There is usually a lot of excitement around Tesla’s announcement days, such as Battery Day 2020 and AI Day 2022. There had been considerable anticipation ahead of Investor Day 2023, too, with details expected about Project Highland and the Next Generation Platform. However, while the latter was regularly mentioned in passing, there were no grand presentations. The disappointment meant share prices dropped, wiping $44 billion off Tesla’s valuation. But were investors failing to see the gems amongst the avalanche of information?
This was an unusual event. Not only was it even longer than typical, at over four hours, but Elon Musk was only occasionally evident. Even when he was onstage, he was noticeably more hesitant as a presenter than usual – and he wasn’t Steve Jobs to start with. But what he did present was as bold and (literally) Earth changing as ever. The Master Plan 3 looked well beyond cars, seeing direct electrification as fundamental to decarbonization and able to provide a “clear path to a sustainable Earth with abundance”.
This Plan would require 30TW of renewable energy production globally and 240TWh of storage – which of course would be battery-based, preferably Tesla Megapacks. There would be some use for hydrogen, but not in transportation. Except for rockets, of course, everything would be battery powered, although even here electricity would be used indirectly to manufacture rocket fuel from captured CO2. E-fuels of this nature would also be required initially in aviation and shipping, but Musk reckoned eventually batteries would take over.
Tesla’s plan to save the world, in numbers.
Tesla
Only 0.2% of the world’s land would be needed to supply all the renewable energy required. Heating would come from heat pumps, and although high-density applications such as EVs might require batteries using rare minerals such as cobalt and nickel, static storage could employ Lithium Iron Phosphate (LFP) chemistry, built from minerals that are abundant. Musk argued that a sustainable electrified future was “within reach” and would only require a $10 trillion manufacturing investment – a mere 10% of the 2022 global GDP.
This was a bold and optimistic presentation, but shareholders clearly wanted to see more immediately concrete product-based news. As the presentations rolled on through their many hours, choice tidbits emerged. The Tesla team discussed how the company uniquely designs vehicles around streamlined, automated manufacturing. This has enabled a 40% reduction in factory footprint.
There were hints about the Next Generation Platform. The design would include 75% less silicon carbide, support any battery chemistry, and further manufacturing synergies would enable a 50% reduction in factory footprint. The drive unit would cost around $1,000, and contain no rare earth minerals, unlike the Tesla Model Y’s motor. All the controllers would be designed in house, compared to the mere 20% of the original Model S.
Tesla has simplified its controller architecture over the years, saving wiring harness complexity and shaving 17kg off the cable weight. The low voltage battery has also transitioned to lithium ion instead of lead acid in 2022, so this will last the lifetime of the vehicle not the four years of current 12V units. The big change, not necessarily confined to the Next Gen Platform, will be a switch to 48V, enabling lower currents and thinner wires, further reducing weight. But the Next Gen Platform will also include further controller optimization to reduce weight and complexity, as pioneered in the Cybertruck design.
Other morsels included video footage of recent Optimus humanoid robot designs building each-other (this version previously couldn’t even walk during AI Day last year). From July, Texas Tesla owners would be able to enjoy unlimited overnight charging at home for a flat $30 a month, thanks to renewable energy supply optimization. The dry electrode production system unveiled at Battery Day was shown in full swing, drastically reducing the factory footprint for the 4680 cells using it compared to typical 2170 cell production.
As always, though, you needed to wait for one of the most significant announcements. At Battery Day 2020, the big news was the teasing of the $25,000 Tesla towards the end of the presentation. That has failed to materialize just yet, but there was an announcement hidden at the end of Tesla Investor Day that hinted it is on its way. The Next Generation Platform will be the foundation enabling the $25,000 platform, and just before the Q&A during the interminable four-hour presentation, Elon Musk announced Tesla’s fifth Gigafactory will be in Mexico, near Monterey.
At the top of the slide, it mentioned that this Gigafactory would be “Manufacturing Next Gen Vehicle”. Unfortunately, apart from Musk saying Gigafactory Mexico would involve a $5 billion investment and be the world’s biggest EV manufacturing plant, there were no further details – and no mention of timeframe. But many were expecting the Next Gen Platform to come out of China, so seeing the focus on Mexico instead is reassuring, given the current trend in global politics.
The markets would have been a lot happier had there been more detail about Project Highland, Project Juniper (the equivalent of Highland for the Model Y), and the Next Gen Platform. Although Tesla’s cars continue to sell well, with the four million lifetime production milestone also announced at the Investor Day, a new car is starting to look urgent. But at least, for four hours anyway, Elon Musk was back to what he does best – disrupting the transportation and energy businesses – and not amplifying far right conspiracy theories on Twitter. Let’s hope he can keep this focus for a bit longer. Tesla share prices could really benefit from it.
