Electric vehicle maker Tesla hosted a 2023 investor day presentation in Austin, Texas, on Wednesday. CEO Elon Musk took the stage to share his “Master Plan 3” and discuss how Tesla plans to grow in the face of increasing competition.
The presentation was long on vision and included a review of past achievements, but short on details about any new Tesla products or services.
Near the start of the presentation, Musk said, “There is a clear path to a sustainable-energy Earth. It does not require destruction of natural habitats. It doesn’t require us to be strict and stop using electricity and be in the cold or whatever.” He added, “In fact, you could support a civilization much larger than Earth, much larger than 8 billion people could actually sustainably support on Earth.”
Musk was initially joined on stage by Drew Baglino, senior vice president of engines and power engineering at Tesla. They discussed a future in which the company would play a role in “re-fueling the grid with renewable fuels” as they ramp up battery production, both for Tesla’s electric vehicles and the company’s utility-scale energy storage systems.
Tesla aims to produce 20 million electric vehicles a year by 2030, executives reiterated. The company reported full-year deliveries of about 1.31 million vehicles in 2022.
During a question-and-answer session after the three-hour presentation, executives fielded a question about how Tesla could increase its market share in China.
Elon Musk put the question to Tom Zhu, who has been leading global manufacturing and running China and APAC operations for Tesla for years. “As long as you offer a product with value at an affordable price, you don’t have to worry about demand,” Zhu said. “We’re trying everything to reduce costs,” he added, “and pass that value on to our customers.”
Musk then added: “Demand is a function of affordability, not desire.” He said: “Even small changes in price have a big effect on demand.”
Zhu also announced that as of Wednesday, Tesla had produced 4 million cars in total.
“It took us 12 years to make the first million and about 18 months for the second million. The third million, 11 months. Then less than seven months to build 4 million,” Zhu said, highlighting the company’s improved operational efficiency.
He said Tesla plans to build new car and battery factories and also produce more cars annually at its existing factories.
Tesla’s head of charging, Rebecca Tinucci, said that by 2022 the company would provide 9 terawatt hours across all charging methods, including home charging, including 40,000 Superchargers. (For comparison, the entire U.S. consumes about 4,000 terawatt hours of electricity annually.) Tinucci also noted that about half of the company’s superchargers in the EU are open to other vehicles, and that the company just opened 10 superchargers in the U.S. to non-Teslas.
Tesla design chief Franz von Holzhausen and the company’s vice president of vehicle engineering Lars Moravy took the stage to demonstrate a number of planned manufacturing changes aimed at improving the efficiency of Tesla vehicle production. But von Holzhausen said Tesla would not yet reveal its “next-generation” vehicle.
The company’s vice president of powertrains, Colin Campbell, said Tesla’s next engine plant will be 50 percent smaller than the one in Austin, but have the same capacity. He also said the company is working on a new kind of drive unit that is compatible with any type of battery cell and an engine that will be made without rare earth metals.
Ahead of the 2023 investor day, in a press conference on Tuesday, Mexican President Andres Manuel Lopez Obrador said Tesla has agreed to build a large factory in Monterrey, Mexico. He said the company has agreed to use recycled water and undertake other initiatives to address water scarcity in the region.
Musk confirmed plans for the factory on Wednesday and said production there would complement, rather than replace, any production at other Tesla facilities.
Tesla shares have rebounded from a slump during 2022 and are up more than 60% for the year so far. However, the stock fell 1.43% on Wednesday before the event and 5% after hours.
On Thursday morning, Tesla shares fell further, down 8% in premarket trading.
Analysts at Mizuho Securities maintained a buy rating on Tesla shares ahead of the investor day, seeing the company as a leader in a growing market for all-electric vehicles. They wrote in a note earlier this week, “In the near term, we see continued strength in TSLA’s market share, but we see cheaper competing electric vehicles coming to market as potentially dilutive to TSLA’s share of the US electric vehicle market.”
Currently, the lowest-priced Tesla available is the Model 3 sedan, which starts at about $43,000, they wrote. Seven models from other automakers are currently priced below that, Mizhuo noted.
Musk’s ambitious “Master Plan, Part Deux” was published in 2016 and has not been fully fulfilled. It included four main objectives:
- “Create amazing solar roofs with seamlessly integrated battery storage”
- “Extending the Electric Vehicle Product Line to Cover All Major Segments”
- “Develop a self-driving capability that’s 10x safer than manual through massive fleet learning”
- “Let your car earn money for you when you’re not using it”
Michael Bloom, CNBC contributed.