A new master plan by Elon Musk doesn’t include any new cars

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The global auto industry has been dealing with parts supply problems that have slowed production of all sorts of vehicles. But a number of electric models have also proven to be popular beyond what their manufacturers were prepared for.

The new competition made Musk’s recent reputation as town crier for the red pills online especially puzzling, as his car company was perilous. The brand of the company is already being damaged by Musk’s chaotic tenure as the chief executive of the social network, during which he promoted far-right ideas about journalism and public health. The Wall Street Journal reported last month on a survey by Morning Consult showing that perceptions of Tesla have been falling steadily since May, shortly after Musk began his bid for Twitter; between October and November, the period when Musk took ownership of Twitter, sentiment among Democrats toward Tesla plummeted, while favorability among Republicans rose slightly.

The Kelley Blue Book reported that electric vehicles accounted for 5.6% of new vehicles sold last year. As recently as 2019, the figure was just 1.4%, but that sounds like a lot. Based on the experience in other global markets – particularly Norway – 5% market share seems to be an important tipping point for wider adoption, said BloombergNEF researcher Corey Cantor. Europe and China have the same trends, according to data provided by BloombergNEF. Bloomberg includes plug-in hybrids in its count of “electric vehicles,” but a large majority are purely battery-powered models.

In the first half of 2022, 13 percent of worldwide passenger vehicle sales were battery electric, plug-in hybrids, or fuel cell vehicles, according to data from BloombergNEF. Germany, the UK, and China are leading the way in terms of growth. Only 7 percent of the passenger vehicles sold in the US in the first half of the year were zero-emission.

Cox automotive, a company that owns a number of auto-related websites and firms, said that it is not your eyes tricking you. “For the longest time, the majority of the EVs on the road were Teslas, and they still get the lion’s share of sales, but they’re now hardly the only game in town.”

It’s not clear who is to blame for the 5% mark being the point where EV sales really take off. It could be that it marks the level at which something begins to seem normal. Buying a vehicle from a company that has a market share similar to that of electric cars doesn’t seem weird or unusual, according to Cox automotive. It’s getting to be the same for electric vehicles: It’s no longer uncommon to see them on the roads which makes it easier to consider getting one.

The Mustang Mach-E, which hit the market in in 2021, was the first electric vehicle to take a notable chunk of Tesla’s still-dominant EV market share. Ford is not able to make enough to meet demand. Every one of the more than 150,000 Mach-Es that Ford has produced so far was built for a specific customer order, with none being made just to fill dealer lots, said Darren Palmer, Ford’s vice president of electric vehicle programs.

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“We could sell it out at least two or three times over,” he said. “We have held back from launching more global markets because we’re completely sold out.”

In 2019, there were 11 EV models selling more than 1,000 units, according to Kelley Blue Book. There were 26 this year. Hyundai and Kia, which already had EVs on the market – albeit not terribly exciting ones – came out with the radically designed Hyundai Ioniq 5 and the Kia EV6. Rivian rolled out the R1T truck and R1S SUV. There was a rush on Bolt EV and Bolt EUV when they were back in the market. Luxury brands like Audi, BMW, Mercedes, Genesis and Volvo have also added EVs to the market.

Tony Quiroga, editor in chief of Car and Driver, said less expensive electric vehicles are getting better with longer driving ranges. The Ioniq 5, which has a starting price around $41,000, was given the award for Car and Driver’s Electric Vehicle of the Year.

Take gas prices, for example. The spike in costs to fuel up at the pump earlier this year “drove people to to become aware of the [electric] vehicles even if they weren’t thinking about them before,” said Jessica Caldwell, an industry analyst with Edmunds.com.

But gas prices have also fallen significantly in recent months, which could reduce the urgency some drivers feel to make the switch to electric in 2023.

The impact of the Inflation Reduction Act is also still unclear. The act, passed this year, changes the rules around which electric vehicles are eligible for consumer tax credits. It places limits on the price of the vehicle and on the income of buyer; there are also requirements designed to promote domestic production of electric vehicles and their batteries.

He said if a Chevy Bolt, Model Y, and a Ford Mach-E all qualify, that would be a high volume vehicle.

Another reason Tesla’s stock is sinking: The US economy could tip into recession next year, hurting car sales. Musk said on a Twitter Spaces call two weeks ago that he foresees the economy will be in a “serious recession” in 2023.

Morgan Stanley still thinks the company is worth more than its recent losses because of the head start it had over the electric car competition and because of potential tax advantages due to the Inflation Reduction Act passed earlier this year.

