Tesla Inc (NASDAQ:TSLA)’s investor day proved big on words but light on specifics, sending shares down around 5% in after-hours trading in New York.
Speaking in Austin, Texas, chief executive Elon Musk shared his 'Master Plan 3' and plans to turbocharge growth at the electric vehicle (EV) maker.
Reviewing the company's fast-growing EV production, Musk and a team of executives promised more outsized growth through streamlined manufacturing processes, smart design and a relentless focus on costs.
"There is a clear path to a fully sustainable Earth with abundance," Musk said in the presentation, at which the company set annual production of 20mln vehicles as an eventual aspiration.
But investors were left disappointed as Musk and his team avoided specifics on what the next generation of vehicles would look like, or when they might be ready.
"Long on aspiration, short on detail," Gary Black of the investment advisor organization Future Fund said on Twitter.
$TSLA -5.8% AH to $191 following Investment Day. Long on aspiration, short on detail. Lot of discussion on production and engineering but didn’t address demand side how to get from 1.8M delivs this year to 20M deliv target by 2030 (% M-3, M-Y, SX, CT, $25K, Robotaxis). pic.twitter.com/2PNwlEKGTy
— Gary Black (@garyblack00) March 2, 2023
The only major new announcement of note was Musk's confirmation of plans to build a new electric car factory in the northern Mexican city of Monterrey, although this had already been announced by Mexican officials earlier on Wednesday.
"We're excited to announce that we're going to be building a new Giga Factory in Mexico," Musk said.
"It's simply about expanding our total global output," added Musk, who emphasized expansion plans for already-built factories such as California and Shanghai.
Lars Moravy, vice president for engineering at Tesla, said the Mexico factory would produce "next generation" vehicles in "the next couple of years", but also did not provide any further clues about specific plans.
Moravy and Tesla design leader Franz von Holzhausen took the stage to show off a number of planned manufacturing changes meant to improve the efficiency of Tesla vehicle production. But von Holzhausen said that Tesla would not yet reveal its “next gen” vehicle.
Asked late in the question and answer session about timing and design for new vehicles, Musk cut off a questioner.
"We will have to decline to answer," he said, turning to another analyst. "We will have a proper product event but we would be jumping the gun if we were to answer your question."
Analysts had hoped the high-profile billionaire would elaborate on the roadmap to a new vehicle.
While executives outlined fundamental changes envisioned to streamline manufacturing, Musk said he would be reluctant to retrofit current plants to incorporate improvements, not wanting to suspend output.
"Demand for our vehicles might as well be infinite," he said. "The issue is affordability."
Goldman Sachs (NYSE:GS) reflected the mixed feelings, saying the event "should increase investor confidence in Tesla's ability to reduce costs by ~50%... However, we believe many investors were hoping for more specifics on [...] a third generation vehicle" and that the "lack of clarity" is "likely to be viewed as a disappointment".
For more bullishness, there was Wedbush, who conceded there were "no specific details" for the sub-$30k range car that the Street had been anticipating - "which will cause a knee-jerk modest sell-off this morning" - but for investors it is "crystal clear just how far ahead Tesla is ahead of the rest of the auto industry when it comes to producing and scaling EVs with last night another display of the pure breadth and scale of Tesla globally".
Shares of Tesla were changing hands at US$191.30 in after-hours trading, compared to the closing price of US$202.77 in New York on Wednesday.
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