Tesla Reveals Master Plan, Part Deux

Not unlike the last several cars Tesla has produced, CEO Elon Musk’s Master Plan, Part Deux was a little late, but promises great things.

As did his first Master Plan from August 2006, the plan posted to Tesla’s blog page is a blending of Big Picture vision merged with a few relatively minor details, and some explanation and justification to try to head off critics.

Master Plan part one “is now in the final stage of completion,” wrote Musk, and plan two is actually a continuation and expansion of taking the vision hinted at from the beginning.

“Secret” Master Plan, part one, written 10 years ago, had been:

• Build sports car [Roadster]
• Use that money to build an affordable car [Model S, and X added on]
• Use that money to build an even more affordable car (Model 3, in the works]
• While doing above, also provide zero emission electric power generation options [See why Solar City acquisition makes sense now? said Musk]
• Don’t tell anyone. [Tongue in cheek]

In the follow-up to the above, Master Plan, Part Deux [2] continues the talk of sustainability and “the move from a mine-and-burn hydrocarbon economy towards a solar electric economy, which I believe to be the primary, but not exclusive, sustainable solution,” Musk said in the original plan. The new plan in complementary fashion calls for an electrified future merging solar power, on-site energy storage, car sharing, electric autonomous cars – including a “future compact SUV” and a “new kind of pickup truck” and a semi truck and bus too.

“The point of all this was, and remains, accelerating the advent of sustainable energy, so that we can imagine far into the future and life is still good,” wrote Musk of his original plan. “That’s what ‘sustainable’ means. It’s not some silly, hippy thing — it matters for everyone.”

Multi-Fold Plans

The merging of Solar City and Tesla – recently renamed simply Tesla, and not Tesla Motors and including Tesla Energy – is to enable people a life of solar powered energy, energy storage, and autonomous electric vehicles.

Tesla has already been at work on Powerwall, which to date has not shipped very many units, but progress is reportedly on its way.

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As he had about the original Tesla Roadster, Musk attempted to fend off some of the critics he said he expected over his idea to merge his solar business with the car/energy storage company.

Musk noted also despite his detailed math, and carbon footprint, and emissions analysis of the first plan, Tesla was attacked on all those same points.

One might infer Tesla will be attacked further on this latest plan, while of course others will support it.

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That solar energy had been part of the plan from Day One was hidden in plain sight, he observed, as the original master plan one mentioned solar, as well as other sustainable sources.

For vehicle fans, without doing more than tease details, Musk said not only autonomous cars will one day be summoned sans driver to your door, but buses and big freight trucks are also in the plan.

“Both are in the early stages of development at Tesla and should be ready for unveiling next year,” wrote Musk. “We believe the Tesla Semi will deliver a substantial reduction in the cost of cargo transport, while increasing safety and making it really fun to operate.”

With the advent of autonomy, it will probably make sense to shrink the size of buses and transition the role of bus driver to that of fleet manager. Traffic congestion would improve due to increased passenger areal density by eliminating the center aisle and putting seats where there are currently entryways, and matching acceleration and braking to other vehicles, thus avoiding the inertial impedance to smooth traffic flow of traditional heavy buses. It would also take people all the way to their destination. Fixed summon buttons at existing bus stops would serve those who don’t have a phone. Design accommodates wheelchairs, strollers and bikes.

 

Whether the semi will be an open-road truck, or a short-distance local hauler with fast charge capability en route was not stated. To date, no company has demonstrated a battery that could drive an 18-wheeler without an engine coast to coast. Electric trucks, and buses have been demonstrated on short routes, however.

Musk said we should find out next year.

Aside from these commercial vehicles, Musk said Tesla plans to address most of the consumer market as well. He also contradicted his previous statement that a car down-market from the Model 3 may also be built.

“A lower cost vehicle than the Model 3 is unlikely to be necessary, because of the third part of the plan described below,” he wrote.

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How could that be? The answer depends upon many assumptions leading to an autonomous future, but one linchpin is a Tesla vehicle may be able to generate income for its owner as a shared vehicle working while the owner is doing something else.

