On 1st March 2023 Tesla hosted their Investor Day to update us on the company’s progress and unveil the third part of Elon's Master Plan - the road required to transition the world to a sustainable energy future. It's by no means easy or particularly fast, but it's entirely realistic and already in motion. As with everything Tesla announce that sounds impossible, it's probably just a matter of time before it becomes our reality. This presentation was an eye-opening view of exactly how to achieve it and what Tesla are doing about it, along with an update on their achievements company-wide and discussion with the entire leadership team, so let’s get into it!

The Master Plan - Part Three

The third instalment of the famed guidelines has been eagerly awaited for some time and now revealed seems almost too simple, but makes perfect sense. To eliminate fossil fuels from our society we must address the following areas;

Each of those needs to be supplanted by a new technology and Tesla's continual mission is to do just that. They've laid out a clear plan and requirements for the world to be 100% sustainable by 2050, assuming we can grow the required deployments by 2030 as below;

Simple enough, right? The improvement from today that's required doesn't seem unrealistic, especially as the industry is pivoting into that direction and accelerating development, Tesla too will play a large role in this work.

Generation, mining and storage deployment

According to their calculations, it would equate to global total requirements of;

• 30 TeraWatts of Wind and Solar generation

• 240 TeraWatt-hours of vehicle and stationary storage

• $10 Trillion dollars manufacturing investment (10% of Earth's GDP in 2022)

• Less than 0.2% of Earth’s land for development

Naturally the sustainable energy transition will actually end up costing less than continuing on the current path of fossil fuel investment and subsidies ($10 Trillion vs. $14 Trillion), and the grid will require about half the total generation (82 PetaWatt-hours / yr compared to 165 PetaWatt-hours / yr) due to the vastly greater efficiency of renewables.

You might think that all these batteries would increase the amount of mining required, but actually that would also decrease - where currently about 68 Giga tons are extracted annually, this would go down to ~54 Giga tons without fossil fuel extraction.

Their storage deployment growth is accelerating more than ever with MegaPack 2XL battery modules (literally the largest thing that may be transported along the road network without heaps of hassle), but it's not just commercial or industrial stationary storage that's needed and that's the best part, individual consumers can become part of the distributed storage and generation, helping to supply and stabilise the grid and even get paid instead of receiving an energy bill each month!

Great strides in technology and process

In every direction they are making huge advances and thanks to their open-patent mentality, the rest of the world can benefit from these too. Ideas that finally challenge the 100-year old construction methods put in place by the likes of Henry Ford. Once fully implemented their impact will be undeniable and force others to take note (as many Chinese manufacturers clearly already do);

• Battery cells - Their latest 4680 now using a fully automated dry electrode process

• Stamping/Casting - Gradually transitioning to just a few major structural pieces per car (helping to eliminate complexity and variation and increase safety)

• Construction Process - Entirely redesigned the production pipeline, implementing parallel and serial workflow (simultaneously building modules that assemble together instead of walking a chassis down the line slowly adding piece-by-piece)

• Auto diagnostics during assembly - Each electrical component connected automatically updates itself, verifies good functionality and even lets the worker know if it was installed incorrectly

• Switch to 48v architecture - A monumental move that will become the standard as larger power requirements forced larger, heavier cables (and removal of lead-acid entirely in favour of Li-Ion)

• Next-gen drive train will cost ~$1,000 due to countless optimisations and refinements, allowing incredibly affordable vehicles

Vertical integration

One of the pillars of Tesla's strategy is of course vertical integration, to self-manage their supply chain and ensure there are no delays due to waiting on suppliers’ shipments. The goal is complete control over part design and manufacture, doing it all in-house to eliminate waste and avoid issues like the global shortages of the pandemic.

They specifically highlighted their power electronics, having designed a chip so efficient it can replace four of the previous iteration. Overall Model 3 & Model Y have around 60% Tesla-built electronics, which is already impressive compared to the majority of the industry, whereas the Cybertruck is 85% and all their next-gen offerings will contain 100% Tesla-produced electronics.

Optimisation

As always there was ample evidence of constant iterative improvements across the board, the Model 3 powertrain for example has a 20% lighter drive unit, uses 25% less rare Earth materials and is built in a factory 75% smaller and 65% cheaper, since 2017.

There's been a 30% increase in overall Supercharging speed since 2018, they've also just begun to roll-out their Magic Dock connector in the US to allow non-Tesla EVs to charge using a CCS connector (common in Europe), with no need for an adaptor.

Once of biggest (if not immediately obvious) changes of note is their planned switch to 48 volt architecture, that will massively reduce the amount of wire required. Along with a reduction in the number of control units around the car, reduces complexity for easier manufacturing and a lot less weight,  thereby allowing extra range for even less energy.

New Giga Factory

As anticipated, this was announced for construction in Mexico and gives great access to cheap, skilled labour and their internal supply chain. They also already have a dedicated border-crossing lane to US to expedite shipping.

On the note of new construction, it’s also worth mentioning (although not covered in this presentation) the opening of a new Engineering HQ facility in Palo Alto, where the majority of their research and development for future products and technologies will be performed - there's a short show they put together to celebrate:

Next-Gen vehicles

Future drive motors will contain zero rare earth minerals and thanks to technologies like their LFP (Lithium Iron Phosphate) cells, they're already able to produce batteries containing zero cobalt or nickel. Although they refused to comment on any undisclosed projects, it's clear that they are going to produce a very affordable, smaller car which will also be used for their Robotaxi fleet at some point in the future. What they could confirm is that it’ll accept any battery chemistry and be produced in a significantly smaller factory for a much lower price, allowing massive scalability like never before.

It was unveiled, albeit possibly unsurprisingly, they have an entirely self-developed software ecosystem that nine major company functions such as Human Resources, Warehousing, Factory and now Recruiting all use - Tesla OS. Completely bespoke code that does exactly what's needed perfectly and nothing more. Most people who've worked with business software can appreciate that the tools to do the job never quite fit perfectly, being off-the-shelf solutions. Yet another edge that Tesla has over the competition, the huge army of incredibly intelligent, encouraged and passionate engineers, due to being the most attractive company for engineering students to work for in the US since 2020 (SpaceX a close second).

Of course there was a whole lot more information and tons of technical details during the four-hour stream that simply can't be covered here, but given Tesla's past performance and ability to execute on high-reaching goals, this roadmap should be taken seriously. With 50% growth year over year, unlimited demand for their products and tens of billions of dollars of free cash in the bank, it seems very likely that this is how the future is going to unfold in front of us.

In previous years the company was making a name for itself, proving what could be achieved and now with the most solid of foundations and undeniable market leadership, they really have the ability to make changes on the global scale. As they have forced the automotive industry to forgo fossil fuels and adopt electric, so too shall the utility providers and all other forms of transportation, thanks to the sheer pressure they can exert on the market, entirely driven by unending consumer demand for their world-leading products and services.