Tesla unveils even more ideas
But CEO Elon Musk’s plans criticized as ‘overly ambitious,’
Watch out, fellow automakers: Elon Musk announced Wednesday night that Tesla Motors, known for pricey electric sedans, hopes to expand into small SUVs, a pickup and even heavy-duty semis and buses in a bid to revolutionize transportation as we know it.
That bombshell was just part of Musk’s long-touted Tesla master plan, a follow-up to one issued when the company was just starting out, outlining a strategy that pivots the company from a builder of niche automobiles to a producer of a broad range of passenger and commercial vehicles that eschew fossil fuel.
Noted in the plan, which Musk published on the company’s website, is the company’s more wellknown pursuit of the consumer solar business through its planned acquisition of SolarCity.
Tesla will “create stunning solar roofs with seamlessly integrated battery storage, expand the electric vehicle product line to address all major segments, develop a self-driving capability that is 10 (times) safer than manual via massive fleet learning, (and) enable your car to make money for you when you aren’t using it,” reads Musk’s “Master Plan, Part Deux.”
Investors were not encouraged as Tesla shares fell 3.4% Thursday, closing at $220.50.
The sheer ambitiousness of Musk’s missive was both typical and controversial.
“If Part One of Elon Musk’s master plan was like putting a man on the moon, Part Two is a lot more like colonizing the galaxy,” said Jessica Caldwell, director of industry analytics for Edmunds.com, She called the plan “overly ambitious for now, especially considering that there are already doubts about whether Tesla can meet its goals for the next two years.”
She noted, however, that Tesla’s goals are different from that of other automakers because of the goal of eliminating the need for fossil fuels.
Autotrader senior analyst Michelle Krebs was more blunt.
“As is typical, Elon Musk has laid out a grandiose plan for the future with no time frames and few specifics and no mention of how and when Tesla will be profitable,” she says. “Tesla’s latest Master includes expanding its electric vehicle product line to cover all major segments when it hasn’t been meeting production targets with the limited product line it has now and in the next couple of years.”
Musk says that to not only succeed as a company but also revolutionize clean transportation, Tesla must expand its product line beyond the forthcoming and lower-priced Model 3 (starting at $35,000 compared to the Model S and roughly twice that price). So look for Tesla’s drawing board to include plans for a compact SUV and a pickup.
In a true departure from the realm of the luxurious Model S sedan, Musk sees a future filled with Tesla-branded, electric-powered cargo trucks and buses.
“In addition to consumer vehicles, there are two other types of electric vehicle needed: heavyduty trucks and high passenger-density urban transport,” he writes. “Both are in the early stages of development at Tesla and should be ready for unveiling next year. We believe the Tesla Semi will deliver a substantial reduction in the cost of cargo transport, while increasing safety and making it really fun to operate.”
Musk also reiterated his commitment to making Teslas — eventually — fully self-driving vehicles that can always be taken over by the driver. This stands in contrast to Google’s plan for its self-driving cars, which will not have a steering wheel or pedals. But that could be a while.
“It is important to emphasize that refinement and validation of the software will take much longer than putting in place the cameras, radar, sonar and computing hardware,” writes Musk, adding worldwide regulatory approval of such tech (not to mention consumer comfort) will require 6 billion miles of on-road testing.
The master plan also makes clear Tesla hopes to become a player in the home solar game. And integral to this goal is Tesla’s recent $2.8 billion bid for SolarCity, the nation’s largest solar energy concern.
The deal is being scrutinized given Musk’s 22% stake in SolarCity and the fact that it is run by his cousin, Lyndon Rive. Musk told The Wall Street Journal on Wednesday that he expects a vote on the acquisition will be approved by more than two-thirds of shareholders.
Tesla shares dropped to $193 when the deal was announced in late June but have since rebounded. Tesla’s market cap is $33 billion, astonishing for a high-end electric vehicle automaker when considering General Motors’ $49 billion market cap.
From Musk’s point of view, Tesla can do for the solar install experience what it did for the electric car: Make it cool.
Clouding the air of Musk’s ambitious vision for Tesla is the first death related to its new Autopilot feature. Federal regulators are investigating the May crash that killed tech enthusiast Joshua Brown, 40, and Musk has tweeted that he is working with suppliers on retooling the feature, which allows Tesla Model S and X vehicles to drive themselves while staying clear of other cars.
Tesla’s response to the crash included a post on its website titled “A Tragic Loss,” which lamented Brown’s death and reiterated the system is meant to be used with driver oversight.