The Secret Tesla Motors Master Plan (just between you and me)

[NYC_SKP]

The Secret Tesla Motors Master Plan (just between you and me)

By Elon Musk, Co-Founder & CEO of Tesla Motors



Background: My day job is running a space transportation company called SpaceX, but on the side I am the chairman of Tesla Motors and help formulate the business and product strategy with Martin and the rest of the team. I have also been Tesla Motor's primary funding source from when the company was just three people and a business plan.

As you know, the initial product of Tesla Motors is a high performance electric sports car called the Tesla Roadster. However, some readers may not be aware of the fact that our long term plan is to build a wide range of models, including affordably priced family cars. This is because the overarching purpose of Tesla Motors (and the reason I am funding the company) is to help expedite the move from a mine-and-burn hydrocarbon economy towards a solar electric economy, which I believe to be the primary, but not exclusive, sustainable solution.

Critical to making that happen is an electric car without compromises, which is why the Tesla Roadster is designed to beat a gasoline sports car like a Porsche or Ferrari in a head to head showdown. Then, over and above that fact, it has twice the energy efficiency of a Prius. Even so, some may question whether this actually does any good for the world. Are we really in need of another high performance sports car? Will it actually make a difference to global carbon emissions?

Well, the answers are no and not much. However, that misses the point, unless you understand the secret master plan alluded to above. Almost any new technology initially has high unit cost before it can be optimized and this is no less true for electric cars. The strategy of Tesla is to enter at the high end of the market, where customers are prepared to pay a premium, and then drive down market as fast as possible to higher unit volume and lower prices with each successive model.

More at link: http://www.teslamotors.com/blog/secret-tesla-motors-master-plan-just-between-you-and-me

[OnlinePoker]

1. This is from 2006 so let's see how they're doing.

1. Build sportscar - check
2. Use that money to build more affordable car - check - Model S has been out for several years now
3. Use that money to build even more affordable car - not yet - Model X is supposed to roll out this year but no word on official cost though estimates are still a prohibitive $100k for the top end 85 kwh version.
4. While doing above, also provide zero emission electric power generation options - being worked on with a charging network from Canada to the Mexican border.

They have to work on affordability or they're not going to be anything but a niche player aimed at people with a good amount of disposable income. Production estimates for model X are only about 15k units per year. The good thing is they are using about 60% of the same parts as the Model S so they won't have to build a full supply chain for the new model.

[NYC_SKP]

2. Here's the larger context, an article published today reflects upon that plan...

From Utility Dive

Elon Musk's master plan for a clean energy future

By Davide Savenije
January 16, 2014 | Print:

Elon Musk, the PayPal co-founder and serial entrepreneur who's worth $6.7 billion, is looking to solve a major world problem: carbon emissions. He wants to bridge the gap between today's fossil fuel-based economy to the clean energy economy of the future.

This is how he's taking us there.

ELECTRIC VEHICLES

For starters, there’s Tesla Motors, the electric vehicle company Musk co-founded and for which he serves as Chairman, CEO and Product Architect.

The mission of Tesla is "to accelerate the advent of sustainable transport by bring compelling mass market electric cars to market as soon as possible," Musk writes in his brilliantly coy The Secret Tesla Motors Master Plan (just between you and me).



The Tesla Model S
Tesla Motors

Musk talks about the “unpriced externality” in the price of gasoline—as in, emissions from combustion engines adversely affect the world and its population, and that’s not being factored into the cost of gasoline.

“When you have an unpriced externality," he says in this video, "you can’t quite rely on the market to do the right thing. So in order to have electric vehicles come sooner than they otherwise would—electric vehicles were always going to be the long-term transportation mechanism, but to make that day come sooner—you have to bridge that gap with innovation. That was the goal with Tesla: to serve as a catalyst to accelerate the day of electric vehicles"

Also: "SOLAR" and "BRIDGING THE GAP&quot

http://www.utilitydive.com/news/elon-musks-master-plan-for-a-clean-energy-future/213246/

[Lint Head]

3. The internal combustion engine should have already gone away with the rise and fall of the

Industrial Age. I know "times of change" overlap but we've been in the Technological Age for quite awhile. Soon to enter an age of biological and technological fusion.

