The Vision Behind the Plan - Thoughts on Elon Musk's Master Plan Part Deux

Updated: May 8

When the execution of one master plan is nearing its end, it is time to pen a continuity plan, naturally. This was what Elon Musk unveiled yesterday. In his plan “part deux,” he laid out several deliverables, one of which is underway:

  1. Tesla’s acquisition of SolarCity

  2. Development of more clean vehicles (model 3, compact SUV, pickup truck, heavy-duty truck, and a better-designed bus) to include in the Tesla product portfolio

  3. Autonomous vehicle that would potentially lower the owners’ cost should she desire to share it in one form or another

Perhaps in some parts of human nature that there would always be skepticism towards optimistic plans that intent to make our future better. In this case, we have heard such responses as “there is not a concrete timeline,” or “the cost is huge and they will have to raise even more capital to build the trucks.” What the nay-sayers have failed to realize is the brilliance of the Muskian vision.

Even if there was a small element of “bail-out” of SolarCity, the vertical integration play employed here is clearly a winner within its product portfolio for at least two reasons: 1) offering the Tesla Powerwall as part of an integrated solution to customers, and 2) reducing the supply uncertainty in the solar parts for the next generation of Tesla vehicles. Additionally, the design team at Tesla just might be able to improve SolarCity’s existing products’ “cool factor” - you just can’t convince the owners of beautiful Mediterranean styled homes to put ugly black solar panels on top of their Spanish clay shingles.

The criticism on the Tesla’s future clean vehicles’ lack of timeline and high cost are not wrong. However, they are irrelevant. The original master plan took over 10 years to implement. Tesla has some time to plan out the next iteration. After all, the “machine that makes machines,” the factory that produces these vehicles, is still in an early development/implementation phase. The point of this announcement is setting the stage for the race for the next generation of greatest clean vehicles. It is sending a signal to the potential competitors, the major vehicle manufacturers, that change is coming, and this could (and should) inspire the smart competitors to start researching to make their own versions of electric pickup trucks and the like. After all, a rising tide lifts all boats. What about the engine power needed for a pick up, can an electric powertrain deliver, one might ask? Well, did you think an electric car can achieve the zero-to-sixty speed of 2.8 seconds? The 2016 Tesla Model S P90D can do just that. When it comes to customer needs, Tesla has the right engineers to make it happen, be it speed or power. The benefit of having many competitors work on the same types of clean vehicles is that we would then be on our way to achieve “a sustainable energy economy” at a much serious pace.

By announcing future product plans, Mr. Musk has effectively challenged his competitors to help him realize one of his visions - clean energy.


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