Elon Musk’s fate reveals a pathological problem with the truth: Tesla vs. Tesla, the Billionaires Index and Bloomberg

The losses have made a difference to one of the world’s richest people. According to the Bloomberg Billionaires Index, CEO Elon Musk is now worth $132 billion — less than half what he was worth at the beginning of the year. Two weeks ago, he lost his title as the world’s richest person to Bernard Arnault.

“I think there is going to be some macro drama that’s higher than people currently think,” he said, according to Reuters, adding that homes and cars will get “disproportionately impacted” by economic conditions.

The target of 50% sales growth helped drive that valuation. In October it was admitted that it won’t meet the sales target.

“It got ahead of itself in the near-term,” said Gene Munster, aTesla fan. I believe this can be a bigger company. It will see those kinds of numbers again. But it could take a long, long time to get there.”

The stock’s climb to dizzying heights – rising 743% in 2020 alone – was driven by Musk’s reputation as a genius who would disrupt the massive global auto industry.

After several delays, and more than three years since its initial announcement, Musk says deliveries of the Cybertruck will start this summer — though he alluded that volume production will probably still happen next year. In the meantime, people are moving on to electric pickup trucks that are actually on the road, including the Rivian R1T and Ford’s F-150 Lightning. The Chevy Silverado EV is likely to reach customers before the Cybertruck.

“Elon Musk has a pathological problem with the truth,” said Gordon Johnson, one of the largest critics of Tesla among analysts. He never lives up to the promises he makes, which is what people say he is a genius and innovator.

The most productive and profitable plant for the company is its factory in Shanghai, China, which employs over 20,000 workers.

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He stated that demand in the US has collapsed. “Two months ago, your wait time was two or three months. You can get one right away. They’re going to make more cars than they sell in the third quarter. It is defined as excess capacity.

Investors have been disappointed that Musk appears to be paying for so much of his $44 billion purchase of Twitter by selling Tesla stock. Musk, Tesla’s largest shareholder, has sold $23 billion worth of Tesla shares since his interest in Twitter became public in April.

Musk has been saying that he is done selling stock. Investors want to see him walk the walk and not just talk the talk,” said Ives.

Tesla said it delivered 1.25 million of its less-expensive Model 3 and Model Y electric cars, and nearly 67,000 of its higher-end Model X and Model X lines.

Many said they had believed that prices Tesla charged for its cars late last year would not be cut as abruptly or as deeply as the automaker just announced in a move to spur sales and support production at its Shanghai plant. Many finalized purchases due to the scheduled end of a government subsidy.

Tesla thanked customers and employees for helping the company “achieve a great 2022 in light of significant Covid and supply chain related challenges throughout the year,” according to a statement released on Monday.

“We continued to transition towards a more even regional mix of vehicle builds which again led to a further increase in cars in transit at the end of the quarter,” the statement read.

Videos posted on social media showed crowds at Tesla stores and delivery centers in other Chinese cities from Chengdu to Shenzhen, suggesting wider consumer backlash.

Analysts have said Tesla’s move was likely to boost its sales, which tumbled in December, and force other EV makers to cut prices too at a time of faltering demand in the world’s largest market for battery-powered cars.

A protest was staged at the company’s delivery center in Minhang suburb on Saturday, which was claimed to be a normal business practice.

He and the other Tesla owners, who said they had taken delivery in the final months of 2022, said they were frustrated with the abruptness of Friday’s price cut and Tesla’s lack of an explanation to recent buyers.

What is on the menu for a high passenger density urban transportation? The case of Master Plan 3: Tesla’s CEO, Russo, and the Russian protest at the Shanghai Auto Show

There were a lot of police officers at the Shanghai protest, as well as at other demonstrations, many of which had a large police presence.

Protests are not a rare occurrence in China, which has over the years seen people come out in large numbers over issues such as financial or property scams, but authorities have been on higher alert after widespread protests in Chinese cities and top universities at the end of November against Covid-19 restrictions.

One video, which Reuters verified was filmed at a Tesla store in the southwestern city of Chengdu, showed a crowd chanting, “Return the money, refund our cars.”

“Nowhere else in the world has you seen the kind of competitors that we have here in China?” said Bill Russo, the head of auto mobility firm Automobility.

In 2021, Tesla faced a public relations storm after an unhappy customer climbed on a car at the Shanghai auto show to protest against the company’s handling of her complaints about her car’s brakes.