[NYC_SKP]

4. In the end, oil will have been the single factor most responsible for the end of this world....

Odd that it's just an extension of our discovery of fire.

Maybe that's the culprit.

Nonetheless, nothing that I can think of can be held more responsible for overpopulation and wars and pollution, etc., than our discovery of cheap, plentiful, energy-dense petroleum.

Sad.

[Mother Muckraker]

18. Large part of the deadly smog in China is from coal plants generating electricity

It's not just oil. Coal is a major contributor to greenhouse gases. 70% of the electricity in China is from the burning of coal (the other fossil fuel). Most coal plants in China were built in the 90s and the government has no concrete plans to shutter them. It's irresponsible for Tesla to sell their cars in China.

Unclean Coal: Record-Breaking Air Pollution Nearly Shuts Down Chinese City
http://thinkprogress.org/climate/2013/10/21/2810581/air-pollution-shuts-chinese-city/#

China consumes nearly as much coal as the rest of the world combined
article:
http://www.eia.gov/todayinenergy/detail.cfm?id=9751#
graph:

[needledriver]

5. And he's doing it all

with workers who are not laboring under the benefits of a collective bargaining agreement.

Building a sustainable solar electric economy - and union busting.

Yay for the "Master Plan".

[cprise]

6. When did he take action against organizers? n/t

[kristopher]

7. He isn't against labor

Write up by SFGate on Tesla and unionization
Be sure and read the comments:
http://pulse2.com/2014/01/04/tesla-motors-union-talks-99846/

After you read the SFGate comments, read this:
http://www.businessinsider.com/teslas-elon-musk-no-need-for-unions-just-fire-the-assholes-2009-6

[cprise]

8. Got to love this opening sentence at the pulse2 link:

"Currently the works[sic] at Tesla Motors Inc (NASDAQ:TSLA) do not belong to a union, which allows the company to be profitable."

[needledriver]

9. In 2010, AFL/CIO President Richard Trumka

gave a glowing prediction:

We have got to be “the architects of the future.” And I can tell you this: America’s future must include a strong, growing, globally competitive domestic auto industry whose workers enjoy union representation, middle class wages, and secure health coverage and retirement benefits.

That’s how we built the world’s strongest economy and the world’s largest middle class. And I am here to tell you that the AFL-CIO stands shoulder-to-shoulder with the UAW in the struggle to rescue, rebuild, and revitalize the great American auto industry.

Against great odds, we are starting to win that struggle, from coast to coast and from border to border.

On the West Coast -- with the UAW, the AFL-CIO, the California State Federation of Labor, and the local labor councils all working as a team -- we’re ready to ensure that the closed NUMMI plant re-opens its gates immediately after the American flag and the UAW flag are raised above the plant.

Tesla Motor vehicles will be built in the United States, in the state of California, by American workers who have a UAW card in their pockets and the union in their hearts.

http://uaw.org/convention/articles/text-afl-cio-president-richard-trumkas-speech-35th-uaw-constitutional-convention

Fast forward to 2014, and it hasn't happened yet.

http://www.sfgate.com/news/article/Unions-press-for-place-with-Tesla-5109708.php

Fortunately for the 1%ers, anti union propaganda is in full flower on the Tesla forum:

http://www.teslamotors.com/forum/forums/sfgate-unions-press-place-tesla

Is there anyone here who doubts that if Elon Musk wanted union representation at Tesla there would already be a contract in place?

[madokie]

11. More like the workers are paid a fair wage and are treated well

where they don't feel a need for a union.
Would be my guess

[cprise]

12. They get paid a midwestern wage while living around SF

and they work long hours. I'm sure it was different years ago, but they don't sound thrilled about working at Tesla today.

