All eyes are on Tesla (TSLA) this week as the EV maker holds its Investor Day Wednesday from its Gigafactory in Austin. The event will be live-streamed (and since this is Tesla, the timing has not been announced), although some institutional and retail investors will be attending the event in person.
Here are three big things to watch as the event unfolds:
Long-term expansion plans
Tesla CEO Elon Musk recently said his long-term goal for Tesla is to produce 20 million cars a year by 2030. With the company delivering 1.31 million vehicles by 2022, it still has a long way to go to reach that goal.
The ramp-ups at Giga Austin, Giga Berlin and expansion plans at Giga Shanghai will help, but the company would need more gigafactories to reach such a massive scale. As of late 2022, Tesla predicted an installed annual capacity of about 1.9 million vehicles, and Musk has speculated that Tesla will need a total of 12 gigafactories to produce 20 million vehicles per year.
Expect to hear more about these expansion plans on Wednesday — and a possible announcement about next steps. Government officials from Mexico to Indonesia have spoken to Tesla executives about expansion plans and would love nothing more than to bring Musk’s grand vision to their shores.
Tesla’s ‘generation 3 platform’
An important part of the Investor Day is the company’s unveiling of its ‘generation 3 platform’.
This generation 3 platform will likely be Tesla’s lower-cost robo-taxi car, as Musk has dubbed it, and will be key to massive volume expansion of Tesla’s cars – and EVs in general worldwide. An electric car costing between $25,000 and $30,000 will open up a wide range of potential customers looking for a low-cost alternative to an electric car.
It is most likely impossible for Tesla to deliver 20 million vehicles annually by 2030 without a cheaper electric car to reach a large group of buyers. Expect Tesla to show investors a working design or even a full-scale model of this gen-3 platform, and hear a bit more about the underpinnings of the platform and powertrain.
“While recent global price cuts have boosted demand, TSLA likely needs Gen 3 to maintain its 50% supply CAGR (compound annual growth rate),” Wells Fargo analyst Colin Langan wrote in a note last week. “Gen 3 is expected to cost $30,000, so TSLA would cover about 95% of US price points; $30,000 EV that is just as profitable as a comparable ICE model is likely to drive more momentum in the near term; therefore credible profit/cost targets and launch timing are key.”
Tesla may not disclose it in full, but investors will certainly be eager to know how Tesla plans to build an electric car cheaply and at scale. Will battery technology be noticeably different from today’s cars? How fast does the vehicle come? These will be important questions that investors are sure to ask during the event.
Musk’s master plan 3
When the invitations went out last month, Tesla fans and investors speculated that this event would be about more than capital allocation and long-term expansion plans. And Musk confirmed that, proclaiming that he would indeed reveal his forthcoming Master Plan 3:
Musk had previously teased his Master Plan 3 early last yearsaying it would have to do with topics like “scaling [production] to extremes, which is necessary to divert humanity from fossil fuels and AI.”
Of course, an essential part of Musk’s vision to shift humanity to a sustainable energy future requires massive scaling of electric cars and making them affordable for most people, as mentioned above.
How to store that solar energy is key to leveraging Tesla’s renewable energy vision. There may be new updates to Tesla’s residential Powerwall battery, as well as new details on technology or upcoming projects for Tesla’s huge Megapack commercial battery applications. Tesla has been
Second, how to store that solar energy will be key to leveraging Tesla’s renewable energy vision. There may be new updates to Tesla’s residential Powerwall battery, as well as new details on technology or upcoming projects for Tesla’s huge Megapack commercial battery applications. Tesla recently ramped up Megapack manufacturing and construction initiatives.
“Tesla has been limited in energy storage for as long as we can remember,” New Street Research analyst Pierre Ferragu wrote in a note last week. “And the ramp-up of the new megapack fab at Lathrop, which quadruples the company’s production capacity, we expect to see a turning point in 2023 to 2024.”
Tesla has been slowly ramping up the use of new 4680 battery cells and using LFP battery chemistry for some of its vehicles in China.
Expect to hear more about those initiatives, and more importantly, how the company will acquire the materials needed to build these batteries. Tesla recently started construction on a lithium refinery in Texas and is reportedly in talks to buy lithium miner Sigma Lithium. Perhaps an announcement will be made about Tesla’s sourcing of critical minerals it will use to build batteries, and where it will make them.
“To support its volume and cost targets, we believe Tesla will talk about the role of in-house battery manufacturing technology, capacity expansion and actions to safeguard raw materials,” Deutsche Bank analyst Emmanuel Rosner said in a note last week. Rosner believes this week’s event will push the stock higher, and raised his price target from $220 to $250.
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Pras Subramanian is a reporter for Yahoo Finance. You can follow him Twitter and further Instagram.
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