Tesla Shares Drop on Investor Day Limited Details; Musk outlines $10 trillion ‘Master Plan 3’

Tesla (TSLA) fell Thursday after the global EV giant’s investor day event yielded scant details on new products. Meanwhile, CEO Elon Musk announced an ambitious “Master Plan 3” with calls for a total switch to EVs and $10 trillion in spending to create a “sustainable energy future.”


The event, at Tesla’s factory in Austin, Texas, kicked off with a keynote presentation from Musk. The CEO outlined his plan for the future of energy, and Tesla executives praised cost-cutting plans at the event. Tesla also confirmed that it is building a factory in Mexico in Monterrey.

The EV company also announced a “Tesla Electric” program for customers in Texas this summer. Tesla offers a $30 per month electricity plan for owners of Tesla vehicles for unlimited overnight charging at home.

The global EV giant also reiterated that the highly anticipated Cybertruck is coming in 2023. However, Tesla has not unveiled a next-generation vehicle, saying that would come at a “later date”.

CFO Zachary Kirkhorn said Wednesday that as they “look forward” to Tesla’s next-generation vehicle, the company’s goal is to reduce costs by 50%. This will lead to a more affordable vehicle, according to Kirkhorn. The CFO added that Tesla is working on “Robo Taxi” variants of its next-generation platform.

“This is a product that we expect to have a significantly lower cost per mile than the top selling products in the world,” Kirkhorn said.

Tesla added that the next generation of vehicles will be produced at its New Mexico plant.

Leading up to Investor Day, analysts predicted that Tesla would unveil a cheaper EV platform. Tesla has repeatedly teased an EV that would sit around $25,000. Kirkhorn said on the Q4 earnings call that the “next generation vehicle platform” was a priority.

Tesla Investor Day and Master Plan number 3

Elon Musk presented a broad plan for a “sustainable future” on Wednesday. His “Master Plan 3” includes $10 trillion in capital expenditures for mining and refining of raw materials, along with storage and vehicle battery development. Musk’s global plan calls for massive energy storage of 240,000 gigawatt hours and renewable energy production on 0.2% of the Earth’s land area.

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“As we improve the energy density of batteries, you will see all transportation going all-electric with the exception of rockets,” Musk said Wednesday.

His goal is for the electricity grid to become fully renewable, a total switch to electric cars and heat pumps in all homes and businesses. Musk also believes that high-temperature industrial operations should be electrified, as should shipping fleets and aircraft.

Musk said his vision is achievable and it is a “message of hope and optimism.”

Tesla’s first Master Plan, unveiled in August 2006, presented the company’s goal to build a broad range of electric cars. Ten years later, Musk unveiled his second “Master Plan.” That focused on self-driving power and battery energy storage systems.

Stock performance

TSLA shares fell 7% to 188.70 in premarket trading on Thursday. During regular trading on Wednesday, Tesla shares fell 1.4% to 202.77 amid lower-than-average traffic. Tesla shares fell 0.9% to 205.71 on Tuesday, after rising 5.5% on Monday. Stocks arguably have a cup-and-handle pattern dating back to early November (or too low a handle in a base from September). That would suggest a buy point of 217.75.

However, Tesla stock could see potential resistance at its 200-day moving average, currently just above 221.

Prior to the Tesla event, TSLA shares had doubled from bear market lows of 0f 101.81 on January 6. This followed a historical pattern of TSLA stock anticipating similar events. In 2016, Tesla stock advanced 22% for a month on Musk’s second “Master Plan” announcement on July 20, 2016.

TSLA ranks fourth in IBD’s Automakers industry group. Tesla stock has a 73 Composite Rating of 99. The stock also has a 27 Relative Strength Rating. The EPS score is 99.

Follow Kit Norton on Twitter @KitNorton for more coverage.


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