Hey, I’m Steven and this is Solving The Money Problem.
If you’re new to the channel, welcome.
For the rest of you, this is becoming a regular thing between us.
I like it.
I hope we’re not moving too fast.
On August 2nd, 2006, Elon Musk published ‘The Secret Tesla Motors Master Plan’.
This tongue-in-cheek document detailed Tesla’s plans over the following decade.
I’ll put a link in the description but in effect, there were 4 key objectives.
Build sports car (that was the Roadster) Use that money to build an affordable car
(that was Model S) Use that money to build an even more affordable
car (that was Model 3) And number four: While doing above, also provide zero emission
electric power generation options (that was Solar)
Tesla did what they said they were going to do.
This matters.
One more time.
Tesla did what they said they were going to do.
To have the gall, in 2006, as a fledgling electric vehicle startup to tell the world
“We’re going to make EVs mass-market affordable, and here’s how we’re going to do it”,
and then to successfully execute on those plans over the following decade is a remarkable
feat and says EVERYTHING about Tesla, its vision, its mission, its culture and its ability
to innovate, execute and disrupt.
At the time, their claims seemed ridiculous.
They were ignored, mocked and laughed at.
Fair enough.
I mean, why would anyone believe in this crazy young startup?
But here we are 13 years later, with almost 1 million Tesla’s on roads and their flagship
product, the “even more affordable car”, the Model 3, is taking the world by storm,
absolutely dominating sales and capturing a huge slice of the global EV market.
Guess what?
There’s a new master plan.
Published on July 20th, 2016, it lays out Tesla’s plans for the future.
Do you see where I’m going with this?
Let’s look at Tesla’s Master Plan, Part Duex (that means part 2, for you uncultured
swine) “By definition, we must at some point achieve
a sustainable energy economy or we will run out of fossil fuels to burn and civilization
will collapse.
Given that we must get off fossil fuels anyway and that virtually all scientists agree that
dramatically increasing atmospheric and oceanic carbon levels is insane, the faster we achieve
sustainability, the better.
Here is what we plan to do to make that day come sooner:
Integrate Energy Generation and Storage Expand to Cover the Major Forms of Terrestrial
Transport Autonomy
Sharing Let’s look at each of these in more detail
Integrate Energy Generation and Storage “Create a smoothly integrated and beautiful
solar-roof-with-battery product that just works, empowering the individual as their
own utility, and then scale that throughout the world.
One ordering experience, one installation, one service contact, one phone app.”
This is already in full swing.
Tesla’s Solar roof tiles are coming to market, powerwalls are already available and individuals
are becoming utilities, generating power via solar, storing it in their power wall, then
selling surplus energy back to the grid.
The South Australian government have project underway to create a huge distributed utility
(which they’re calling South Australia’s Virtual Power Plant) by using Solar combined
with Power Walls on 50,000 low-income homes.
To date, 1,100 of the 50,000 homes are part of the virtual power planet and already, at
only around 2% of its final scale, the virtual power plant has stepped in to save the day
and stabilize the power grid when a coal peaker plant went down recently.
This project will act as proof of concept for virtual power plants the world over.
And keep in mind, Tesla’s energy division was basically on ice for a year or two as
Tesla urgently diverted resources from all parts of the company to ramp model 3 production.
With that solved, Tesla is making a big push into energy generation and storage.
Hmm.
Tesla seems to be executing this plan.
Expand to Cover the Major Forms of Terrestrial Transport
Wait, what?
Do they mean cars?
Here we see Tesla’s plans to create vehicles to capture all major consumer markets: sedan,
SUV and pickup.
The Model 3, the Model Y which is ramping as we speak, and the genius Cybertruck to
be released in 2021 check these boxes.
Let’s read on.
“What really matters to accelerate a sustainable future is being able to scale up production
volume as quickly as possible.
That is why Tesla engineering has transitioned to focus heavily on designing the machine
that makes the machine -- turning the factory itself into a product.
A first principles physics analysis of automotive production suggests that somewhere between
a 5 to 10 fold improvement is achievable.” Wait a minute.
Tesla engineers are focused on turning the factory itself into a product?
As in, something you can buy or license from Tesla?
If they can achieve a 5 to 10 fold improvement over current automotive production methods,
this will be massive.
3 years after this was written, we know Tesla bit off a little more than they could chew
with the “machine that makes the machine” during the Model 3 ramp.
However, the lessons learned during this hell, including erecting the “tent” production
line have been implemented in Gigafactory 3 Shanghai which was constructed in record
time, 10 months from muddy field to producing vehicles with 65% LESS capital expenditure
per unit of capacity than the US model 3 production facilities.
I wonder if they’ll implement more leanings into Gigafactory 4 in Berlin which will be
constructed by the end of 2021.
In 2016 Tesla acquired Grohmann Engineering who specialise in “the design, development,
and sale of automated manufacturing systems”.
