Tesla CEO Elon Musk speaks at the Model X launch event in Fremont, Calif.(Photo: SUSANA BATES, AFP/Getty Images)
SAN FRANCISCO – Watch out, fellow automakers: Elon Musk announced Wednesday evening that Tesla Motors, known for pricey electric sedans, hopes to expand into small SUVs, a pickup and even heavy-duty semis and buses in a bid to revolutionize transportation as we know it.
That bombshell was just part of Musk's long-touted Tesla master plan, a follow-up to one issued when the company was just starting out, outlining a strategy that pivots the company from a builder of niche automobiles to a producer of a broad range of passenger and commercial vehicles that eschew fossil fuel.
Also noted in the plan, which Musk published on the company's website, is the company's more well-known pursuit of the consumer solar business through its planned acquisition of SolarCity.
Tesla will "create stunning solar roofs with seamlessly integrated battery storage, expand the electric vehicle product line to address all major segments, develop a self-driving capability that is 10 (times) safer than manual via massive fleet learning, (and) enable your car to make money for you when you aren't using it," reads Musk's "Master Plan, Part Deux."
The sheer ambitiousness of Musk's missive was both typical and controversial.
"If Part One of Elon Musk's master plan was like putting a man on the moon, Part Two is a lot more like colonizing the galaxy," said Jessica Caldwell, director of industry analytics for Edmunds.com, She called the plan "overly ambitious for now, especially considering that there there are already doubts about whether Tesla can meet its goals for the next two years."
She noted, however, that Tesla's goals are different from that of other automakers because of the goal of eliminating the need for fossil fuels.
Autotrader senior analyst Michelle Krebs was more blunt.
"As is typical, Elon Musk has laid out a grandiose plan for the future with no timeframes and few specifics, and no mention of how and when Tesla will be profitable," she says. "Tesla's latest Master includes expanding its electric vehicle product line to cover all major segments, when it hasn't been meeting production targets with the limited product line it has now and in the next couple of years."
Digging into the intriguing details, Musk says that to not only succeed as a company but also revolutionize clean transportation, Tesla must expand its product line beyond the forthcoming and lower-priced Model 3 (starting at $35,000 compared to the Model S and roughly twice that price). So look for Tesla's drawing board to include plans for a compact SUV and a pick-up truck.
In a true departure from the realm of the luxurious Model S sedan, Musk sees a future filled with Tesla-branded, electric-powered cargo trucks and buses.
"In addition to consumer vehicles, there are two other types of electric vehicle needed: heavy-duty trucks and high passenger-density urban transport," he writes. "Both are in the early stages of development at Tesla and should be ready for unveiling next year. We believe the Tesla Semi will deliver a substantial reduction in the cost of cargo transport, while increasing safety and making it really fun to operate."
Musk also reiterated his commitment to making Teslas -- eventually -- fully self-driving vehicles that can always be taken over by the driver. This stands in contrast to Google's plan for its self-driving cars, which will not have a steering wheel or pedals. But that could be a while.
"It is important to emphasize that refinement and validation of the software will take much longer than putting in place the cameras, radar, sonar and computing hardware," writes Musk, adding that worldwide regulatory approval of such tech (not to mention consumer comfort) will require 6 billion miles of on-road testing.
Musk's plan calls for Tesla owners to be able to tap a button on the Tesla app and signal to other drivers that their vehicle is available for short-term rental. Presumably that's for a time when Teslas don't all cost $100,000; few owners might want to loan out size tech treasures.
But, Musk adds, "in cities where demand exceeds the supply of customer-owned cars, Tesla will operate its own fleet, ensuring you can always hail a ride from us no matter where you are."
Aiming beyond the garage, and for the roof
The master plan also makes clear Tesla hopes to become a player in the home solar game. And integral to this goal is Tesla's recent $2.8-billion bid for SolarCity, the nation's largest solar energy concern.
Tesla announced a new lower-cost version of its "falcon-winged" Model X SUV on Wednesday, less than a year after its debut. Is demand for Tesla's high-priced current models starting to slip? (Photo: Tesla Motors)
The deal is being scrutinized given Musk's 22% stake in SolarCity and the fact that it is run by his cousin, Lyndon Rive. Musk told The Wall Street Journal Wednesday that he expects a vote on the acquisition will be approved by more than two-thirds of shareholders.
