Market Insight - Tesla Investor Day 2023
Key takeaways from Tesla’s investor day on March 1, 2023. Covering their Master Plan lll, Giga- Mexico, New Gen Vehicle, Platform, and many more.
Tesla held its first-ever Investor Day event on March 1st at the Austin, Texas-based Gigafactory. Tesla’s CEO, Elon Musk, revealed the third part of his “Master Plan,” which outlined ways in which Tesla will decrease its manufacturing costs, grow to an “extreme size” level, and achieve sustainability in the long run.
Tesla has been buffeted by questions around demand, price, and management — especially following Musk’s disastrous acquisition of Twitter. Despite steep stock declines in 2022, the company appears to be on a more solid footing now. Tesla slashed the prices for its popular Model 3 and Model Y by as much as 20 percent, making them more appealing to customers.
Future generations of Tesla cars will have half the cost of the current Model 3 or Model Y., according to Chief Engineer Lars Moravy. Musk was expected to unveil a small, affordable electric vehicle that would broaden his brand’s appeal and fend off competition. When it comes to manufacturing EVs at a profit, Tesla already has a significant advantage over its rivals.
Watch Tesla Investor Day 2023.
The Key Take-aways of Tesla Investor Day 2023
- Announced Giga Mexico
- Presented Master Plan lll
- Provided info on Gen lll vehicle/platform
- Teased 2 new energy products
- Lots of info regarding efficiency, engineering & future investments
- Introduced to Tom Zhu – Tesla’s new global production chief
Lithium plant in Corpus Christi
Tesla had broke ground with new lithium plant in Corpus Christi, texas. Drew Baglino, SVP of Powertrain and Energy Engineering at Tesla confirmed this. He added, “This is a good example of something where we’re basically talking about breaking ground and starting commissioning within 10 months and with actual production within 12 months”.
President Andrés Manuel López Obrador announced the news on February 28, 2023, but Musk reiterated it without sharing any additional details.
“We’re excited to announce that the next Tesla Giga-factory will be in Mexico near Monterey,” Musk said. “We do want to emphasize we will continue to expand production at all of our existing factories, including California, Nevada, here in Texas, and Shanghai, so we intend to increase production at all factories. So the Giga Mexico would be supplemental to the output of all the other factories.”
Mexico will be its third plant outside the United States after opening in China and Germany.
As part of Tesla’s sustainability initiative, it agreed to use recycled water and took other measures to deal with water scarcity in its region.
New Gen Vehicle. (Gen lll vehicle/platform)
Tesla showed two veiled vehicles during the presentation, hinting that its next generation will be built on a completely new platform. A big part of that design is building in a way that relies on automation to scale faster and cheaper. According to Drew Baglino, next-gen design may also be used on the Cybertruck.
Apart from that, neither Baglino, Musk nor Franz von Holzhausen gave additional details on next-generation vehicles.
Next Powertrain factory
Tesla’s next powertrain factory will be 50% smaller than the one in Austin, Texas, but will still have the same capacity. Additionally, 75% less silicon carbide will be used without compromising performance or efficiency. Collin Campbell highlighted that the new powertrain will be compatible with any battery chemistry, giving Tesla greater flexibility in sourcing batteries.
Another part of Tesla’s Master Plan Part 3 is to switch home, business, and industrial heating to heat pumps. Most of that portion of the presentation focused on how heat pumps could help alleviate the problems associated with traditional heating systems. Musk said at some point Tesla might consider building heat pumps for the home to help solve this problem. Tesla already produces heat pumps for its cars, so expanding into homes wouldn’t be too far fetched.
“There is a clear path to a sustainable-energy Earth. It doesn’t require destroying natural habitats. It doesn’t require us to be austere and stop using electricity and be in the cold or anything”. – Elon Musk
Charging and energy storage
Tesla has finally released Magic Dock, an upgrade to Tesla’s charging stations, which enables other electric vehicle brands to use the charging stations as well, with the first 10 US Supercharger sites opening Tuesday to non-Tesla vehicles. Apart from the Supercharger network, company executives said they were also focused on developing charging infrastructure in commercial parking lots in addition to the Supercharger network.
Select Superchargers in the US are now open to other EVs → https://t.co/zObpFM4li1 pic.twitter.com/wQW0KGvlpw— Tesla Charging (@TeslaCharging) February 28, 2023
Additional takeaway points
- New vehicle charger that is more configurable via the Tesla mobile app, allows for wireless induction charging and is vital for robotaxi / non-touch.
- Software is key with as much as 33% of all service requests intelligently determining the part that is needed with a high degree of confidence, and the use of the software is now a key part of the production process to improve quality assurance.
- Cybertruck launches this year. On Investor Day, we witnessed a new bumper camera, a new round Yoke/steering wheel, a rear display (like Model S), a new center console, and more.
- Hinting at Tesla’s second business model– Van which currently makes up 83% of their commercial space. In addition to the Semi, this allows Tesla to solely employ their own vehicles.
- Residents of Texas will now have access to $30/m unlimited overnight home vehicle charging via Tesla Energy through this new service. I believe that this is only the beginning and it will further expand once the Master Plan III be fully realized in the coming years as it is implemented.
- Coverage of 123M+ miles driven per day and 1.9M charging sessions recorded, on average, daily. As a result of these improvements and others, supercharger costs have dropped by 15% and installations can be completed within a week. It will allow the Supercharging network to grow rapidly.
“The Musk and Tesla vision was outlined at investor day around the scale and cost efficiencies for the next decade. The foundation is there for the next level of EV growth in the TSLA story.” tweeted by Dan Ives. Wall Street’s Tech Advisor.
Investor Reaction to TSLA
The whole 4 hours message delivered by Tesla CEO and exes on the Investor Day on how the company would be the driver of a global shift to clean energy. However, it didn’t sit right with investors’ minds as at least those who are active after the market closed weren’t impressed with its lack of big product announcements, such as specific details on the so-called master plan 3 or Musk’s signature “one more thing” line.
It resulted in the fall of Tesla share prices of 5.66% in after-hours trading.
Ross Gerber, a high-profile Tesla investor, also tweeted about the need for additional information.
It resulted in the fall of Tesla share prices of 5.66% in after-hours trading.
Sadly there was no presentation on tesla marketing and customer experience. They need this so bad. $tsla #tesla— Ross Gerber (@GerberKawasaki) March 2, 2023
Nevertheless, the big number is there for grabs. Tesla announces its plan of making 20M EVs a year by 2030. It is not a new goal for them. Along with a presentation on how they would reach that goal with the capability of everything – from manufacturing and raw materials to design, charging, and batteries. In addition to the existing portfolio, the Model S, Model X, Model Y, and Model 3 — as well as the Tesla Semi and the Cybertruck, and two veiled vehicles.
Let’s take a bit of a reality check, Tesla produced 1.369M and delivered 1.313M in 2022 which means they need to increase its production and sales by almost 15 to reach the number. It is definitely not impossible by looking at the increase in gas prices in Europe and the shortage of petroleum products could decrease the ability to make gasoline which might boost the need and want for EV products.
“As long as you offer a product with value at an affordable price you don’t have to worry about demand. We try everything to cut costs and pass down that value to our customers,” said Tom Zhu, Tesla’s new global production chief who previously had run Tesla’s China and APAC businesses for years.
The key takeaways/market update is a series by AxeHedge, which serves as an initiative to bring compact and informative In/Visible Talks recaps/takeaways on leading brands and investment events happening around the globe.
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