(Bloomberg Opinion) — Elon Musk’s highly publicized third Master Plan for Tesla Inc. fizzled out with investors after failing to offer any firm details on the company’s long-awaited next generation of electric cars.
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The four-hour presentation was long on Musk’s vision of building the next phase of Tesla’s growth around a sustainable energy future by moving to products like heat pumps, but short on any new vehicle details, especially an EV. Cheaper as the $25,000 model marked up more than two years ago.
While the 51-year-old chief executive confirmed that a new plant in Monterrey, Mexico, will build the next generation of vehicles, he offered no details on the timing, saying a “suitable product event” would take place later. Lars Moravy, Tesla’s vice president of vehicle engineering, was similarly vague, responding to an analyst’s question with only, “We’re going to go as fast as we can.”
The longer the event lasted, the more investors seemed to lose heart. Tesla shares fell as much as 6.8% to $189 in after-hours trading. Before today, shares had soared from a two-year low hit 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 raise sets a high bar for Musk’s master plan
Musk kicked off the event by outlining his vision for a global shift to electric vehicles, fueled by $10 trillion in spending to develop sustainable energy around the world.
“Earth will move towards a sustainable energy economy,” he said. “And it will happen in your lifetime.”
He also took the opportunity to showcase Tesla’s great executive talent, a response to criticism that it has neglected the automaker since its $44 billion acquisition of Twitter. At one point he was joined on stage by 16 other executives, several of whom are largely unknown to investors. For example, Rebecca Tinucci, director of global charging infrastructure, took the stage to talk about the company’s Supercharger network and the “Magic Dock” that allows drivers of other electric vehicles to charge at Tesla stations.
There was also a strong emphasis on cost reduction. 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 has promised to halve the production costs of Tesla’s next-generation vehicles.
Jessica Caldwell, Edmunds’ executive director of insights, said that while the emphasis on cost cutting was “encouraging,” Musk “wasn’t able to put the cherry on top: a real look at a lower-priced Tesla, if only conceptually.” It would have been a shrewd move to entice future buyers given the growing range of EVs on offer, while “further increasing investor love for Tesla,” she added.
“Musk’s clear path to a sustainable energy Earth is admirable, but investors might have preferred Tesla to outline a clear path to sustainable profits in a high-growth market,” Caldwell said in an email.
Other Tesla Investor Day highlights:
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Musk confirmed that Tesla will build its next auto plant in Mexico, near Monterrey, but provided no new details except that the next-generation car will be built there.
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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.
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Musk said AI stresses him out and there needs to be a regulatory authority to make sure this “rather dangerous technology” operates in the public interest.
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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.
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Powertrain Engineering leader Colin Campbell said Tesla’s next drive unit will use a permanent magnet motor that does not use rare earths, sending shares of Chinese rare earth miners plunging.
One product that Tesla could expand into is heat pumps. Musk and Drew Baglino, his senior vice president of energy and powertrain engineering, said heat pumps could dramatically reduce home and office heating costs, calling them one of the easier fruits 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 takes the page for $30 home charging mobile plans
The company also touted its growing ability to get production facilities up and running quickly. Its goal is to start production at the Corpus Christi lithium refinery within 12 months.
“That’s the goal,” Baglino said.
Tesla again said the Cybertruck will arrive this year, with volume production expected in 2024.
The new corporate vision aims to harness the growth of the US electric vehicle market leader from a niche player to a mainstream automaker. Tesla’s two previous strategic plans were released in 2006 and 2016.
Musk published his first Master Plan more than a decade ago, outlining Tesla’s go-to-market strategy of building an electric sports car and 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 starting at around $43,000.
Ten years later, Musk launched Master Plan, Part Deux, when Tesla was acquiring SolarCity. Musk served as president of the solar panel installer, which was run by his cousins. That plan spoke of solar roofs with battery storage, an expanded vehicle lineup, and self-driving technology.
(Updates to add details on rare earths in Key Findings.)
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