Tesla shares dropped to $193 when the deal was announced in late June, but have since rebounded to $238. Tesla's market cap is $33 billion, astonishing for a high-end electric-vehicle automaker when considering General Motors' $49 billion market cap.
Musk stumped for the deal in the plan, noting that the company can't tackle solar efficiently "if Tesla and SolarCity are different companies, which is why we need to combine and break down the barriers inherent to being separate companies."
From Musk's point of view, Tesla can do for the solar-install experience what it did for the long-derided electric car: Make it cool.
Tesla will "create a smoothly integrated and beautiful solar-roof-with-battery product that just works, empowering the individual as their own utility, and then scale that throughout the world. One ordering experience, one installation, one service contact, one phone app," he writes.
Also currently clouding the air of Musk's ambitious vision for Tesla is the first death related to Tesla's new Autopilot feature.
Federal regulators are investigating the May crash that killed tech enthusiast Joshua Brown, 40, and Musk has tweeted that he is working with suppliers on retooling the feature, which allows Tesla Model S and X vehicles to drive themselves while staying clear of other cars.
Tesla's response to the crash included a post on its website titled "A Tragic Loss," which lamented Brown's death and reiterated that the system is meant to be used with driver oversight. "The data is unequivocal that Autopilot reduces driver workload and results in a statistically significant improvement in safety when compared to purely manual driving," the post noted.
Components critical to the new Tesla master plan are efficient and plentiful batteries, which both power Tesla vehicles and allow consumers to store energy at home in so-called Tesla Powerwalls.
That's especially true as Tesla aims to ramp up production tenfold – from 50,000 vehicles a year to 500,000 – beginning in 2017 with the introduction of its mass-market Model 3 sedan. Musk has promised that the in-construction Tesla Gigafactory east of Reno, Nev., will produce, in cooperation with Panasonic, a new generation of lithium-ion batteries at a lower cost than traditional batteries.
Tesla is building a massive Gigafactory east of Reno, Nev., where the company will produce low-cost lithium-ion batteries that will power its Model S, X and forthcoming 3 vehicles. (Photo: Tesla)
Tesla has already faced challenges meeting delivery timetables, most recently falling 3,000 vehicles short of its 17,000-car second quarter goal. Some delays related to the intricate design of the Model X's falcon doors, which open up instead of out, a feature Musk insisted on. Waiting on batteries would only exacerbate productions issues.
Writing plan while summoning Gatsby
For weeks, Musk has been teasing about the new plan via his hyper-active Twitter account. The Tesla master plan was delayed was due in part to Musk's focus on the launch earlier this week of his Falcon 9 rocket to the International Space Station. Besides heading Tesla, Musk is CEO of Space Exploration Technologies, or SpaceX.
One recent tweet opened a window on just how driven and hands-on Musk is with his companies, which also include the against-all-odds success of SpaceX. The rocket payload company had hurdles that included not just technology but also the deep pockets of competitors from governmental agencies in the U.S., China and Russia.
After initial launch failures, SpaceX has gone on to reap lucrative private contracts and is now valued at $12 billion. Musk himself is said to be worth $12 billion, a fortune that started with the sale of PayPal to eBay.
"Will be working at Tesla on Autopilot & Model 3 today, then aiming to pull an all-nighter and complete master product plan," Musk tweeted after the launch earlier this week.
Other tweets revealed that Musk was finishing his plan to the soundtrack from The Great Gatsby, to which he added: "Not easy to convey irony in a tweet." Novelist F. Scott Fitzgerald's Jay Gatsby is a self-made tycoon who constructs a rich but ultimately dark and tragic life for himself.
Musk's original Tesla plan, written three years after the company's founding in 2006, cited a desire 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."
Master plan 2.0 would seem to tackle that revolutionary challenge head on. The issue now is simply executing on that bold vision.
Follow USA TODAY reporter Marco della Cava on Twitter: @marcodellacava
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Source: Musk sees Tesla as an energy company - plus cars
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