Musk has said the event is for “people and life of earth,” adding that “it will be a message of good hope & positivity for the future.” That definitely sounds affirming, but reality has weakened the message of that message.

Andrew believes all of this is true. Building our hopes for a high passenger- density urban transport and then never delivering is the biggest failure of the Master Plan Part Deux. Rude! Musk didn’t have to be so specific! He said that there will be at least two new products from Tesla next year, one being a semi truck and the other an urban transit vehicle. Sure, Musk has been pretty open about his disdain for public transportation. He admitted to his biographer that he originally proposed the idea of the hyperloop as a backhanded way to get California legislators to cancel the state’s high-speed rail plan. The guy hates trains.

So what’s on the menu for Master Plan 3? Musk said that it would outline the path to a fully sustainable energy future for Earth. While that seems pretty vague, Musk has teased more specific aspects, tweeting in March 2022 that the plan will also represent a convergence of Tesla with two of his other companies, SpaceX and The Boring Company.

Umar: Musk got crazy about the idea of cars going down city streets in elevators and riding in underground tunnels for his company’s Boring Company. The idea was watered down, but now just Teslas rolling through really tight tunnels.

While Tesla has launched its solar roof business, installations have been slow going. Some customers complain of huge price markups. The revenues remain relatively flat as the company has scaled back its ambitions.

In a recent earnings call, Musk said that the company has “made a lot of progress” on its forthcoming robotaxi. He also predicted mass production of the new autonomous vehicle would begin in 2024. Sure.

Meanwhile, Tesla’s plans for fully autonomous vehicles are uncertain. While AV operators like Waymo and Cruise rack up the miles with their fully driverless robotaxis, Tesla has taken a different approach by rolling out a $15,000 option called Full Self-Driving to hundreds of thousands of customers. There is a Level 2 partially self-sufficient system called FSD that requires constant monitoring by the driver. Tesla recently paused new installations of FSD after the National Highway Traffic Safety Administration called it a “crash risk.”

Musk claims that the Gen 3 platform will be less expensive than the Model 3 and Model Y platforms. It will also “be smaller” than those vehicles, but Musk is predicting that it could eventually “exceed the production of all our other vehicles combined.”

The goal, he has said, is to get to a place where Tesla can make two cars for the same cost as one Model 3. That doesn’t mean that Tesla plans on selling this vehicle for half the price of a Model 3 — only that it is designing a more efficient manufacturing process so it can make this future vehicle faster and more cost-effective. As it ignites an EV price war and earns more money for every vehicle it sells than any of its rivals,Tesla is using its advantage to make more money.

Changes to the Cybertruck have been disclosed, including boxier dimensions, and a big ass windshield wiper. Competing in the electric pickup race like Rivian, Ford, and a few others has made it difficult for the company to start production.

Why did Musk and his family get a B+ on the first Master Plan? And what grade would you give it to the Tesla staff?

Umar: Well Andy, I think the first Master Plan is a success story. As it switched from selling a $100,000-plus sports car to a more practical family sedan, it outlined exactly what it wanted to accomplish.

The goal of making a truly affordable car with the Model 3, was fulfilled by the promised $35,000 car. But instead, the initial 2017–2018 models were priced at $52,000-plus, with a promise of cheaper models to follow. The Model 3 would eventually become available, but only for a short period of time and with some weird interior strippage to attempt to make it cheaper. I am sure it costs more due to the economies of scale.

Musk was able to push his workforce to a point where they wanted what he wanted. It worked, but the cost was pretty enormous, at least for the employees. We can see that in the lawsuits that have been filed against Tesla, they claim horrible working conditions, such as racism, gender discrimination and a lot of on-the-job injuries.

With all of that in mind, I think I would give Tesla a B+ on its first Master Plan. The original $35,000 promise lost some points, but this was mostly a successful story. What grade would you give it?

Andrew: Moving on to the second Master Plan, as Musk called it. (Assumedly a reference to the 1993 movie Hot Shots! Part Deux. Musk loves himself some ’80s / ’90s movie references. See: insane mode.

The Model X was built with the same platform as the S, and by the time Part Deux came around it was more spacious for families. But it’s even more expensive than the S, and it’s not everyone’s cup of tea — mostly because of those showy Falcon Wing Doors, or FWDs (not front-wheel drive, mind you; this was part of a great Tesla community debate on how to abbreviate them. It’s all about context).

It is also prone to mechanical failures. I was watching The Late Late Show With James Corden on Monday night, and I was able to watch him as a guest. He talked about how his Model X FWDs were left open, and crashed on to the side of his garage on two separate occasions. Those sorts of incidents are not unique. I test-drove a Model X and somehow, while parked, the wing tried to close without command and smacked my sister’s head until she moved.

