Tesla - Moonshot - Sustainable Energy For All of Earth by 2050

Tesla and Elon Musk are always in the news (for good and bad reasons) and a conversation topic amongst business leaders within and outside the automobile arena. And it happened again earlier this March.

In case you might not have heard/read about it already, Tesla had its investor day on the 1st of March. Mind you - it had 169 slides, and the event, which was live-streamed and lasted 4 hours, got almost 1.5 million views within 24 hours - perhaps the most watched investor event for any company, as I know.

And, the ONLY topic for the 4-hour event - TESLA's MASTERPLAN 3.0.

Tesla’s previous two master plans have been mostly hit-or-miss. While the company was able to achieve most of the goals set out in the first plan, which was first published in 2006, the second plan has remained largely unrealized.

That plan, which was posted in 2016 under the cheeky title “Part Deux,” said that Tesla would create a thriving solar business, introduce multiple new vehicles across all major categories, achieve full autonomy, and launch a robotaxi network for vehicle owners to earn up to $30,000 annually. While Tesla has launched its solar roof business, installations have been slow. Some customers have complained of huge price markups. And the company has scaled back its ambitions as revenues remain relatively flat.

Tesla did introduce two new vehicles since publishing its second Master Plan: the Tesla Semi and the Cybertruck. Tesla Semi deliveries began late last year, and the Cybertruck is still planned for this year — according to Tesla lead designer Franz von Holzhausen who was onstage at the event. Musk has said mass production on the bizarrely designed truck would start in 2024.

Meanwhile, Tesla’s plans for fully autonomous vehicles are uncertain. While AV operators like Waymo and Cruise rack up the miles with their fully driverless robotaxis, Tesla has taken a different approach by rolling out a $15,000 option called Full Self-Driving to hundreds of thousands of customers. Despite the misleading name, FSD is just a Level 2 partially autonomous system that requires constant monitoring by the driver. Tesla recently paused new installations of FSD after the National Highway Traffic Safety Administration called it a “crash risk.”

Likewise, Musk’s promise that Tesla owners with FSD would be able to earn passive income by sending their vehicles to autonomously pick up passengers as a robotaxi service has failed to materialize. In recent months, Musk has suggested that Tesla would make a standalone robotaxi vehicle, casting doubt on his original proposal that Teslas on the road today could qualify for such a service.

BUT THAT WAS MASTERPLAN 2.0. Back to the Masterplan 3.0

Tesla's Massive Transformative Purpose (MTP) was clearly in action at the Investor Day event, as Musk had the below to say:

Being a proponent of exponential technologies and exponential organizations, it was fascinating to hear three big data points (besides a few others) during the event, potentially more profound than a typical flashy launch of a next-generation vehicle.

1️⃣ A subtle yet monumental shift in Tesla becoming an "Electricity Retailer" and moving beyond EVs and Solar into Heat Pumps and High-Temperature Heat Delivery by investing $150-175 Bn over the next few years. It certainly is yet another example of Musk's moonshot and BHAG mindset.

The master plan calls for a far bigger scale of thinking and doing - $10 trillion. Yes. Trillions. But, arguably, that's nearly 30% lower than the $14 trillion that will likely get invested in the fossil fuel economy over the next 20 years IF the shift towards sustainable energy doesn't take place on scale.

2️⃣ Continuous cost declines associated with scaling production to the tune of 50% over the next five years.

Firstly, it will produce 100% of the controllers on its next-generation vehicle. Second, it will switch to a 48-volt battery architecture that should reduce power losses by 16-fold. Third, it will use local ethernet-connected controllers to reduce the complexity of the wiring harness. Fourth, transition manufacturing to a parallel assembly process, slashing the manufacturing footprint and wasted time by 40% and 30%, respectively.

3️⃣ Tesla’s fleet currently drives more than 120 million miles per day in total and ~100 million in full self-driving (FSD) with its most advanced driver assistance.

In contrast, Cruise and Waymo each has attained one million miles driven cumulatively with no one behind the wheel on public roads.

While not a perfect comparison, relative to its autonomous driving competition, Tesla vehicles have traveled ~100X the cumulative miles and have collected ~50,000X the data.

It can't be denied that data will be critical in the race to create and scale a fully autonomous network of vehicles. And, Tesla’s vertical integration is bound to give the company an edge that may take its less-integrated competitors, including the larger American and European incumbents years—if ever—to replicate.
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That's the beauty of being exponential - 10x and not 10%.

You are bound to stay ahead of the curve as you invest in the virtuous cycle of non-linear thinking and doing.

Agree / Disagree? Let's get a conversation started.
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p.s. - For those interested in and curious about the Masterplan 3.0, have a look at https://www.tesla.com/ns_videos/Tesla-Master-Plan-Part-3.pdf OR watch the streaming at https://www.youtube.com/watch?v=Hl1zEzVUV7w

#Tesla #ElonMusk #ElectricVehicles #SolarEnergy #AutonomousVehicles #InvestorDay #Masterplan3.0 #EnergyRetailer #HeatPumps #CostReduction #ProductionScaling #AutonomousDriving #DataCollection #VerticalIntegration #Sustainability.