First of all: Yes, I am enthusiastic about Elon with his unconventional hands-on mentality. For me as an entrepreneur, it's fascinating to see how he thinks and acts.
But I do not blindly support everything he does. When Spiegel interviewed me for a portrait of Elon Musk, I criticized some of his political statements and in my current podcast, I have a talk with Azeem Azhar, who also isn’t too fond of Elon:
With our 10xDNA research team, we continuously evaluate the developments of our portfolio companies - emotionless & fact-based. From this perspective, the Investor Day was really impressive: it positively surprised us!
It's a pity that the German reporting does not differentiate between Elon personally and his entrepreneurial performance. I am aware that negative headlines click better, but in my eyes, it clearly shows that there is a lack of technological understanding in the editorial offices.
German media failed to address the scope of the Investor Day, hardly any article reflected on what Tesla has already done for our planet (without Tesla there would barely be any other electric cars) and what Tesla is planning.
So what really happened at the Tesla Investor day?
Tesla Investor Day
Masterplan Part 3
“A sustainable energy industry is within reach and we should accelerate it”
As outlined in Tesla’s Master Plan (Part 3), there are no insurmountable obstacles on the path to a fully sustainable energy industry from a technological point of view. This plan covers not only the area of electric mobility but the entire energy industry, including heat pumps as a solution for private households and hydrogen as a sustainable energy source for the industry. If Tesla succeeds in implementing all these solutions, it would not only become the largest company that has ever existed but would also solve our global resource problem and help us achieve complete sustainability in almost all areas of our lives.
How likely is it that the third part of the Master Plan will be implemented? Let's look at the other two parts:
Masterplan Part 1
Build sports car ✅
Use that money to build an affordable car ✅
Use that money to build an even more affordable car ✅
While doing above, also provide zero emission electric power generation options ✅
Masterplan Part 2
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 10X safer than manual via massive fleet learning ⏳
Enable your car to make money for you when you aren’t using it ⏳
Part 1 of the master plan has already been fully implemented. "Part Deux" is also visibly emerging in the company's development, but admittedly has not yet been fully achieved. It is true that Elon sometimes promises things too early, including FSD. But I am convinced that he will deliver all his visions and complete all parts of his master plan in the end, including part 3.
Production, Tesla Energy, 20 million cars per year
One of the main topics at the Investors Day was the planned efficiency improvements and cost reductions in production. With the new vehicle platform, Tesla wants to reduce costs by another 50% and at the same time further increase the quality and performance of the vehicles. Tesla is already the most profitable carmaker in the world. In the future, the electric motors will be completely free of rare earths, the batteries will be equipped with dry electrodes and the company's own heat pumps will be produced fully automatically. A new factory in Monterrey, Mexico will produce the next-generation vehicle platform.
Another important factor in terms of cost reduction is the almost completely vertically integrated supply chain, which recently enabled Tesla to reduce the prices of its Models S and 3 by over 20%. This also allows Tesla to switch to 48 volts earlier, while the entire industry will not have switched within the next 10 years. Other carmakers who rely on suppliers will not be able to keep up with these cost reductions. The increased free cash flow will also help Tesla to reach its long-term goal of 20 million cars produced and 1 TWh of energy storage per year by providing the needed investments of 150-175 billion USD.
Tesla isn’t the only big player implementing a vertical integration: global champions such as Apple or Baidu are now also relying on integrated production and manufacture their chips in-house. In the German car industry, we have relied on outsourcing and supply chains for decades. Now, this could cause us to fall behind. Because of that, the much-discussed Level 3 certification of Mercedes, which sources its FSD technology from Nvidia, is not a proof of technological leadership but rather good marketing. Experience has shown how difficult it is to bring together the different building blocks for such a complex technology.
Back in 2016, I said in a Business Insider interview that Tesla would leave the German carmakers behind. During our company analysis in the 10xDNA investment process, this assumption was confirmed once again.
One area that I believe is massively underestimated is Tesla Energy. The completion of the megapack factory in Lathrop at the end of 2022 will allow Tesla's energy business to grow further, and again, the vertical integration from battery to software is a great advantage here.
I was positively surprised by the role of broad management at Tesla Investor Day. This shows Tesla is not a one-man-show and innovation continues to be driven by many great minds. I also enjoyed insights into concepts like:
As a technology enthusiast and as a long-term Tesla investor, I was excited about the Investor Day. But: two hearts beat in my chest. It pains me to see how the German automotive industry is falling behind instead of renewing itself courageously (i.e. by replacing a progressive Herbert Diess with a cost-cutting Oliver Blume at VW).
This is not investment advice. Please inform yourself about the risks before investing and note our disclosures on 10xdna.com/info
Airtaxis will become a reality
Good news from our Freigeist portfolio: The Lilium demonstrator Phoenix 2 reached its maximum speed of 250km/h for the first time during flight tests two weeks ago. This is a big step for the Lilium team and an important milestone for the eVTOL industry. Another major milestone was reached by the Chinese competitor AutoFlight last week with a test flight over a distance of 250km.
Even if the eVTOL industry is still labelled by some as a "gimmick of the super-rich" these days, it will become an important part of a sustainable mobility concept. If you look at the hard facts, air taxis are many times more effective than a normal car for certain routes and distances. Thus, the eVTOL industry will help to reduce road congestion, open up new residential areas and save valuable resources.
Media & Software I like
Book 📙: Awareness: Conversations with the Masters from Anthony De Mello
Contains short stories with a spiritual theme. The experience has given me new perspectives on life.
TV-Series 📺: Shrinking by Apple TV
It's the first really strong series from Apple for me. Every Apple TV series seems to demonstrate that money isn't an issue, but somehow I don't feel 100% emotionally invested. I am a big fan of shrinking.
Tool 🗒️: Notion
We manage all our knowledge and projects for our companies Freigeist and 10xDNA in Notion. Suitable for Knowledge- and Project Management, but not for Day-to-Day Task Management.
Best regards from Bonn,
Frank