(Bloomberg) — Elon Musk’s much-hyped third Master Plan for Tesla Inc. fell flat with investors after failing to offer any firm detail on the company’s long-awaited next generation of electric cars.
Most Read from Bloomberg
How to Get a Free Flight to Hong Kong in 500,000 Airline Ticket Giveaway
World’s Rich Take Advantage as $1 Trillion Property Market Craters
Lightfoot Is First Chicago Mayor to Lose Reelection in 40 Years
The four-hour presentation was long on Musk’s vision to build the next phase of Tesla’s growth around a sustainable energy future by moving into products like heat pumps, but short on any detail of new vehicles — especially a cheaper EV like the $25,000 model flagged more than two years ago.
While the 51-year-old chief executive officer confirmed a new plant in Monterrey, Mexico will build the next generation of vehicles, he offered no details on timing, saying a “proper product event” will be held later. Lars Moravy, Tesla’s vice-president of vehicle engineering was similarly vague, answering an analyst’s question with only: “We’re gonna go as fast as we can.”
The longer the event went on, the more investors appeared to lose heart. Tesla shares fell as much as 6.8% to $189 in after-hours trading. Before today, the stock had soared from a two-year low it plumbed in early January, adding roughly $310 billion of market value and returning Musk to the top of the Bloomberg Billionaires Index.
Read more: Tesla’s $310 Billion Surge Sets High Bar for Musk’s Master Plan
Musk started the event by outlining his vision for a global switch to electric vehicles, driven by $10 trillion in spending to develop sustainable energy worldwide.
“Earth will move to a sustainable energy economy,” he said. “And it will happen in your lifetime.”
He also took the opportunity to showcase Tesla’s deep bench of executive talent — a riposte to criticism he has neglected the automaker since his $44 billion acquisition of Twitter. At one point he was joined on stage by 16 other executives, several who are largely unknown to investors. For example, Rebecca Tinucci, the head of global charging infrastructure, took to the stage to talk about the company’s Supercharger network and the “Magic Dock” that lets drivers of other EVs charge at Tesla stations.
There was also a strong emphasis on reducing costs. In its own drive for efficiency, the EV maker plans to reduce the footprint of future manufacturing plants by 40%. Chief Financial Officer Zach Kirkhorn vowed to cut production costs in half for Tesla’s next-generation vehicles.
Jessica Caldwell, executive director of insights for Edmunds, said that while the emphasis on cost-cutting was “encouraging,” Musk “failed to put the cherry on top — an actual look at a lower-priced Tesla, if only just conceptually.” That would have been a shrewd move to entice future buyers given the growing range of EVs on offer, while “growing even more investor love for Tesla,” she added.
“Musk’s clear path to a sustainable-energy Earth is admirable, but investors may have preferred if Tesla outlined a clear path toward sustainable profits in a high-growth market,” Caldwell said in an email.
Other Key Takeaways From Tesla’s Investor Day:
Musk confirmed that Tesla will build its next auto plant in Mexico, near Monterrey, but didn’t provide any fresh details except that the next-generation car will be built there.
Drew Baglino, Tesla’s senior vice president of powertrain and energy engineering, confirmed that the company has broken ground on a lithium refining plant in Corpus Christi, Texas.
Musk said AI stresses him out and that there needs to be a regulatory authority to make sure this “quite dangerous technology” is operating in the public interest.
Tesla has now made 4 million cars. It took 12 years to build the first million Teslas, then 18 months to get to 2 million, 11 months to get to 3 million and then seven months to get to the 4 million mark.
Powertrain Engineering leader Colin Campbell said Tesla’s next drive unit will use a permanent magnet motor that doesn’t use rare earths, sparking a plunge in Chinese rare-earth miners’ shares.
One product Tesla could expand to is heat pumps. Musk and Drew Baglino, his senior vice president of powertrain and energy engineering, said heat pumps could dramatically cut home and office-heating costs, calling them one of the low-hanging fruit of the transition to sustainable energy.
The company is also planning to offer unlimited overnight home charging in Texas for $30 a month in a move that echoes the transformation in mobile-phone billing.
Read more: Tesla Taking Page From Mobile Plans With Home Charging for $30
The company also touted its growing ability to get production facilities up and running quickly. It aims to start output at the Corpus Christi lithium refinery within 12 months.
“That’s the target,” Baglino said.
Tesla did say again that the Cybertruck is coming this year, with volume production expected in 2024.
The new corporate vision aims to build upon the US electric vehicle market leader’s growth from a niche player into a mainstream automotive manufacturer. Tesla’s two previous strategic plans were unveiled in 2006 and 2016.
Musk published his first Master Plan more than a decade ago, laying out Tesla’s go-to-market strategy of building an electric sports car, then a series of more affordable cars. The company has executed on that vision with the Roadster, the Model S and then the Model 3 sedan — its cheapest vehicle which starts at around $43,000.
Ten years later, Musk released Master Plan, Part Deux, as Tesla was acquiring SolarCity. Musk served as chairman of the solar-panel installer, which was led by his cousins. That plan talked about solar roofs with battery storage, an expanded vehicle lineup and self-driving technology.
(Updates to adds details on rare earths in Key Takeaways.)
Most Read from Bloomberg Businessweek
Microsoft Expands Game Pass as Regulators Fret Over Activision Deal
Gina Raimondo Becomes China Player in a Job Where Her Predecessor Used to Nap
This Road Could Save the Planet—and Carve Up Alaskan Wilderness
©2023 Bloomberg L.P.