Dear Studio Fam,
We're changing things up a bit this week with a deep dive into one story: Tesla Investor Day, during which Elon Musk and his entire management team spent over three hours detailing their vision of the next decade of tech innovation around energy and mobility. The implications of these plans are far reaching across the tech ecosystem as few products embody as many tech specialities as Tesla car and energy products. How many other American companies have vertically integrated hardware, software, and industrial production at the scale of Tesla? Probably zero. Which is why we think drilling down into this story with the first Studio Bytes Deep Dive is worth your time!
Tesla Investor Day
Tesla events are notoriously unpredictable but generally fall into two camps: celebrations and seminars. Celebrations usually involve new product launches, lasers, drones, and hilarious screwups, while seminars involve lengthy technical recruiting demos or expansive strategy reviews for financial analysts. This year’s Tesla Investor Day undeniably fit the seminar category with over three hours of exhaustive reviews of Tesla as a long term investment opportunity guided by Elon Musk’s Master Plan 3. Yeah, that’s actually what it’s called.
The messaging is consistent with previous investor days: Tesla is fundamentally an energy company and its growth potential is best measured by the sum of all energy consumed by humanity. Indeed, Elon presented slides measuring Tesla’s total addressable market in trillions of kilowatt hours while backing up the logistical possibility of shifting the entire carbon energy to renewable sources stored in batteries. The mineral resources needed to completely replace oil and natural gas in this manner, he claims, are actually physically less than those currently deployed to support the extraction, processing, and distribution of carbon fuels. Tesla systems are also cheaper and more resilient than their carbon counterparts so not investing in Tesla is just fighting gravity; the adoption of Tesla tech is inevitable.
Tesla is also the leader in “building the machine that builds the machine” and showcased the increasing speed with which it set up its new factories in Berlin (two years), Austin (18 months), and Shanghai (9 months!). Tesla made numerous hints to its Next Generation Vehicle (NGV), the previously discussed “$25,000 Tesla”, and how for the first time they’ve actually designed the factory and NGV itself in one process. While we got barely a peak of the NGV, the location of the factory that will build it was officially announced: Monterrey, Mexico. Assuming the NGV factory is built within a year, $25,000 Teslas could hit the road in 2024.
What we didn’t see was the NGV itself, updates regarding the production of Cybertruck, or anything at all about the rumors of an impending refresh of the Model 3. Arguably the worst part of the Investor Day presentation was the section on autonomous driving and robotaxis, which is somewhat shocking given the grandiose claims of the impending arrival of “Full Self Driving” taxis from years ago. While Tesla has by far the largest fleet of cars on the road testing autonomous driving features, the company has zero functional robo taxis unlike Cruise, Waymo, or multiple Chinese companies.
Yet the long term value proposition for investing in Tesla is clear. If for no other reason it is that the Federal government will be spending hundreds of billions of dollars on new energy technology in the next decade. Much, if not most, of it will leverage Tesla technology. Already we are seeing Tesla open up its proprietary supercharger network to non-Teslas in response to new Federal laws guaranteeing Tesla taxpayer money to build new chargers so long as they are compatible with all EVs. Tesla already has fifteen times more charging stations deployed in the United States than its closest competitor Electrify America so even if you buy an EV from Hyudai, Ford, or GM you’re probably going to end up buying electricity for it from Elon Musk.