The 3rd Master Plan
It’s happening! Tesla CEO Elon Musk has announced that his Master Plan 3 will be presented at this year’s investor day, on March 1st.
The event - which will be held at Tesla’s Gigafactory in Texas - is a chance for Elon to show off the successes of the past year, and - more importantly - what the company is planning for the future. At the shareholder meeting last August for example, Musk talked about Tesla’s production ramp up, how they dealt with the many shut-downs due to pandemic restrictions, and the announcement of a new Gigafactory within the next year.
This year, however, we’re going to be getting a much bigger event - Elon is going to be outlining his next Master Plan.
Since Musk became CEO of Tesla, he has run the company according to these grand strategies that he has traditionally called “Master Plans”. Every executive team does this sort of thing, Elon just makes sure he broadcasts his plan, which has led to a fair amount of goodwill between Tesla and its fans.
Master Plan Part 1 was presented way back in the hazy past of 2006. Back then, Elon was trying to just get Tesla’s foot in the door of the industry, and so his goals were relatively small-scale: Design a cool electric car that enthusiasts will buy, use that money to make a more mainstream vehicle, then use the sales from that to fund the design of a truly affordable electric vehicle - all while setting up a zero-emission power generation system.
And he more or less achieved all of those by 2016 - the original Roadster sales funded the design and release of the Model S, which went on to help fund the Model 3 - while Tesla worked to get their first charging stations up and running.
That’s when the second master plan - Part Deux - was announced.
Part Deux emphasised expansion of Tesla’s vehicle product line - something they have definitely achieved by now - as well as a focus on battery storage, solar roofs, and developing self-driving capability, as well as a system that would allow users to rent out their cars while not using them. But this plan hasn’t hit all of its major points yet - Self driving has improved, but is struggling with some of the more difficult realities of that task - while the rental system and solar roofs are all but on-ice until Tesla figures out their more pressing issues.
However, Elon is forging ahead, which likely means he believes enough of Part Deux has been completed that he needs to shift focus to achieve the next step in his designs.
So what’s Part 3 about?
Obviously, we’re going to get the whole plan spelled out for us on March 1st, but there’s no harm in a bit of speculation in the run-up. And in true Elon fashion, we’ve already gotten some teasers for what we can expect.
Back in March 2022, we got our first hints that Elon was getting ready for his next big play when he tweeted that he was “Working on Master Plan Part 3”.
That definitely isn’t enough to make any predictions, but luckily a few months later more details leaked from a back-and-forth Elon had with an employee. Elon spoke about how Master Plan Part 3 is all about ramping up to large-scale in order to “shift the entire energy infrastructure and Transport infrastructure of Earth,”
Which is, well, typical of Elon’s pattern of setting huge goals for his companies. To be fair, he’s just about landed all his previous goals, so it could be possible that Musk might pull this off. But how could Tesla work towards those goals? Well, we think these past couple of years give us some clues.
First up, we have the biggest: Production ramp-up. Over the last year or so, we’ve seen an explosion of new activity in Tesla facilities. New manufacturing lines, expansions to Gigafactories, new facilities for Megapacks and the Tesla Semi - and of course the new equipment being brought in to support the Cybertruck’s production, which is due to start this year.
Next we have partnerships. Tesla partners Panasonic and CATL - both companies who support Tesla’s infrastructure by supplying batteries - broke ground on new facilities of their own. And while those companies have partnerships with more than just Tesla, their investment in new production is signaling that they believe the next decade is going to be seeing a major increase in need for these batteries.
And it’s more than just companies. All last year we kept seeing Elon travelling to countries like Indonesia, Canada, and Mexico - meeting with industry and government leaders, and forging new relationships. The link? Indonesia and Mexico both have accessible Lithium mines and processing facilities, and Indonesia has Nickel reserves similar to Canada’s. Both of these minerals are integral to battery production, so if Elon wants to expand, he’s going to have to get access to these sorts of resources - something he’s said over and over again over the last couple of years.
Then we have the Megapack - which enjoyed an unexpected surge in popularity over the last year or so, as increasingly extreme weather began destroying ageing power infrastructure all over the world.
Countries began reaching out to try Tesla’s energy storage system as a way of stabilising their power grids - and found that the Megapack wasn’t just an efficient way to achieve that - but the Virtual Power Plant systems that sprung up alongside the new battery parks helped users further stabilise the grid with their own powerwalls. Tesla has so many new orders for these systems that they recently opened up a new facility in Lathrop, California just to meet demand!
Finally, AI. Tesla had a big year for their developments in software and hardware - and it was all shown off in one event: AI day back in September 2022. Using the Tesla Bot and Dojo supercomputers, Tesla presented a lot of work that had been going on in the background until that point. Huge advancements in their storage and computational ability; and simulations that help teach their self-driving software in the safety of Tesla computer labs.
It may not have been an announced focus for the company in Part Deux, but this work showed that the company was working hard on systems to support all of their other endeavours.
So, what we have here is a pattern that I think it’s safe to speculate on a bit. Elon wants to expand in order to begin really transitioning the whole world off of fossil fuels, his language about “shifting the entire energy infrastructure of Earth” and his history of working to fight Climate Change makes that pretty clear.
Combine that with his ramp-up of production for his cheaper electric vehicles and the Megapack - and we have the basis for Elon working to achieve this goal. Master Plan 3 is very probably going to focus on Megapack farms and cheaper Tesla vehicles - making it easier for countries and new car owners to hop off of fossil fuels. It’s not out of the question to think that Elon might be working towards country and even continent-spanning Virtual Power Plant systems, which could include Tesla’s supercharging stations.
And we’re definitely going to be hearing about more efficient redesigns of Tesla vehicles - like Project Highland - and maybe even get an announcement of a new, affordable model of vehicle.
Musk’s comments last year included some thought on how this sort of production explosion could be supported - that’s where the acquisition of lithium and nickel reserves comes in. All those partnerships Elon has been working on are probably going to translate into Musk’s new Master Plan including work on those projects - expanding facilities to mine and refine these raw minerals into the batteries Tesla needs to change the world. We could see Tesla-owned processing facilities in the Master Plan.
To go with that, it’s likely we’re going to see an announcement of a new Gigafactory. There’s a lot of evidence for a new Tesla facility in Canada and Mexico - but which one would get a Gigafactory is anyone’s guess at the moment. It might be that both countries get a new Tesla facility of some sort, so it’s probably safe to assume we’ll hear about a new facility - if not in the Master Plan announcement, then maybe within the year.
Finally, Elon’s work on AI - A lot of attention has been on the other aspects of Tesla’s expansion, but AI Day changed that. The Dojo supercomputer alone represents such a huge leap forward for Tesla’s capabilities, it’s hard to think that these advancements in AI won’t be at least mentioned in the Master Plan Part 3 - Elon’s dream of completely self-driving vehicles will probably be carried over from Part Deux - but the implications of Dojo and Tesla’s other AI work are far ranging.
Elon has made it his mission to become integral to the industries he’s operating in. Recent trips to meet government officials in Mexico, Canada, Indonesia and the US point to how important his businesses are - he’s even due to join the World Government Summit in Dubai this year. The Administrator of NASA recently said that SpaceX is an integral part of their plans for future expansion in space - this guy is everywhere.
Given how quickly his companies have become indispensable, Elon probably has a good shot at using that influence to finally start pulling us all off fossil fuels with his new Master Plan. but as always, we’ll have to wait till March 1st to get the full details from the man himself - Stay tuned.