In 2017 Tesla acquired Perbix stating that with “the acquisition of Perbix, Tesla further
advances its efforts to turn the factory itself into a product and build the machine that makes
the machine.
In 2019 Tesla acquired Hibar systems who have expertise in Lithium-ion battery manufacturing
processes.
Hmm.
Tesla seem to be executing this plan.
But there’s more.
Let’s read on.
“In addition to consumer vehicles, there are two other types of electric vehicle needed:
heavy-duty trucks (ok, that’s the semi, we know about that, whatever) and high passenger-density
urban transport.
Both are in the early stages of development at Tesla”
High passenger-density urban transport?
What the f**k are they talking about?
Tesla is going to become a public transport provider as well?
Yes.
That’s where The Boring Company comes in.
Yeah, the one that digs tunnels.
Guess who’s making the high passenger-density electric vehicles to be used in those tunnels
to transport people around cities in a fraction of the time in currently takes?
It’s right here in the masterplan.
Tesla is working on designs for accessible electric--hmm, I dunno--“microbuses” (let's
call them that) which will operate in Boring Company tunnels as public transport.
Everyone’s asleep on this.
The revenue opportunity is staggering.
Lots of people use public transport today.
Even more will when it’s dramatically quicker.
Autonomy
Tesla’s goal is to develop a self-driving capability that is 10X safer than a human
driver.
They’ll achieve this via massive fleet learning.
Tesla is approaching 1 million vehicles on the roads, each of them collecting data to
improve its full self driving AI via deep learning.
Partial autonomy is already here and Tesla are attacking the problem from both ends - at
highway speeds with Navigate on Autopilot, and at slow speeds in urban environments with
smart summon.
Autonomy is progressing deceptively fast.
That’s the nature of exponentials.
As time goes by, more features continue to roll out and Tesla’s self-driving AI goes
from drunk teenager to attentive adult, it won’t be long until Tesla’s are driving
themselves without supervision and people the world over will liberate what was once
driving time for everything from sleep to work to entertainment to….
(romance mode) #teslababy
I’m not going to get into the nitty gitty about Tesla’s lead in fully autonomous driving.
That can wait for another video.
At this point, I’m confident in predicting that Tesla will win autonomy.
Their data lead is unassailable.
If you question this, tell me why and I’ll address it in a future video.
Point is, Tesla seem to be executing this plan, too.
Sharing You will be able to add your car to the Tesla
shared fleet just by tapping a button on the Tesla phone app and have it generate income
for you while you're at work or on vacation, significantly offsetting and at times potentially
exceeding the monthly loan or lease cost.
This dramatically lowers the true cost of ownership to the point where almost anyone
could own a Tesla.
Since most cars are only in use by their owner for 5% to 10% of the day, the fundamental
economic utility of a true self-driving car is likely to be several times that of a car
which is not.
In cities where demand exceeds the supply of customer-owned cars, Tesla will operate
its own fleet, ensuring you can always hail a ride from us no matter where you are.
This is the most important piece of Tesla’s plan.
From an investor’s point of view, the potential is ridiculous.
Absolutely, unquestionably, RIDICULOUS.
When Tesla’s “fleet awakens” and suddenly millions of vehicles can begin passively earning
income for their owners any time of the day or night, it’s game over.
Traditionally, a consumer buys a car and then its manufacturer doesn’t see any additional
income (unless you count service and maintenance).
Now, Tesla will be able to generate huge recurring profits by taking a slice of robo-taxi earnings.
The overhead in establishing this business is almost zero.
Just a bit of software.
The hardware is being paid for by customers, not Tesla.
Tesla just take a clip of all earnings.
It’s genius.
And it gets better.
If Tesla solves full self driving first, and drivers are no longer required, the biggest
cost in ride hailing services has been eliminated.
The driver.
This means Tesla can massively, MASSIVELY undercut Uber, Lyft, Cabify -- all of them.
And make gigantic profits while doing so.
This alone is the foundation of ARK Invest’s $6,000 5-year price target on Tesla stock.
So, yeah.
Tesla seem to be executing this plan too.
Let’s recap.
Tesla’s current masterplan consists of 4 parts:
Create stunning solar roofs with seamlessly integrated battery storage
Expand the electric vehicle product line to address all major segments
Develop a self-driving capability that is 10X safer than manual via massive fleet learning
And: Enable your car to make money for you when you aren't using it
If they do all four of these things, they’re poised to become one of the most valuable
companies on planet earth.
The question is: can they execute?
Before you answer, just remember.
13 years ago, Tesla told us what they were going to do, and they did it.
I’m Steven Mark Ryan.
This is Solving The Money Problem and I love you all.
Thanks for much for watching.
Leave a comment below.
Did you know about the master plan?
Do you think Tesla can execute?
Why or why not?
And if you have any ideas for future videos, let me know.
I read ALL your comments.
p.s.
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