Elon Musk is setting up the innovations to which he intends to devote himself in the next decade.
No doubt galvanized by the success of Tesla (TSLA) and SpaceX, he sees things big. We can reasonably expect projects that are likely to surprise even his most fervent fans.
The richest man in the world said last week that he was working on volume 3 of what he calls his master plan. The first volume appeared in August 2006, the second in July 2016..
Musk in 2006 called the project roadmap "The Secret Tesla Motors Master Plan (just between you and me)." It's a sort of guide to transform transportation and keep the planet from dying from pollution.
"Working on Master Plan Part 3," Musk last week tweeted to his almost 80 million followers, without providing details.
A $15,000 Car for Developing Countries?
After a few days of silence, and with expectations building, the entrepreneur lifted the veil on the outline of this series of adventures.
"Can't wait to hear #TSLA's master plan 3," challenged a user on Twitter. "The optionality, verticality, & exponentials @elonmusk & team can take the company is truly mind blogging at this point. All for the greater good of humanity. Why would anyone not invest in this once in a lifetime company!?"
Musk then spoke broadly about what we should expect from volume 3 of the master plan.
"Main Tesla subjects will be scaling to extreme size, which is needed to shift humanity away from fossil fuels, and AI [Artificial intelligence]," Musk said. "But I will also Include sections about SpaceX, Tesla and The Boring Company."
He didn't say when we should expect this segment of his master plan.
And the tweet generated many more questions than it answered. For example: Does this mean Tesla is going to build new gigafactories? Does it intend to significantly increase its production volumes from almost a million in 2021? Will Musk finally produce a really cheap electric vehicle for consumers from disadvantaged social backgrounds and everywhere else? Will Tesla build electric buses?
Here's some ideas from Morgan Stanley analyst Adam Jonas, in a note to investors: "We see Part 3 as mass industrialization. Tesla is developing technology that may ultimately be in position to make a car’s body out of a single piece of casted aluminum alloy as a ‘fuselage’ into which it can ‘inject’ its structural battery pack.
"A fusion of the battery into the structural integrity of the vehicle has the ability to significantly improve vehicle range per unit of mass, driving further cost savings at the vehicle level across a wider range of sustainably sourced battery metals."
Jonas says that over time Tesla can introduce vehicles "with a starting point as low as $15,000 or less in order to penetrate key emerging markets like India."
In January, Musk said during the fourth-quarter-earnings call that Tesla will announce locations of new factories by the end of 2022.
"2022 is the year we will be looking at factory locations to see what makes the most sense with possibly some announcement by the end of this year."
Merging Tesla, SpaceX and The Boring Company?
Tesla currently has four production sites: Fremont, Calif., Shanghai, Austin and Berlin. But only the first two are producing the cars the company currently sells.
The automotive group will officially open the production site in Berlin, which will serve the European market, on Tuesday as TheStreet has reported. The official opening of the gigafactory in Austin should take place by mid-April.
Fremont hosts assembly lines for the Model S, Model X, Model Y and Model 3, while Shanghai produces the Model 3 and Model Y.
The company also has a gigafactory in Nevada, which produces electric motors and lithium-ion battery packs for the Model 3 sedan, and a gigafactory in Buffalo, N.Y., focused on solar energy.
As for AI, it is at the center of the development of Tesla cars toward total autonomy, one of the promises of volume 2 of the master plan. The idea of fully autonomous vehicles has still not been realized.
"We develop and deploy autonomy at scale in vehicles, robots and more. We believe that an approach based on advanced AI for vision and planning, supported by efficient use of inference hardware, is the only way to achieve a general solution for full self-driving and beyond," Tesla says on its website.
Jonas estimates that the AI section of volume 3 of the master plan will be "an ode to Bots," referring to a robot in a human suit the company unveiled in August 2021. The Tesla Bot would use the same AI systems that helped power Tesla vehicles, Musk has said.
"Beyond the potential for commercial use, we believe such ‘moonshot’ type of projects are designed to attract that passionate/forgotten engineer buried at a research institute, think tank or underground lab at a government AI laboratory to emerge from the shadows and join the Tesla team," Jonas said.
The other points Musk raised also prompt questions. Will he merge Tesla, SpaceX and Boring Co., as he did with Tesla and SolarCity?
Jonas thinks this is the logical solution: "We look for Tesla to explore complementary ways to collaborate with Elon Musk’s other companies, specifically" Boring Co., the infrastructure builder, and Starlink, SpaceX’s communications unit.
"We have long seen the link between" low-Earth-orbit satellite communications and next-generation transport networks, he concluded.