Source: https://www.theverge.com/2023/3/1/23620222/tesla-elon-musk-master-plan-cybertruck-investor-day

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Andrew: “Excuse me.” We have a solar roof division, a mythical Cybertruck, a handful of semi trucks and no urban transport, but what about a tunnel project? Oh yeah, right.

The inflated $15,000 price is very scam-ish. That is with the previous generation of Autopilot hardware. Hardware 4 won’t be retrofitted to the latest FSD, as Musk pointed out. And if you bought FSD, you can’t transfer that software to a newer car that does have the new HW4. That’s a lot of limitations for such an expensive add-on.

Alex Roy once said that the only questions you should ask before purchasing a self-driving car is can I sleep in it. If you can’t, it’s not self-driving. The story is over. Some Tesla owners have certainly tried sleeping in their vehicles, but my god, please don’t do this.

Umar: This was a warning sign too many people ignored. I agree with a lot of what Andy said. Full-Self Driving has been oversold by Musk. But the real red flag should have been his pitch about robotaxis in which your Tesla can go out and make you money while you’re working your real job. This wasn’t some nebulous concept: Musk said Tesla robotaxis would earn their owners upward of $30,000 a year!

Source: https://www.theverge.com/2023/3/1/23620222/tesla-elon-musk-master-plan-cybertruck-investor-day

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Andrew said that it was a very generous grade. I would give Part Deux a D-. Too many failed promises, too much risk, the dangerous confluence of an active safety feature with full autonomy — these things are unavoidable. The goals of the second Master Plan are certainly noble and well-intentioned. They could have been achieved if the circumstances had been different.

There’s nothing wrong with having some ambition. But when the follow-through has been so hit-or-miss, with more misses than hits, then those ambitions can curdle, and anything that comes after can just feel like hot air blowing in your face.

Tesla projects it will take $10 trillion in investments to bring about this sustainable future powered by renewable energy. Musk said it’s “not a big number relative to the global economy.”

There is a path to a sustainable energy on Earth. “It doesn’t require destroying natural habitats. It doesn’t require us to be austere and stop using electricity and sort of be in the cold or anything.”

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An investor asked company executives what the vehicle would be. Musk didn’t want to share. He said that the company would hold a separate event if it answered the question, and that the vehicle would be rolled out somewhere down the line. There are images of car forms under gray sheets in the slides shown.

While Musk had implied that the third Master Plan would seek to connect his ventures, no mention was made of his other companies, such as The Boring Company.

Tesla demonstrated a new, more efficient vehicle manufacturing process, which will be used for its next generation of vehicles. The company calls it the “Unboxed Process,” which allows the vehicle to be built once in the assembly line and only paint the parts that need to be painted. The automaker also claims the next-gen drive unit won’t use any rare earth minerals.

Likewise, Musk’s promise that Tesla owners with FSD would be able to earn passive income by sending their vehicles to autonomously pick up passengers as a robotaxi service has failed to materialize. In recent months, Musk has suggested that Tesla would make a standalone robotaxi vehicle, casting doubt on his original proposal that Teslas on the road today could qualify for such a service.

The new “master plan” extended beyond the auto sector to talk about decarbonizing the global electric grid as well as all industry, shipping and air travel, too.

Lots of researchers, analysts and nonprofit groups have charted out paths to combat climate change. The scale of change required is daunting, and time is running out.

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To automatically adjust the air suspension mid-drive, with the help of data from other vehicles about where the road is hard, and to cut costs on Supercharge stations, by preassembling their entire stations and dropping them down from a crane, were two of the highlights of the software update.

And Teslas remain popular with drivers. The company just won the top award for “Overall Loyalty” to a make in S&P Global Mobility’s Automotive Loyalty Awards. In general, returning car shoppers stick with their previous brand about 50% of the time. Two-thirds of Musk’s followers returned to the company.

“If you have an iPhone and you have an iPad and you have a MacBook, you know, you’re going to get the Apple Watch …. He said the infrastructure is built there.

Instead, 17 company executives shared some tidbits on the vehicle during a round robin of presentations focusing on everything from design to supply chains to manufacturing to environmental impacts and legal affairs.

In a note to investors Gene said the theme of Master Plan 3 left him with more questions than answers.

Jessica Caldwell, an auto industry research firm, said that Musk and company failed to put the cherry on top and looked at a cheaper version of the car.