The 'Master Plan'
In his plan, Musk "a) offers justification of the proposed SolarCity acquisition; b) talks about new transportation products including a compact SUV, a pickup truck, an electric heavy-duty "semi" truck, and high-density urban vehicles; c) details autonomous plans and defends Autopilot; d) details vehicle sharing plans."
"We expect SCTY deal to be approved, but have not included in our model," analyst Joseph Spak wrote in a note.
A Few Specifics
Meanwhile, Tesla has luxury sedans/SUVs, and "every-person" Model 3 is coming (along with CUV variant). The plan confirmed a "new kind" of pickup truck to round out consumer market. Of note, no lower cost vehicle below Model 3.
Related Link: Tesla, Musk's Master Plan And "The Great Gatsby"
"Improving and scaling production critical and Musk again talks about the 'factory as a product' suggesting a 5–10x improvement in what we know about automotive production by 2022," Spak said. "The true incremental products are electric heavy-duty trucks and high passenger-density urban transport. Early stage development has occurred and unveiling could be next year," Spak continued. But, the analyst is unclear "how this gets funded or why/if Tesla needs to own this given smaller volumes and company's other ambitions." In addition, Tesla claimed the HD truck can substantially reduce cost of cargo transport. But, RBC analysts said they "need to better understand the cost/economics" to support Tesla's claims. On the autonomy front, Musk cited 1) more work needed on software validation and 2) regulation can delay implementation. "Also, mentioned fleet is now learning at 3 million miles per day (up from RBC'S previous estimate of 2.5 million miles but fleet is now larger reinforcing our view that speed and scale are key)," Spak noted. Tesla also defended Autopilot, indicating not "beta" in the traditional sense and already safer than humans. The company said it would improve through massive fleet learning with beta tag removed when 10x safer than the U.S. vehicle average. Commenting on the vehicle sharing plans, Spak said, "While this is first formalization of Tesla Mobility, we don't believe a huge surprise though sounds like timing could be further out than bulls appreciated." At time of writing, shares of Tesla fell 2.89 percent to $221.75. Spak has a price target of $210.Autonomy
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