Tesla CEO Elon Musk is pictured attending the start of production at Tesla’s ‘Gigafactory’ in Gruenheide, southeast of Berlin in Germany. on March 22, 2022. Tesla held an investor day on Wednesday. He didn’t reveal a new vehicle, but he did reveal some of his general ideas about climate change.
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Tesla CEO Elon Musk is pictured attending the start of production at Tesla’s ‘Gigafactory’ in Gruenheide, southeast of Berlin in Germany. on March 22, 2022. Tesla held an investor day on Wednesday. He didn’t reveal a new vehicle, but he did reveal some of his general ideas about climate change.
Patrick Pleul/POOL/AFP via Getty Images
The anticipation had been building for days. Tesla was set to unveil a new strategic plan at its Investor Day, only the third time the company has unveiled a “master plan” that would guide its future.
Analysts were eager to see a new Tesla model — specifically, a much cheaper Tesla — one that could make America’s most popular electric vehicle brand accessible to a much wider swath of buyers.
But at its Investor Day on Wednesday, Tesla did not reveal that vehicle.
Elon Musk’s new master plan? End fossil fuels.
Instead of a shiny new car, the company became a big picture of climate change, making the case for an aggressive global transition away from fossil fuels, one with large numbers of electric vehicles and batteries, the basic Tesla products, as key components.
Good for a company that has always touted its green credentials, but Wall Street would have preferred a new car. Tesla shares fell sharply in after-hours trading.
Musk had a lot on his mind about planet Earth
In a way, though, it was vintage Tesla.
Tesla has already radically reshaped the climate conversation, spurring the auto industry to embrace electric vehicles.
The new “master plan” extended beyond the auto sector to talk about decarbonizing the global electricity grid, as well as across industry, shipping and air travel.
Musk opened the event by arguing that the world can quickly turn to renewable energy with the help of batteries (to store solar energy for use at night, for example) and, of course, battery electric vehicles. This new “master plan” also nods to heat pumps and hydrogen for industrial uses.
Many researchers, analysts and non-profit groups have mapped out ways to combat climate change. Most stress that time is running out and that the scale of change needed is daunting.
Musk’s tone was more upbeat. He said Tesla had done the math and the switch would cost $10 trillion, less than the world would spend on fossil fuels over the same time period. Of this, $7 trillion would be for electric vehicles: the market Tesla revolutionized and intends to dominate worldwide.
“Today is not just for Tesla investors, but for anyone who is an investor on Earth,” Musk said. “The Earth can and will transition to sustainable energy, and it will do so in your lifetime.”
A Tesla charging station for electric cars is seen in the parking lot of a shopping center in Puebla, Mexico, on February 26, 2023. Tesla executives discussed new ideas about all facets of their business, including the charge, in its investor day.
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A Tesla charging station for electric cars is seen in the parking lot of a shopping center in Puebla, Mexico, on February 26, 2023. Tesla executives discussed new ideas about all facets of their business, including the charge, in its investor day.
Pedro Pardo/AFP via Getty Images
Bet on innovation, even if there is no big reveal
With no new vehicles to take the stage, Tesla executives and engineers shared insights into how the next generation of vehicles will be designed and built.
The company claims to have a radically reinvented assembly process, which involves making the front and rear of the car separately, which could reduce production costs by 50%. Tesla also says that future vehicles will not require rare earth elements and could incorporate any battery chemistry, making raw materials easier to obtain.
To bolster its reputation as an innovative company, Tesla also bombarded investors with examples of how it has developed new features and cut costs.
Tesla boasted of a software update to automatically adjust the air suspension mid-drive, based on data from other vehicles about where the road is bumpy, and a strategy to cut costs in the Supercharger stations by pre-assembling entire stations and dropping them from a crane, instead. of installing each charger individually on site.
A Tesla Model Y car is displayed at a Tesla showroom in a shopping mall in Beijing, China, April 29, 2022. Tesla shares fell after it failed to reveal a new car on its investor
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A Tesla Model Y car is displayed at a Tesla showroom in a shopping mall in Beijing, China, April 29, 2022. Tesla shares fell after it failed to reveal a new car on its investor
Jade Gao/AFP via Getty Images
An advantage in the race for electrification
The investor day came as investors were feeling more optimistic about Tesla’s future, despite growing competition.
All major automakers now believe zero-emission vehicles are the future of the industry and are scrambling to catch up with Tesla. This means that Tesla’s share of electric vehicle sales is likely to shrink, as competition increases. This was one of the reasons for the precipitous fall in the company’s share prices last year.
But Tesla is producing vehicles at a higher volume than its rivals and has recently cut prices dramatically. This has increased interest in Tesla vehicles and the move was well received by Wall Street.
And Teslas are still popular with drivers. The company just won the top award for “Overall Loyalty” for a brand in the S&P Global Mobility Automotive Loyalty Awards. In general, returning car buyers stick with their previous brand about 50% of the time. For Tesla buyers, a solid two-thirds return to Tesla.
“Tesla had a very, very strong year,” says Vince Palomarez of S&P Global Mobility. “They’ve produced a product that’s attractive to the consumer. … They’ve lowered their price. They also have access to the tax credit again.”
Palomarez also notes that Tesla owners often install a Tesla charger in their home. This could be an additional incentive to stick with the brand, rather than needing to change equipment or use an adapter every time you charge. He compared it to Apple’s proprietary chargers.
“If you’ve got an iPhone and you’ve got an iPad and you’ve got a MacBook, you know, you’re going to get the Apple Watch … the infrastructure is built around it,” he says.
