“Grasp plan half 3” focuses on sustainability

Electric Vehicle Manufacturers Tesla hosted a 2023 Investor Day presentation in Austin, Texas on Wednesday. CEO Elon Musk took the stage to unveil his “Master Plan 3” and discuss how Tesla plans to scale in the face of increasing competition.

The presentation went into detail about vision and included a review of past achievements, but offered few details about new Tesla products or services.

Just before the presentation began, Musk said, “There is a clear path to a sustainable energy Earth. It does not require destruction of natural habitats. It doesn’t require us to be strict and stop using electricity and being in the cold or anything.” He added, “In fact, you could support a civilization that’s a lot bigger than Earth, a lot more than the 8 billion Humans could actually be sustainably supported on Earth.”

Elon Musk speaks at Tesla’s Investor Day 2023 on March 1st.

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Musk was first joined on stage by Drew Baglino, Tesla’s senior vice president of powertrain and energy engineering. They discussed a future in which the company would play a role in “restoring the power grid to renewable fuels” as it ramps up battery production for both Tesla’s electric vehicles and the company’s utility-scale energy storage systems.

Tesla’s goal is to produce 20 million electric vehicles per year by 2030, executives affirmed. The company reported deliveries of around 1.31 million vehicles for the full year 2022.

During a question-and-answer session following the three-hour presentation, executives asked a question about how Tesla could increase its market share in China.

Elon Musk referred the question to Tom Zhu, who heads up global manufacturing and has led Tesla’s China and APAC business for years. “As long as you offer a product with value at an affordable price, you don’t have to worry about demand,” Zhu said. “We try everything to save costs,” he added, “and pass that value on to our customers.”

Musk added, “Demand is a function of affordability, not desire.” He said, “Even small changes in price have a large impact on demand.”

Zhu also announced that Tesla had produced a total of 4 million cars as of Wednesday.

Tom Zhu speaks at Tesla Investor Day.

Courtesy Tesla

“It took us 12 years to build the first million and about 18 months to build the second million. The third million, 11 months. Then less than seven months to build the 4 millionth,” Zhu said, touting the company’s improvement in operational efficiency.

He said Tesla plans to build new car and battery cell factories and also produce more cars per year at its existing factories.

Tesla Charge Manager Rebecca Tinucci said the company will allocate 9 terawatt-hours to various charging methods in 2022, including home charging with 40,000 Superchargers. (For comparison, the entire U.S. consumes about 4,000 terawatt-hours of electricity per year.) Tinucci also noted that about half of the company’s superchargers in the EU are open to other vehicles, and that the company just opened 10 superchargers in the U.S. to not – Tesla.

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Tesla chief engineer Franz von Holzhausen and the company’s vice president of automotive engineering, Lars Moravy, took the stage to unveil a number of planned manufacturing changes designed to improve the efficiency of Tesla vehicle production. But von Holzhausen said Tesla would not unveil its “next-generation” vehicle just yet.

The company’s powertrain vice president, Colin Campbell, said Tesla’s next powertrain factory will be 50% smaller than Austin’s, but will have the same capacity. He also said the company is working on a novel drive unit compatible with any type of battery cell and a motor that will be built without rare earth metals.

Ahead of Investor Day 2023, Mexico’s President Andres Manuel Lopez Obrador said at a Tuesday news conference that Tesla had agreed to build a large factory in Monterrey, Mexico. He said Tesla has agreed to use recycled water and take other initiatives to deal with the area’s water shortage.

Musk confirmed the factory plans on Wednesday, saying production there would complement, rather than replace, manufacturing at other Tesla plants.

Tesla shares have rebounded from declines in 2022 and are up more than 60% year-to-date. However, on the Wednesday before the event, the stock was down 1.43% and down 5% after the close of business.

Analysts at Mizuho Securities maintained a buy rating on Tesla stock ahead of Investor Day, seeing Tesla as a leader in a growing all-electric vehicle market. They wrote in a note earlier this week, “In the near term, we see continued strength in TSLA’s market share, but see cheaper competitive EVs entering the market as they could potentially dilute TSLA’s share of the US EV market.”

Currently, the lowest-priced Tesla available is the Model 3 sedan, which starts at a price point of around $43,000, they wrote. Seven models from other automakers are currently priced below, Mizhuo noted.

Musk’s ambitious Part Deux master plan was released in 2016 and has yet to be fully accomplished. It comprised four main objectives:

• “Create impressive solar roofs with seamlessly integrated battery storage”
• “Expand EV product line to address all key segments”
• “Through massive fleet learning, develop a self-driving skill that’s 10x safer than manual”
• “Allow your car to make money for you when you’re not using it”.

– CNBC’s Michael Bloom contributed to this report.