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20 News Items From Tesla Investor Day

There are somewhat mixed views on the newsworthiness of the Tesla Investor Day on March 1st, 2023. I sat through the whole event live and took notes of what I thought was news. Maybe you did too? Maybe you didn’t? Maybe you have already read and viewed a myriad of reactions to the event? In any case, let me present in as short a format as possible what I think was important. I will not go into the overarching Master Plan Part 3 theme of the event, but rather focus on the concrete things that will help Tesla do its part in realizing the plan.

Pre-Event News

First, though, a short list of the things I got to know about shortly before the event itself:

  • Giga Nevada expanding. Old news, I know.
  • Giga Mexico announced. More details leaked recently, like Tom Zhu wanting to build this thing faster than Giga Shanghai!
  • Lithium refinery in Corpus Christi, Texas. Crucial bottleneck addressed.
  • Giga Berlin 4,000 vehicle per week milestone. Faster than planned.
  • Magic-dock in operation at Superchargers in the US. Opening up to others is crucial for the ease of use of all EV owners.

Cool if all this news could have been kept under the lid until the event, but there you go. I did my part speculating before the event, and I too had thought Tesla would roll out something on four wheels. Maybe not a full car, but at least a skateboard chassis. We didn’t see anything. I think the reason is that Tesla is being very careful not to get caught in the Osborne effect. Nevertheless, in my opinion, we did in fact learn a lot about the next-gen platform.

At-Event News

The following was news to me, and even though some of it might have been known beforehand, I put it in there just in case (random order):

  • White paper on global renewable energy transition. It is not out yet, but I think it is the first time an industry entity is calculating and laying out how a complete transition to a global renewable energy system could be executed.
  • SiC. Up to 75% reduction of silicon carbide by redesign of integrated circuits and power electronics. Eventually, the design of all controllers will be done in-house.
  • Rare earth materials. None to be used in next-gen motor. Currently, 520 grams used in Model Y. I heard about nanomagnets 10 years ago — could Tesla have cracked this technology?
  • $1000 motor. I honestly don’t understand how this is possible. Only at immense scale, I guess.
  • Inverter software simulation tools. Being able to simulate magnetic flux in thousands of virtual designs is crucial for optimal performance and efficiency.
  • Multi-battery chemistry. Next-gen platform will seamlessly take any battery chemistry.
  • Heat pump automation. Others struggle with off-the-shelf heat pump components, which are crucial to overall vehicle efficiency. Tesla has automated 99% of the assembly steps. The next generation will be even simpler.
  • Unboxed vehicle assembly process. Giga casting and structural battery makes parallel car module assembly possible, thus eliminating space and time constraint from traditional serial assembly lines.
  • Complete 48V vehicle architecture. No suppliers are ready for this. Tesla has to design all parts from scratch. 75% less copper use. Significant weight saving. Less heat waste, meaning even more overall vehicle efficiency.
  • In-house controllers. The Model Y currently uses 39% off-the-shelf controllers. Cybertruck will use only 15%. The next-gen vehicle platform will use only controllers designed in-house, enabling 100% integrated hardware/software architecture.
  • Extreme vertical integration. As Tesla gets closer to an elusive 100% vertical integration, faster product refinement iteration is enabled. No need for “versions,” just continuous optimization all the way from the first steps of production to the product’s end of life.
  • V2G. Hard to know really how important bidirectional vehicle-to-grid solutions are, considering the utilization of ever cheaper home batteries. However, the next-gen platform will be V2G capable (probably also the Cybertruck for obvious reasons).
  • “No spoon” 4680. 4680 cell production is now at scale. Raw material supply could be the limiting factor sooner than we expected. Surplus production will go to Megapacks (2-year wait time right now), which ensures supply and no excess inventory for vehicle production.
  • Supercharger “air traffic control.” As AI enters route planning, Supercharger station use can be optimized.
  • Unlimited overnight home charging $30/month in Texas. A clue of the super-abundant energy supply of the fully integrated renewable energy future.
  • Next-gen multi-model platform. I suspected that in order for the new platform to be so cheap, it would have to be versatile enough to support any design attached to it, fully autonomous or not.
  • 4 million Tesla vehicles built to date. Great milestone to reach at this important event.
  • Scaling requires $150–$175 billion investment. In order to scale to 20 million vehicles and 1 TWh annual battery production capacity by 2030, more than 10× Tesla’s 2022 net income is needed.
  • Opex % keeps plunging. This is not a given, but is very important for future cash flow.
  • Tesla Operating System. All internal software in the Tesla organisation is now developed by Tesla. No wasted code. No licence fees. No dependencies. Maximum flexibility.

This is just what I managed to take in. I’m sure I got some of it wrong and that there were many other important points. In any case, it’s important to consider that much of the news above will compounded to substantially enhance overall system efficiency, whether it’s in supply chain structure, company functions, or end-product capabilities.

