Tesla’s Investor Day: Biggest Takeaways (and Disappointments)
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Tesla CEO Elon Musk was back on Wednesday, 17 years after unveiling his company's first “master plan,” with another global agenda: to electrify the future.
Investor Day took place on Wednesday at Tesla’s gigafactory in Houston. Anticipation was high, as investors expected the company to reveal new vehicles and plans to build additional gigafactories. And while some parts were exciting — like footage of Tesla robots building another Tesla robot — the company didn’t give concrete details on new products and was vague on release dates for others.
What happened (and didn’t happen) on Tesla’s Investor Day? Let’s take a look and also see how it might affect Tesla’s stock.
What happened on Tesla’s Investor Day?
In short, Musk unveiled his $10 trillion plan to create a future of sustainable energy. This plan is not one Tesla expects to accomplish on its own. Rather, it was more of a blueprint for industries across the world to replace fossil fuel with renewable energy.
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For Tesla’s part, the company said it would increase electric vehicle output to 20 million cars per year by 2030. Executive leaders then followed with presentations on how they would cut costs, improve efficiency and scale Tesla to help achieve this goal.
Gigafactory in Mexico
During a Q&A session, Musk confirmed that the company was building a gigafactory in Mexico. That wasn’t news to Tesla watchers, as Mexico’s President Andres Manuel Lopex Obrador had already announced the gigafactory would be opened in Monterrey. Musk didn’t give additional details but said Tesla would manufacture its next-generation cars there.
What didn’t happen?
No “Gen 3” reveal
Tesla didn’t reveal its next generation of EVs. It also once again didn’t set a firm date for the release of its much-anticipated Cybertruck.
Instead, the company’s design leader Franz von Holzhausen and vice president of vehicle engineering Lars Moravy spoke on how they’ve cut operating costs and improved manufacturing efficiency. This included reducing the rare metals in its power trains and the weight of its wire harnesses.
Cutting manufacturing costs is a step toward selling cheaper EVs. But it’s not yet an "affordable car" — which Musk has defined as a car with a sticker price under $35,000.
» Learn more: How to Buy Tesla Stock (TSLA)
Many investors were anticipating the announcement of a sub-$35,000 model. And though the company said it would reveal a more affordable model later this year, the lack of a concrete plan could make investors nervous.
Currently, the cheapest new Tesla costs $43,990 (Model 3). For comparison, a new Nissan Leaf starts at $28,040.
No updates on other gigafactories
Aside from the gigafactory in Mexico, Tesla didn’t announce plans to open more plants. This was surprising, as the company currently lacks the production power to achieve its goal of 20 million EVs per year.
Right now, Tesla can produce roughly 1.8 million to 2 million electric vehicles annually across its four gigafactories. For reference, Tesla produced 1.3 million in 2022.
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Musk himself admitted they would need at least 12 factories with each producing 1.5 million to 2 million cars annually. To reach 12 factories, Tesla would need to build a new gigafactory every year for the next 7 years — while also boosting the efficiency and output of each factory from current levels.
The company has improved production. Tom Zhu, the company’s manufacturing leader, reminded investors that it took Tesla 12 years to build one million cars. It then took them 18 months to build the next million and 11 months to build the third. To reach the fourth millionth Tesla, it took Tesla less than 7 months.
This is a positive trend. But for inventors who wanted hard facts, the lack of another gigafactory was hard to swallow.
How will this impact Tesla stock?
Tesla stock was down 1.43% before the market closed. After Investor Day started, the stock continued to slide in after-hours trading.
Investors should expect the stock to be jumpy this week. The failure to reveal plans for an affordable EV and other gigafactories won’t sit well with investors. Additionally, the company’s CFO Zach Kirkhorn gave a pretty difficult number to swallow — to reach 20 million EVs a year, Tesla will need to spend $150 billion to $175 billion. So far, they’ve invested roughly $28 billion.
As a long-term investment for active traders, however, Tesla still looks strong. The company is cutting production costs, delivering EVs more efficiently and focused on growth. Its stock has rebounded in 2023, rising roughly 87% by the end of trading hours on Wednesday. And it's still the largest producer of EVs in the world — even if it’s not achieving all of its ambitious goals.
The author owned shares in Tesla at the time of publication.