(Bloomberg) — Elon Musk’s much-hyped third Master Plan for Tesla Inc. fell flat with investors after it failed to provide concrete details about the company’s long-awaited next-generation electric cars.
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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 to products like heat pumps, but fell short on every detail of new vehicles — especially a lower-cost EV like the $25,000 model marked more than two years ago.
While the 51-year-old CEO confirmed that a new plant in Monterrey, Mexico will build the next generation of vehicles, he did not provide details on timing, saying a “good product event” will be held later. Lars Moravy, Tesla’s vice president of vehicle engineering was equally vague, answering an analyst’s question with only, “We’re going 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, the stock had risen from the two-year low it hit in early January, rising about $310 billion in market value and putting Musk back at the top of the Bloomberg Billionaires Index.
Read more: Tesla’s $310 billion increase raises the bar for Musk’s master plan
Musk kicked off the event by outlining his vision for a global switch to electric vehicles, driven by $10 trillion in spending to develop renewable energy worldwide.
“The Earth will transition to a renewable energy economy,” he said. “And it will happen in your lifetime.”
He also took the opportunity to highlight Tesla’s deep bank of executive talent — a response to criticism that he has neglected the automaker since its $44 billion acquisition of Twitter. At one point, he was joined onstage by 16 other executives, several of whom were largely unknown to investors. For example, Rebecca Tinucci, the head of global charging infrastructure, took the stage to talk about the company’s Supercharger network and the “Magic Dock” that allows drivers of other EVs to charge at Tesla stations.
There was also a strong focus on cost reduction. In its own drive for efficiency, the EV maker plans to reduce the footprint of future factories by 40%. Chief Financial Officer Zach Kirkhorn promised to cut production costs for Tesla’s next-generation vehicles in half.
Jessica Caldwell, executive director of insights for Edmunds, said that while the emphasis on cost-cutting was “encouraging,” Musk “failed to put the icing on the cake — an actual look at a lower-cost Tesla, if only conceptually.” ” That would have been a smart move to entice prospective buyers given the growing electric car offering, while “creating even more investor love for Tesla,” she added.
“Musk’s clear path to a sustainable energy Earth is admirable, but investors may have preferred Tesla to outline a clear path to sustainable gains in a fast-growing market,” Caldwell said in an email.
Other key takeaways from Tesla’s Investor Day:
Musk confirmed that Tesla will build its next car plant in Mexico, near Monterrey, but gave no new details other than 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 pioneered a lithium refinery in Corpus Christi, Texas.
Musk said AI is stressing him out and there needs to be a regulatory body to make sure this “quite dangerous technology” works 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 4 million.
Colin Campbell, chief of Powertrain Engineering, said Tesla’s next power unit will use a permanent magnet motor that does not use any rare earths, causing a plunge in the shares of Chinese rare earth miners.
One product that Tesla could expand into is heat pumps. Musk and Drew Baglino, his senior vice president of powertrain and power engineering, said heat pumps can dramatically reduce heating costs for homes and offices, calling them one of the low-hanging fruits of the renewable energy transition.
The company also plans to offer unlimited overnight home charging for $30 per month in Texas, a move that reflects the transformation in cell phone billing.
Read more: Tesla takes page of mobile plans with home charging for $30
The company also praised its growing ability to get production facilities up and running quickly. The goal is to start production at Corpus Christi’s lithium refinery within 12 months.
“That’s the goal,” 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 on the growth of the US electric vehicle market leader from a niche player to a mainstream automaker. Tesla’s two previous strategic plans were unveiled in 2006 and 2016.
Musk published his first Master Plan more than a decade ago, outlining Tesla’s go-to-market strategy to build an electric sports car and then a line of more affordable cars. The company executed that vision with the Roadster, the Model S, and then the Model 3 sedan — the cheapest vehicle that starts at about $43,000.
Ten years later, Musk released Master Plan, Part Deux, when Tesla acquired SolarCity. Musk was president of the solar panel installer, which was run by his cousins. That plan spoke of solar roofs with battery storage, an expanded vehicle range and self-driving technology.
(Updates to add rare earth details in Key Takeaways.)
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