Tesla’s Masterplan Part 3 was presented on Tesla Investor Day 2023 on March 1. Tesla outlined a path to an electrified economy without fossil fuel and mathematically showed how it is possible by 2050. It will require complete transition of all cars to be electric. To accomplish that Tesla will be making 20 million cars by 2030. This will be done by introducing a next gen vehicle. One of the big announcements was that this next gen car would be produce on a new Gigafactory in Monterrey, Nuevo Leon Mexico to the south west of Austin Texas. The city has 5 million residents. Elon Musk emphasized that this site will expand Tesla’s production capacity and will not take away production from its other factories. In fact, all other Gigafactories will continue to increase production.
Supporting renewables like wind and solar is utility scale battery storage systems. Today, the global energy consumption is 165 PWh/yr. 80% of that comes from fossil fuel but 2/3 of that is wasted and only a 1/3 is doing useful work. Since renewable energy is more efficient, only 82 PWhr/yr of renewable and not the full amount of 165 PWh/yr is needed to replace all the fossil fuel. At 39:22 of the presentation is a slide showing what’s needed in a sustainable energy economy. The list includes:
- 240 TWh Storage
- 30TW renewable power
- $10T investment in manufacturing
- use 1/2 current energy used
- only require < .2% of land
- 10% 2022 World GDP
- Lastly zero obstacles. It believes this is doable and Tesla does not see anything blocking progress toward that future.
The masterplan to wipe out use of fossil fuel consists of:
- 35% 46PWh/hr reduction of fossil fuel by using a renewable power grid w/ solar and wind.
- 21% 28 PWh/hr reduction comes eliminating gas cars and switching to electric cars
- 22% 29 PWh/hr switching natural gas heating to use heat pumps. Heat pumps do not generate heat but move heat like a refrigerator in reverse and is much more efficient.
- 17% 22 PWh/yr high temp heat delivery.
- 5% 7 PWh/yr renewable fuels for planes and boats
The complete migration of cars to electric would require investments to produce 115 TWh of vehicle batteries and stationary batteries. 4 TW of Solar+Wind, and $7T investment in manufacturing.
Tesla showed how the Cybertruck required them to combine manufacturing, design and engineer together for maximum efficiency and cost due to the difficulty of using steel. They confirmed Cybertruck is coming this year.
Tesla’s next gen vehicle will be all about lower cost and being accessible to everyone. This car will help Tesla achieve 20 millions annual production rate by 2030. This car will have majority of its electronics and software built in-house. Its motor will be designed to use zero rare earth metals using a permanent magnet. Today the Model Y uses three types w/ the following mass, 500g, 10g, and 10g. The assembly line will be optimized to only assemble the car once by having individual parts painted separately and moving along the assembly line in parallel, reducing factory footprint by 40% ands pace time efficiency by 30%.
Tesla continues to improve their cars after their initial production. The Tesla Model 3 from 2017 to 2022 have the following improvements. Drive units lighter by 20%, 25 % less rare Earth materials, 75% smaller powertrain factory, and 65% cheaper powertrain factory. The next gen drive unit will have 75% reduction in silicon carbide, can accept any battery chemistry, 50% reduction in factory footprint and would cost about $1k. Cybetruck and Next gen car will be using 48V low voltage architecture vs the current 12V. Power is Current (I)*Voltage (V) so the higher voltage would mean lower current for the same power. Lower current allows the wires to be thinner and use less copper. On semiconductor needs by Tesla, they currently use .7M 12 inch equivalent wafers where the global supply is 135M. Tesla’s current usage share of global semiconductors is .5%. When they reach 20M vehicles, Tesla predicts the global supply would increase to 200M and Tesla would use less than 5% of that or 8M wafers.
The biggest challenge to get to 20 million vehicles will be logistics. Elon quoted a famous saying, “Battles are won with tactics but wars are won with logistics.”. Production is the key. Elon indicates demand is high and close to infinite but EV cars need to be affordable. Tesla’s focus is to drive the cost down and there is no concern with cannibalization of there models. Elon says even a small price reduction creates large increases in demand for its existing models.