By the way, consider the fact that 18 executives sat for Q&A, and this time Elon did not act front and center all the time. This is very unusual for a company this size, and it manifests the various teams’ interdisciplinary competence. It’s maybe also a sign of Elon not being crucial for the survival of Tesla, which should be comforting for investors, all things considered.

Post-Event News

A couple of important details from the event were spotted by Munro & Associates, and they could have material impact on how we see Tesla’s capabilities going forward:

  • Hairpin stator design in motor. Spotted on slide 51 in the presentation. According to Sandy Munro, this increases the copper wire density in the motor up to 30% (flat wires instead of round), which means either 30% more power or less weight, but in any case, more efficiency. Others have done this before, but combined with the elimination of rare earth materials, Sandy thinks this motor will be a step change in both power output and manufacturing efficiency.
  • New inverter board with new form factor. Sandy and Cory had spotted this new inverter board with a square shape and separate from the motor casing on the factory tour, and they knew right away that Tesla was taking yet another leap in inverter design, despite already being best in the business. 1000V?
  • 48V for everything. On the 48V news, Cory thought this was maybe the most important news of all. He explained how being the first ever doing this would upend the whole supply industry being dialed into 12V. Nobody is ready for this, so Tesla will have to do it primarily by itself. For Tesla to even say it is doing this signals that nothing is impossible going forward. The benefits are incalculable.

Other news in the rumour category:

  • Giga Mexico timeline rumoured. One thing that bothered people was the lack of timelines, short of Tesla’s eternal “we go as fast as we can.” But now we hear that Giga Mexico will be built in 9 months, and production will begin within 12 months of breaking ground. Well, if the first next-gen vehicle rolls out of there in 2025, that would be just fine too I guess.
  • Van to be revealed this year. If the van is to share the Cybertruck platform, it could be revealed soon. It would make sense, because it’s a huge addressable market and vans are essentially the pickup trucks of Europe, but when will Tesla have production capacity for the van. Could it be a Cybervan, as I have speculated?
  • Wireless charging. If you look closely at slide 106, you can easily imagine a wireless charging setup is located there.

My Take On The Event

It’s been really fun experiencing the myriad of reactions to this event. It was long, yes, and not very shiny (shoutout to MeetKevin). I will admit that a part of me was waiting for that “one more thing” moment, but it never came. I also understand people being frustrated over the not-so-choreographed event. Obviously, Tesla just doesn’t care, and we better get used to it.

I sat in for the full show, and I knew it would consist of a lot of things I already knew, and I was on edge to catch all bits of news. It was by far the best presentation from any company I have ever seen in terms of real technical information, and by being neither very shiny about it nor super specific, Tesla is — in my opinion — massively sandbagging.

Tesla Investor Day was surely for investors, maybe not so much for regular consumers (shoutout to Rob Maurer). Tesla is all about how it is going to build things and not so much about when it will do so, apart from a few data points which therefore are easier to remember: 20 million vehicle production capacity and 1 TWh storage capacity by 2030. With what we know today, that’s two data points, all you have to do is connect them.

Ark Invest’s Big ideas 2023 suggests a specific scenario regarding total addressable market (TAM): $40,000 car = 10% TAM. $20,000 car = 70% TAM (i.e., 50% price reduction = 7× TAM). And remember this: Tesla is not making a $25,000 car by removing value and functionality from the car. On the contrary, it will be even more advanced and functional than the current models.

I applaud any EV maker that will be able to close in on the lower price targets that truly enable EV purchase for the masses. Renault is doing a good job with the Zoe, and I wonder what happens when Volkswagen release the ID.2!

I didn’t think I would recite Phil Lebeau from CNBC for this brilliant line when asked to recap Tesla’s event: “This is what happens when you hold an investor day and you give very few details with benchmarks in terms of ‘we plan to hit this on this date at some point in the future.’ What they gave everybody was how they plan to disrupt the automotive industry over the next 5 to 10 to 15 years.”

I think Phil gets it.

Here is Tesla’s 169-page presentation in full, worth a read.

 
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Jesper had his perspective on the world expanded vastly after having attended primary school in rural Africa in the early 1980s. And while educated a computer programmer and laboratory technician, working with computers and lab-robots at the institute of forensic medicine in Aarhus, Denmark, he never forgets what life is like having nothing. Thus it became obvious for him that technological advancement is necessary for the prosperity of all humankind, sharing this one vessel we call planet earth. However, technology has to be smart, clean, sustainable, widely accessible, and democratic in order to change the world for the better. Writing about clean energy, electric transportation, energy poverty, and related issues, he gets the message through to anyone who wants to know better. Jesper is founder of Lifelike.dk and a long-term investor in Tesla, Ørsted, and Vestas.

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