“When true self-driving is approved by regulators, it will mean that you will be able to summon your Tesla from pretty much anywhere. Once it picks you up, you will be able to sleep, read or do anything else enroute to your destination,” wrote Musk.“You will also be able to add your car to the Tesla shared fleet just by tapping a button on the Tesla phone app and have it generate income for you while you’re at work or on vacation, significantly offsetting and at times potentially exceeding the monthly loan or lease cost. This dramatically lowers the true cost of ownership to the point where almost anyone could own a Tesla.”

Think: automatic Uber, and with an example of opportunity costs met to make John Maynard Keynes proud, the Tesla could be working while the owner is working.

This idea is a whole other level beyond traditional analysts’ view of scratching their heads trying to determine how Tesla will cut supply and production costs, and be profitable. While he was at it, Musk spoke of the factory being a “product.”

What really matters to accelerate a sustainable future is being able to scale up production volume as quickly as possible. That is why Tesla engineering has transitioned to focus heavily on designing the machine that makes the machine — turning the factory itself into a product. A first principles physics analysis of automotive production suggests that somewhere between a 5 to 10 fold improvement is achievable by version 3 on a roughly 2 year iteration cycle. The first Model 3 factory machine should be thought of as version 0.5, with version 1.0 probably in 2018.

On the Way To Driverless

Today, Autopilot is being investigated by two federal agencies, Consumer Reports issued a call to rename and redesign it, but Musk defended it on moral grounds, and said this is just the beginning.

“I should add a note here to explain why Tesla is deploying partial autonomy now, rather than waiting until some point in the future,” wrote Musk. “The most important reason is that, when used correctly, it is already significantly safer than a person driving by themselves and it would therefore be morally reprehensible to delay release simply for fear of bad press or some mercantile calculation of legal liability.”

A Model S seen testing with LIDAR on the roof such as Google uses, and Autopilot presently does not.

A Model S seen testing with a LIDAR sensor on the roof such as Google uses, and Autopilot presently does not.

Musk cited a 2015 federal report indicating despite recent accidents and one death reported, the record proves people are safer with Autopilot than without it.

Without naming Consumer Reports which objected to the “beta” system as basically semi-experimental, Musk defined beta as proof of Tesla’a extraordinary quality control leading to a better safety record.

“This is not beta software in any normal sense of the word. Every release goes through extensive internal validation before it reaches any customers,” wrote Musk. “It is called beta in order to decrease complacency and indicate that it will continue to improve (Autopilot is always off by default). Once we get to the point where Autopilot is approximately 10 times safer than the US vehicle average, the beta label will be removed.”

To sum again, Master Plan, Part 2 is outlined as:

• 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

On this last point, that as mentioned hinges on true driverless cars.

“Even once the software is highly refined and far better than the average human driver, there will still be a significant time gap, varying widely by jurisdiction, before true self-driving is approved by regulators,” wrote Musk. “We expect that worldwide regulatory approval will require something on the order of 6 billion miles (10 billion km). Current fleet learning is happening at just over 3 million miles (5 million km) per day.”

Not Secret

Though Musk had said the “secret” follow-up plan was coming, he sidestepped pundits who might call him out for a plan that’s anything but secret as the media has been alerted via Twitter updates since last week.

The plan has just a few details not already mentioned or hinted at before, and merges things Musk and company have been pushing toward.

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He said ultimately, plan two builds on what plan one actually wanted, but which had been written when Tesla’s chances of success were low. So, plan deux now essentially carries the dream forward of Powerwall, solar power and all-electric cars – and buses and trucks. That drive themselves.

Musk’s introduction to Master Plan, Part Deux, had opened on an overview of Master Plan One, and the necessity of what Tesla hopes to achieve.

“By definition, we must at some point achieve a sustainable energy economy or we will run out of fossil fuels to burn and civilization will collapse,” Musk wrote. “Given that we must get off fossil fuels anyway and that virtually all scientists agree that dramatically increasing atmospheric and oceanic carbon levels is insane, the faster we achieve sustainability, the better.”

This said, many more details will have to be worked out. No doubt this will provide fodder for the bears and bulls to continue the fray, and the Tesla narrative continues.

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