Tesla’s Investor Day bulletins: what to anticipate from Elon Musk’s newest Grasp 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 Grasp Plan for the corporate’s future. Expectations are excessive, however given Musk’s penchant for leaving previous Grasp Plan guarantees unfulfilled, protecting these expectations in examine could also be a sensible transfer.  

Musk has mentioned the occasion is for “individuals and lifetime of earth,” including that “it is going to be a message of excellent hope & positivity for the longer term.” That actually sounds affirming, however the actuality dealing with Musk and Tesla in the present day undercuts a variety 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 pacesetter 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 an extended shadow over Tesla’s rah-rah occasion. 

Nonetheless, Musk will get on stage and do his greatest 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 grow to be a dominant power within the auto trade and past. However given the myriad of challenges he’s dealing with, each inside Tesla and out, Musk might discover it more durable to encourage confidence as he as soon as did. 

The primary showpiece of this occasion would be the third iteration of Tesla’s Grasp Plan. Whether or not Musk could have extra success implementing this plan than previous variations appears very a lot unsure. The corporate has been pressured to slash costs to account for falling demand. Musk’s fame 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 primary Grasp Plan, blogged in 2006, learn like a typical startup pitch about boot-strapping its technique 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 inexpensive automotive (the Mannequin S); use that cash to construct an much more inexpensive automotive (the Mannequin 3 and Mannequin Y); and supply electrical energy era choices (Superchargers, dwelling batteries, photo voltaic panels, and so on.).

The following plan, Half Deux, is the place issues begin to go off the rails — actually. Musk promised “a brand new form 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 ultimately 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 Grasp Plan 3? Musk has mentioned that it’ll define “the trail to a completely sustainable power future for Earth,” including that “the longer term is shiny!” Whereas that appears fairly imprecise, Musk has teased extra particular features, tweeting in March 2022 that the plan will even characterize a convergence of Tesla with two of his different firms, SpaceX and The Boring Firm. 

“Fundamental Tesla topics shall be scaling to excessive measurement, which is required to shift humanity away from fossil fuels, and AI,” Musk wrote. “However I will even Embrace sections about SpaceX, Tesla and The Boring Firm.”

The “excessive measurement” jogged my memory of a latest earnings name by which Musk predicted Tesla would ultimately 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. 

However let’s drill down on a number of the particular bulletins we anticipate to listen to throughout this week’s occasion. 

Given all of the references to a “shiny 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 outfitted with a photo voltaic roof, that massive previous ball of plasma within the sky is more likely to play a key position on this iteration of Musk’s plan. 

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

Nonetheless, photo voltaic power figures prominently into Musk’s plan to interchange fossil fuels with renewables. Musk typically speaks hyperbolically about Tesla changing into probably the most important and necessary firm within the historical past of the world, enabled by its capacity to see past mere automotive gross sales to a world populated by robotic helpers, self-driving vehicles, and solar-powered properties. 

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

The truth 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 could have the {hardware} essential to be totally self-driving with fail-operational functionality.” Seems 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 enormous “Tesla Community” of robotaxis, incomes their house owners passive earnings whereas driving round autonomously, searching for fares. By 2020, a “million” Tesla robotaxis can be out on the highway, Musk mentioned. 

Three years later, now we have robotaxis, however they’re driving for firms named Waymo and Cruise, not Tesla. What Musk does have is a reasonably succesful Stage 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 Nationwide Freeway Visitors Security 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 appears down the highway towards future, extra inexpensive automobiles.

Musk has mentioned that the Gen 3 platform shall be half the price to the Mannequin 3 and Mannequin Y platform. It’ll additionally “be smaller” than these automobiles, however Musk is predicting that it may ultimately “exceed the manufacturing of all our different automobiles mixed.”

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

Musk has mentioned that Tesla will ultimately 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 authentic prediction. Nonetheless, a $30,000 EV could possibly be possible, which may nonetheless give the corporate a giant increase.

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

The most recent sightings have revealed some main adjustments to the Cybertruck, together with tweaked entrance and rear fascias, boxier dimensions, and a giant ass windshield wiper. Tesla is underneath huge strain to begin manufacturing, having already fallen behind opponents like Rivian, Ford, and GMC within the electrical pickup race.

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

Whether or not 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. In any other case, it’s all simply a variety of scorching air.