can have extra success implementing this plan than previous variations appears very a lot doubtful. The firm has been pressured to slash costs to account for falling demand. Musk’s repute as a visionary entrepreneur has taken a flogging since his bungled acquisition of Twitter. And the rising prices of battery supplies are anticipated to place additional strain on Tesla’s revenue margins. 

The first Master Plan, blogged in 2006, learn like a typical startup pitch about boot-strapping its strategy to optimistic money move. In essence, the plan was a simplistic take a look at the technique that Tesla efficiently executed over the subsequent decade: construct a sports activities automotive (the Roadster); use that cash to construct a extra reasonably priced automotive (the Model S); use that cash to construct an much more reasonably priced automotive (the Model 3 and Model Y); and supply electrical energy era choices (Superchargers, house batteries, photo voltaic panels, and many others.).

The subsequent plan, Part Deux, is the place issues begin to go off the rails — actually. Musk promised “a brand new type of pickup truck,” a reference to the long-delayed Cybertruck, in addition to an electrical bus, semi truck, and different battery-powered public transport choices. The semi truck finally emerged (three years late), whereas the transit choices died on the vine. No shock there, given Musk’s open disdain for public transportation. 

So what’s on the menu for Master Plan 3? Musk has stated that it’ll define “the trail to a completely sustainable power future for Earth,” including that “the longer term is brilliant!” While that appears fairly obscure, Musk has teased extra particular features, tweeting in March 2022 that the plan may also signify a convergence of Tesla with two of his different firms, SpaceX and The Boring Company. 

“Main Tesla topics shall be scaling to excessive dimension, which is required to shift humanity away from fossil fuels, and AI,” Musk wrote. “But I may also Include sections about SpaceX, Tesla and The Boring Company.”

The “excessive dimension” jogged my memory of a latest earnings name by which Musk predicted Tesla would finally exceed the worth of Apple ($2.3 trillion market cap) and Saudi Aramco ($2.11 trillion) mixed, which might quantity to a valuation of about $4.5 trillion. Not a brand new forecast for Musk, who has made related predictions in 2015 and 2017. 

But let’s drill down on a few of the particular bulletins we count on to listen to throughout this week’s occasion. 

Given all of the references to a “brilliant future” and a latest tweet from the corporate in regards to the “Tesla ecosystem,” full with a GIF of a Tesla plugged into a house geared up with a photo voltaic roof, that large outdated ball of plasma within the sky is more likely to play a key function on this iteration of Musk’s plan. 

It wouldn’t be a brand new addition; solar energy featured prominently within the “Master Plan, Part Deux,” coming because it did proper on the heels of Tesla’s questionable acquisition of Musk’s cousin’s firm, SolarMetropolis. But Tesla’s photo voltaic roof installations have been sluggish going, and income from the corporate’s house power enterprise stays mired at round 5 p.c. 

Still, photo voltaic power figures prominently into Musk’s plan to switch fossil fuels with renewables. Musk usually speaks hyperbolically about Tesla turning into probably the most important and essential firm within the historical past of the world, enabled by its capability to see past mere automotive gross sales to a world populated by robotic helpers, self-driving automobiles, and solar-powered properties. 

In a latest earnings name, Musk stated that the corporate has “made plenty of progress” on its forthcoming robotaxi. He additionally predicted mass manufacturing of the brand new autonomous automobile would start in 2024. Sure. 

The undeniable fact that the corporate is designing a standalone robotaxi speaks to its failures in executing previous grasp plans. Tesla’s second grasp plan promised that “all Tesla automobiles can have the {hardware} essential to be totally self-driving with fail-operational functionality.” Turns out that these automobiles will needn’t one however two {hardware} upgrades to allow this functionality. 

In 2019, Musk stood on stage on the firm’s first AI Day and vowed that these automobiles could possibly be used as a part of an unlimited “Tesla Network” of robotaxis, incomes their homeowners passive earnings whereas driving round autonomously, searching for fares. By 2020, a “million” Tesla robotaxis could be out on the highway, Musk stated. 

Three years later, we’ve robotaxis, however they’re driving for firms named Waymo and Cruise, not Tesla. What Musk does have is a reasonably succesful Level 2 driver-assist system that’s mislabeled as Full Self-Driving (FSD). California’s DMV has accused Tesla of making false claims about its automobiles’ autonomous driving capabilities — or lack thereof. And the National Highway Traffic Safety Administration prodded the corporate into recalling almost 363,000 automobiles with FSD as a result of they preserve blowing by means of yellow lights and cease indicators. 

Will the robotaxi be the primary automobile to be constructed on Tesla’s next-generation platform? It’s nonetheless unclear, however Musk has been dropping hints about the price financial savings the corporate is making an attempt to realize because it seems down the highway towards future, extra reasonably priced automobiles.

Musk has stated that the Gen 3 platform shall be half the price to the Model 3 and Model Y platform. It may also “be smaller” than these automobiles, however Musk is predicting that it might finally “exceed the manufacturing of all our different automobiles mixed.”

The aim, he has stated, is to get to a spot the place Tesla could make two automobiles for a similar value as one Model 3. That doesn’t imply that Tesla plans on promoting this automobile for half the value of a Model 3 — solely that it’s designing a extra environment friendly manufacturing course of so it may well make this future automobile quicker and less expensive. Tesla at present earns extra money for each automobile it sells than any of its rivals, a undeniable fact that it’s utilizing to its benefit because it ignites an EV value conflict.

Musk has stated that Tesla will finally have a $25,000 electrical automotive, although the date for that retains getting pushed. Analysts have solid doubt on that quantity, arguing that provide chain circumstances have modified since that unique prediction. Still, a $30,000 EV could possibly be possible, which might nonetheless give the corporate an enormous increase.

Musk’s large, bizarre, long-delayed truck is meant to enter quantity manufacturing later this 12 months. Given the spike in sightings of preproduction Cybertrucks on the roads round Fremont, it appears seemingly we’ll see a manufacturing model throughout this investor occasion. 

The newest sightings have revealed some main modifications to the Cybertruck, together with tweaked entrance and rear fascias, boxier dimensions, and an enormous ass windshield wiper. Tesla is below monumental strain to start out manufacturing, having already fallen behind rivals like Rivian, Ford, and GMC within the electrical pickup race.

The next-gen Tesla Roadster is one other candidate for attainable reveal throughout Investor Day. Musk first introduced the $200,000 Roadster at a splashy occasion in November 2017, promising that the bottom mannequin might go from 0 to 60 in a staggering 1.9 seconds. He additionally stated that the Roadster would have a 200kWh battery pack, a 620-mile vary, and a attainable rocket-assisted dealing with, courtesy of SpaceX. (Could that be the SpaceX crossover Musk beforehand teased in his tweet?)

Whether Musk will need both automobile on stage throughout an occasion ostensibly about Tesla’s future, given their standing as symbols of the corporate’s previous failures, is a query that’s above my paygrade. This I can say: earlier than he can credibly promote one other grasp plan for Tesla’s future, he might want to grasp his personal impulses to make outrageous claims. Otherwise, it’s all simply plenty of scorching air.