Tesla stock falls over 3% as Elon Musk’s ‘Master Plan 3’ is short on details

Tesla Inc. shares declined more than 5% in the extended session Wednesday after the electric-vehicle maker teased a “next generation” electric vehicle in an investor-day presentation that promised a “Master Plan 3” but avoided disclosing firm details about Tesla’s new cars or its finances.

© karim sahib/Agence France-Presse/Getty Images

Tesla’s stock had advanced right after the closing bell having ended the regular trading day down 1.4%. The stock then saw losses accelerate as the event in Austin, Texas, progressed.


Load Error

Tesla had to “fully rethink” the manufacturing process with the goal of improving assembly and making EVs faster and more cheaply, and with a smaller and lighter powertrain, executives said. They stopped short of giving a timeline for the promised next-generation car in a presentation that lasted more than three hours, however, as executives instead sought to highlight Tesla’s technological prowess.

In a brief appearance, Chief Executive Elon Musk said that he didn’t want the day to be for only Tesla investors but for “anyone invested in Earth,” and he wanted to offer “hope and optimism based on actual physics and calculations.”

“There’s a clear path toward sustainable energy” that doesn’t require destroying natural habitats or austerity, combining energy storage, EVs and other aspects of electrification, Musk said.

See also: Tesla recalls 362,758 EVs, says self-driving software ‘may cause’ crashes

Chief Financial Officer Zachary Kirkhorn was the final scheduled speaker in the session, and he provided information about how Tesla was cutting costs and planned to reduce the operating cost for owners of the next-generation but under-wraps car. Kirkhorn did not provide long-term financial targets, a common offering during investor-day presentations, and the livestream carried on the Musk-owned Twitter platform stopped during his presentation as it reached a three-hour time limit.

The video later resumed on a second stream.

“Probably the most exciting announcement of the day is that we’re going to be building a gigafactory in Mexico,” Musk said at the beginning of a question-and-answer session after the scheduled presentation. Mexico’s president beat Musk to that announcement earlier this week, however.

See: Mexican president says Tesla committed to building plant in Mexico

Musk tweeted nearly a year ago that he was “working on” a new master plan. “Master Plan 2” was released in March 2016, promising a few things that have fallen short of reality, especially around Musk’s hopes for self-driving cars and car sharing. The first so-called master plan, from 2006, outlined Tesla’s strategy of starting off with a pricey and highly desirable sportscar as a springboard and a funding source for future affordable EVs.

The newest blueprint comes as Tesla’s stock regained the $200 level after trading as low as $109.10 in late December. The stock has gained 64% in the quarter so far, though it is down 30% over the past 12 months. That compares with a decline of about 8% for the S&P 500 index in the past 12 months and contrasts with a quarterly advance by that stock-market benchmark of around 3%.

Tesla in late January reported mixed fourth-quarter results, with revenue slightly below Wall Street expectations, but injected some optimism in its production outlook for 2023 and promised to rein in costs faster. Musk also told investors that demand for Tesla’s EVs were not a problem.

Continue Reading