Musk's attitude seems to be that he doesn't hate unions, but would rather try forestalling unionization by offering concessions and handholding (and happy softball propaganda, no doubt). I'm fine with that as long as nothing underhanded transpires.

[cprise]

13. OK

Is there anyone here who doubts that if Elon Musk wanted union representation at Tesla there would already be a contract in place?

Its mostly up to the workers, you know. However, just having ongoing discussion about the topic can have a positive effect in the workplace.

Musk's comment about not being typically American (i.e. adversarial) with labor is quite apt. But he will have to follow the European model of union relations if he wants to have them more engaged in business objectives... they will have to have guaranteed union representation on the Board of Directors, for instance.

[Mother Muckraker]

14. Elon Musk is Anti-Union

Musk is anti-union. He even hired a "union buster" (union avoidance specialist) as head of HR:
http://www.democraticunderground.com/10022830940#post26

Yes, it up to the workers, but if the workers are being lied to by their union avoidance specialist, they will not unionize.

[madokie]

10. He hasn't

Don't pay any attention to the stone throwers as they know no better

[Mother Muckraker]

15. What Elon Musk don't want you to know. (partial list)

95% of Model S owners charge from home. 30-40% of our electricity is generated from dirty coal. Over the next several years, coal use is not expected to decrease much.

Tesla is expanding into China where 70% of electricity is generated from coal. China has few concrete plans to lower coal use. Most of their coal plans are still relatively new. Many were built during the 90s. Its irresponsible selling a high capacity lithium battery device like a 85kwh car to the Chinese market.

Tesla routinely uses non-GAAP figures in their financial reporting to the press who in turn is used to pump up the price of their stock.

They just had their 5th car fire in Toronto a week ago. But Musk still insists falsely that gas cars catch fire more often. Musk used to claim that gas catch fire 5 times more often. His new claim is that gas cars catch fire "5 to 10 times" more often. The Nissan Leaf has 0 fires despite having more cars on the road. Tesla is still part of an ongoing investigation by the NHTSA.

Their plant is the former NUMMI plant that was union busted by Toyota. Tesla hired Group Leaders from NUMMI (non-union) to keep out the former NUMMI union workers. Very few former NUMMI union workers were hired. The Tesla Production crew is a new crew with no experience in mass production. NUMMI produced as many Corollas and Tacomas in a month as the total number of Tesla Model S's on the road.

[NYC_SKP]

16. Electric cars are cleaner than FF, even with some energy coming from Coal...

And my electricity is usually less than 1%- every utility company has a different mix.

Tesla is a start-up, comparing their production figures at this stage with experienced Toyota motors is pretty pointless.

[Mother Muckraker]

19. 30-40% electricity in the U.S. from coal. TSLA massively overvalued.

Ones personal figures are not relevant. The overall production from coal is.

37% of electricity in the U.S from coal
http://www.eia.gov/tools/faqs/faq.cfm?id=427&t=3

Comparing Tesla's production numbers to the former NUMMI plant shows that Tesla's current production figures do not justify TSLA's valuation. For their valuation to make senses, they'd have to be producing at the level of the former NUMMI plant which they currently do not have the skills to do.

http://aswathdamodaran.blogspot.com/2013/09/valuation-of-week-1-tesla-test.html

The only way out of this global warming crisis is to lower energy use. For transportation, the "greenest" modes are taking public transportation, bicycling and walking.

[NYC_SKP]

20. Personal figures certainly are relevant, especially when people can generate their own.

See Sunpower's home generation program for EVs.

http://us.sunpower.com/homes/nissan-leaf/

Also available for Ford Focus, and Solar City has it for Tesla.

We agree on transportation, but we won't see high speed or light rail coming to Alaska or Wyoming anytime soon.

[Nihil]

17. Yawn ... (n/t)