You’re here (TSLA) CEO Elon Musk announced his “Master Plan 3” on Wednesday at the electric vehicle giant’s Investor Day. Musk’s ambitious plan calls for a full shift to electric vehicles and $10 trillion in spending to create a “sustainable energy future.” TSLA stock sank Wednesday night as the event made few headlines.
The event, at the Tesla factory in Austin, Texas, began with a keynote presentation from Musk. The CEO presented his plan for the future of energy and throughout the event, Tesla executives touted cost-cutting plans. Tesla has also confirmed the construction of a Mexican manufacturing plant in Monterrey.
The EV company also announced a “Tesla Electric” program to Texas customers this summer. Tesla will offer a retail electricity plan to people who own Tesla vehicles, where customers can get unlimited home charging overnight for $30 per month.
The global electric vehicle giant also reiterated that its long-awaited Cybertruck will arrive in 2023. However, Tesla has not unveiled a next-generation vehicle, saying it will arrive at a “later date”.
Chief Financial Officer Zachary Kirkhorn said Wednesday that as they “look forward” to Tesla’s next-generation vehicle, the company’s goal is to cut costs by 50%. This will lead to a more affordable vehicle, according to Kirkhorn. The CFO added that Tesla was working on “Robo Taxi” variants of the next-generation platform.
“This is a product that we expect to have a significantly lower cost per mile than the world’s best-selling products,” Kirkhorn said.
Tesla has announced that its next generation vehicle will be produced at the Mexico City plant.
Looking ahead to the investor day, analysts predicted that Tesla would reveal a lower-cost EV platform. Tesla has repeatedly teased an electric vehicle that would be around the $25,000 price tag. Kirkhorn, on the fourth quarter earnings call, said 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.
Its “Master Plan 3” includes $10 trillion in capital expenditure to cover the extraction and refining of raw materials as well as the development of storage batteries and vehicles. Musk’s global plan calls for vast energy storage of 240,000 gigawatt hours and sustainable power generation on 0.2% of Earth’s land area.
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“As we improve the energy density of batteries, you’ll see all transportation become all-electric except rockets,” Musk said Wednesday.
His plan is for the power grid to be fully renewable, a total shift to electric vehicles and heat pumps in all homes and businesses. Musk also thinks high-temperature industrial operations need to be electrified, along with cargo and aircraft transportation.
Musk said his vision was achievable and what he was sending was a “message of hope and optimism”.
Tesla’s first master plan, revealed in August 2006, outlined the company’s goal to build a wide range of electric vehicles. Ten years later, Musk revealed his second “Master Plan”. This focused on self-driving capability and battery energy storage systems.
TSLA shares fell 5% after market trading on Wednesday. In regular trading on Wednesday, Tesla stock fell 1.4% to 202.77 in below-average traffic. Tesla stock fell 0.9% to 205.71 on Tuesday, after jumping 5.5% on Monday. Stocks arguably have a cup-handle pattern dating back to early November (or a too-low handle in a base from September). This would suggest a buy point of 217.75.
However, Tesla stock could face possible resistance at its 200-day moving average, currently just above 221.
Tesla stock has doubled from its bear market low of 101.81 on Jan. 6. Much of this reflects Tesla’s investor day buzz. This follows a historical pattern of TSLA actions that precede similar events. In 2016, Tesla stock was up 22% for a month before Musk’s second “master plan” was announced on July 20, 2016.
TSLA shares rank fourth in the IBD automaker industry group. Tesla stock has a composite rating of 73 out of 99. The stock also has a relative strength rating of 27. The EPS rating is 99.
Please follow Kit Norton on Twitter @KitNorton for more coverage.
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