UPDATE: Click Here to read our reaction to the event.
While bracing for a characteristically extra investor day at Tesla (TSLA) that will include Elon Musk’s “Master Plan Part Three” - the CEO’s blueprints to save humanity while putting a measly few billion bucks (back) in his pocket - I find myself parsing through polarized articles that really want you to know one of two things:
First is the Tesla is still working on previous iterations of the Master Plan series.
Second is some hypebeast-fanboy lingo that can loosely be translated to “rah-rah Tesla!!”
I hope to find the middle here. So, here is a brief look at previous master plans and their outstanding promises, what we know about the next plan, and some of the more grounded (or logical) predictions - since nobody ever really knows what to expect with a Musk-run company.
Master Plan: The Series
The first iteration, “The Secret Tesla Motors Master Plan (just between you and me)”, was all about getting electric vehicles on the road. This came out in 2006 and basically can be summed in this quote that paints a feel-good picture that helps future buyers justify buying an expensive EV: “when someone buys the Tesla Roadster sports car, they are actually helping pay for development of the low-cost family car.”
The second release, Master Plan, Part Deux was released in 2016. This one includes turning the home into a personal power plant to further lower carbon footprints, with solar panels and home batteries.
Musk then details high-passenger vehicles, like buses, and Semi Trucks. Obviously, the Tesla Semi just arrived, so just one unmet promise here and one that is in a scaling phase. Further, they don’t have a vehicle in every major segment of the market, so that can be a partial letdown there too.
Part Deux is also when Autopilot and Full Self Driving enter the discussion. The two points were: “Develop a self-driving capability that is 10X safer than manual via massive fleet learning” and “Enable your car to make money for you when you aren't using it”.
Two more unmet promises? Actually, no. Just one.
Tesla’s using Autopilot drove 6.26 million miles per accident in the third quarter of 2022 compared to a US average of 652,000 miles per accident. In Dan O’Dowd numbers, that's approximately 9 fewer mannequin children run over per 6.26 million miles.
The issue with robotaxis is that it's not up to Tesla, and not even the NHTSA knows what it will take to make the leap at this point.
According to the NHTSA Design Guidance for ADAS systems, “The guidance in this topic does not address transfers between L2 and L3 automation. Insufficient research exists to provide an understanding of what is needed to support transitions between higher automation levels”.
With moving goalposts, Tesla has to get it so right that any changes to the guidelines can’t result in them losing autonomous designation as that seems the more costly outcome than missing out on a timeline that most people thought was overly ambitious to begin with.
Known-Knowns
So what do we know for sure? Well, just a few tweets.
Besides that it will detail “the path to a fully sustainable energy future for Earth,” it will also have updates from other Musk ventures like SpaceX and The Boring Company. Musk said that the parts pertaining to Tesla will be related to scale and AI.
Yea, that's pretty much what we know.
Unknown-Unknowns
So what are we speculating? Well, people are all over the place.
There is an extensive Twitter thread by Pierre Ferragu where he details his team’s research on what they expect the $25,000 Tesla, nicknamed “Model 2” to look like. Ferragu suggests, after the teardown of seven cars, that the affordable Tesla will be 15% shorter, 30% lighter, with a 25% smaller battery. The cost of goods sold, they predict, will be in the range of $21,600 - leaving healthy margins.
Unless this is like, very ready to go now, I think Tesla investors should be slightly worried about this. The Osbourne Effect is a term used to describe the unwanted consequence that a product launch can have on existing lineups. If Tesla said “this is Model 2, it will be ready to buy in one-year, go nuts, pre-order that” (or anything similar to the CyberTruck launch), then a lot of people are going to be canceling their Model 3 orders and waiting. Effectively cannibalizing existing sales for something that isn’t guaranteed in the (near) future.
On the topic of scale, I think Tesla’s gigapress will get some time to shine. The ability to create the entire body in one part limits weak points, creating a safer ride while streamlining manufacturing. It eliminates the need for hundreds of robots and parts while reducing occupied space in factories.
The Optimus humanoid robot and their AI Dojo supercomputer both could fit in here, especially following Musk apparently finding a new shiny object - a rival to “woke” ChatGPT.
I get that Musk is a me-centric free speech absolutist, who has banned a lot of his critics including journalists he doesn’t like from Twitter. But he also is the guy who says the government needs to proactively regulate AI - so it's an odd turn to suddenly want fewer guardrails. Especially if you are the paranoid, sci-fi type that thinks AI will subtly manipulate the human species into extinction by saying the right things to the right people.
Like, objectively speaking, fewer words means less chance of that, no?
