During a presentation to investors, engineers at Tesla Inc announced plans to cut assembly costs in future generations of cars by 50%, citing improvements in design and factory efficiency.
Meanwhile, CEO Elon Musk discussed his vision of a sustainable energy future of “abundance” and is expected to reveal a plan for a small, affordable electric vehicle to expand the brand’s appeal and fend off competition.
While Tesla shares dipped about 3% in after-hours trading, executives showcased the company’s engineering and cost-saving prowess, including an array of engineers, demonstrating the depth of its executive bench beyond Musk. Global production chief Tom Zhu also highlighted that Tesla’s global capacity was 2 million vehicles per year.
Capturing the mass market is essential to Tesla’s goal of delivering 20 million vehicles by 2030, a 15-fold increase from current levels. The company already has a significant advantage over its competitors in manufacturing EVs at a profit. Chief Engineer Lars Moravy stated that Tesla expects to produce its next-generation vehicles at half the cost of the current Model 3 or Model Y.
Moravy described a production process for future EVs he called an “unboxed” model that would deliver lower costs by snapping together sub-assemblies and reducing complexity and time in assembly.
Musk showed a chart of Tesla’s projection of the future electric fleet. The slide depicted the EV maker’s existing models, including the Semi truck, as part of a market projected at 440 million vehicles. Next, it showed the Cybertruck and a shrouded future model as part of a 300 million-vehicle market. Finally, an additional, smaller shrouded model was shown as part of the largest market in its projection: 700 million vehicles.
Tesla is setting a new standard in the electric vehicle industry by opening its charging stations to other brands of electric vehicles, with 10 Supercharger sites already available to non-Teslas in the US. The company is also focused on expanding charging infrastructure in commercial parking beyond the Supercharger network.
While Tesla has outperformed the industry in recent years by rapidly increasing deliveries despite the pandemic and supply-chain disruptions, the automaker is aware that improving battery technology is the key to transitioning to sustainable energy. This will be a potential topic for CEO Elon Musk’s address.
Tesla’s plans to develop a more affordable electric vehicle have generated a lot of interest, with Musk’s plan to make self-driving electric cars priced at $25,000 feasible by 2023. However, the company has faced production challenges in scaling up the production of the 4680 batteries required for these vehicles.
Investors also hope that Musk will address calls to buy back shares, which have only rebounded by over 60% this year after falling by about half of their November 2021 peaks. Despite some concerns that Musk is spending too much time on Twitter, many believe that his leadership has been critical to Tesla’s success in the electric vehicle market.