Tesla CEO Elon Musk’s presentation did not excite investors as he did not offer further details related to the upcoming next-generation electric car models that are supposed to fuel the company’s next stage of growth.
For four hours Musk and his executives made efforts to explain the benefits of their electric cars. They made calculations and projections on the required sustainable energy transition and, yes, a great boast about the efficiency of the new ones in terms of manufacturing and engineering.
However, neither Musk nor the Tesla executives with him spoke about cheaper electric vehicle models that may be within the reach of the majority. So that the Tesla Investor Day 2023 ended without any information on the expected news of the day.
New Tesla plant in Mexico
It only confirmed the construction of a new Tesla plant in Monterrey, Mexico. This was the most important announcement of the day. It has not yet been specified when Tesla plans to open the new automotive plant. But it was announced that the next generation car will be manufactured on Mexican soil.
Tesla’s announcement comes after a Chinese state newspaper this week warned Musk that things could turn sour for him in China. The threat was the Chinese government’s response to Musk’s retweet of the US Department of Energy’s assessment that Covid-19 emerged from a wuhan laboratory.
The CEO said Tesla will build its next-generation vehicle in Mexico. To do this, the company plans to hold a grand opening, although it has not yet said what date it plans to do so.
“I’d love to really show you what I mean and present the next-generation car, but you’ll have to trust me until a later date,” Tesla chief designer Franz von Holzhausen said during the Tesla-based company’s meeting. Austin,Texas.
“We will always be delivering exciting, compelling and desirable vehicles, as we always have,” added the executive.
As a result of the meeting, during the premarket on Thursday Tesla shares plunged 5.7% in New York. Although the anticipation of the event caused the company’s shares to increase by more than 300 billion dollars in market value in two months.
When asked when the electric car manufacturer will exhibit its new prototype to observe its size, content and performance, Musk limited himself to saying that Tesla will hold a “proper product event” for this without specifying the time.
Tesla’s vice president of vehicle engineering, Lars Moravy, promised that the company will go “as fast as we can.” And he added that he expects the prototype “to be a high-volume product.”
Key points addressed in the meeting
The most important thing about the meeting on the occasion of Tesla Investor Day could be summed up like this:
- Construction of a lithium refining plant in Corpus Christi, Texas.
- According to Musk, artificial intelligence stresses him a lot, which is why he pointed out that it is necessary to create a regulatory authority to ensure that this “quite dangerous technology” does not violate the public interest.
- Tesla reached a total of 4 million recently manufactured cars. Reaching the first million took him 12 years, but in just 36 months he manufactured the other 3 million. With a substantial and progressive reduction in manufacturing time.
- The carmaker will replace rare earths with a magnet motor in Tesla’s next transmission unit, vice president of powertrain engineering Colin Campbell has revealed.
Following the latter announcement, immediately the shares of mining companies that extract rare earths fell. Tesla recently delivered semi trucks to its first customer and plans to start producing the Cybertruck this year.
“Towards a sustainable energy economy”
At the opening of the event, the 51-year-old Musk made a series of arguments about how it will be possible to substitute fossil fuels in the future. From feeding a network with wind and solar energy to the use of heat pumps.
He noted that Tesla will be able to manufacture these heat pumps for homes at any time. Likewise, the company plans to offer home power charging in Texas overnight for as little as $30 a month.
He predicted that “Earth will move toward a sustainable energy economy. And it will happen during your lifetime, ”she added.
To give an image of unity around his management at Tesla, Elon Musk appeared accompanied by the company’s executives. In this way, he responded to the criticism that arose after the controversial acquisition of Twitter for 44,000 million dollars.
A total of 16 Tesla executives joined Musk on stage, after the long presentation made during the meeting. Several of them had not appeared in public before with him at previous events.
Focus towards cost reduction
Invited investors heard from Tom Zhu, who oversaw Tesla’s Shanghai factory. The plant is now considered the most productive in the world.
Likewise, the director of global charging infrastructure, Rebecca Tinucci, intervened. She presented the “Magic Dock” function that allows drivers of different brands of electric vehicles to use Tesla stations.
The exhibits placed great emphasis on the company’s cost reduction this year. Likewise, Tesla’s efforts to reduce the carbon footprint by more than 40% in future sites where the company manufactures its cars.
For his part, Zach Kirkhorn, the company’s chief financial officer, said that Tesla’s goal is to halve the production costs of its next-generation cars.
“The company-wide emphasis on cost reduction was not surprising but encouraging,” said Jessica Caldwell, executive director of insights for automotive market researcher Edmunds.
“But Musk and company failed to put the icing on the cake: a real look at a lower-priced Tesla, if only conceptually,” he said.
Tesla’s first master plan was published by Musk in 2006. There he laid out the company’s strategy for building an electric sports car. He also mentioned that he would build a series of models that would become progressively cheaper and more affordable. So it was with the Roadster models, Model S and X, and the Model 3 and Y.
But for the next decade, Musk launched the “Master Plan, Part Deux” at the time the company absorbed SolarCity, provider of energy services for homes, businesses and government non-profit organizations.
Despite recent monumental losses, Tesla is still considered the first electric car automaker. While its competitors lose billions of dollars, Tesla takes a more realistic and efficient approach.
The company is doing what every business should do, selling its products at a profit. That is, above the cost of production. The mistake of selling below production cost is being made by rivals like Lucid Group Inc or Rivian Automotive Inc with some of their models.
