Entering text into the input field will update the search result below

What Tesla's Master Plan 3 Means For Competitors

Mar. 01, 2023 12:50 PM ETTesla, Inc. (TSLA)GM, LCID, RIVN, F210 Comments


  • The writing is on the wall: Tesla, Inc. is probably introducing a truly affordable electric vehicle today.
  • An affordable Tesla could be fatal for companies like Rivian Automotive, Inc. and Lucid Group, Inc., who will be at least five years behind and completely incapable of competing on cost.
  • An affordable EV will have a more significant short- to medium-term impact on General Motors, which is significantly behind Tesla in battery production and has massively committed to EVs.
  • This idea was discussed in more depth with members of my private investing community, Green Growth Giants. Learn More »

Tesla Shanghai Gigafactory

Xiaolu Chu

When Tesla, Inc. (NASDAQ:TSLA) speaks, the entire electric vehicle ("EV") world listens. Just look at LFP; it wasn’t cool in the West until Tesla started producing cars with the chemistry. With the company’s Investor

Electric vehicles are on the rise, and those leading the change are often seen to be the automakers. I disagree. While I like GM, the suppliers behind the automakers have the most to gain. But that's just one component of the green transition. In 2017, I created a portfolio centered on decarbonization that his since grown over 400%; I want to share that experience with you. With a regularly updated portfolio, exclusive research, and direct access to myself, there’s no reason that you too can’t take part in the exciting market. Start your free trial to Green Growth Giants now!

This article was written by

Long Term Tips profile picture

I tend to focus on long-term stock ideas, oftentimes rooted in tech or EVs. I have been a casual investor for years with solid returns and want to share what I have learned with others who may find value in my thoughts.

Analyst’s Disclosure: I/we have a beneficial long position in the shares of GM either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

Comments (210)

Master Plan 3 vs. Whoopee Cushion
Identical vapor/utility ratio
VulpineMac profile picture
@alphatraz : Then you weren't paying attention.
adamwarden profile picture
I love that BYD (BYDDF), the real market leader in the wings, never gets a mention or even considered as a competitor.

BYD sold 193,655 EVs, including hybrids, in February, up 119% vs. a year ago and up 28% vs. January,

February deliveries included 90,639 all-electric or battery electric vehicles (BEVs), up 1110% vs. a year ago.

Yes, 1,110% YoY! Tesla not worried?

Oh, and BYD supplies the batteries for Model ys in Germany.

BYD, remember I brought it to your attention. My pleasure. ;)
@adamwarden well, byd is a Chinese Stock, but seriously, comparing byd to Tesla is like comparing Tata Motors to Mercedes Daimler, not in the same league, not even close. Tech makes the difference.
adamwarden profile picture
@jimi james Ah yes! Tesla doesn't operate in China so Chinese companies don't count. Actually, here in Australia BYD is competing head on with Tesla. Beautifully made cars.

Charles Darwin:
"Ignorance breeds confidence more often than knowledge"
adamwarden profile picture
@jimi james FYI The 2022 Car of the Year 2022: The Tesla Model Y, Ford Ranger and BYD Atto 3 were the top three cars. Tesla MY won.... But BYD Atto 3 finished top 3!
mike ekim profile picture
i'm hearing its becoming impossible for usa corps to take any money out of china, so TSLA profits are trapped ...only gonna get worse
captainccs profile picture
@mike ekim Make a car for $20,000 and sell it outside China for $30,000. You just took $10,000 out of China. Oil companies have been doing this to producer countries for over a century.
02 Mar. 2023
Elons big tell at this event is building autos is hard and complicated…tool and die sets for stamping body panels, fleets of racks to handle the parts, fasteners, new interior design and on and on…oh yeah battery innovation…outsourcing most of that and more…competing with legacy companies with strong ties to vendors…most of these products take five or more years to develop and longer to produce…reality bites.
I like Elon…but how many minutes a day does he have anymore to concern himself with the trials and tribulations of the auto industry? He already gave up the ghost a while back with his statement about not being concerned about his autopilot failing…he disrupted the industry…that’s good enough for Elon.
Musk is in another league but Toyota should be able to give him a run for the money if they chose to.
SimonR2 profile picture
Remember when Model 3 was meant to start at $35,000.
Don't forget CT is meant to start at $40,000

So yes an imaginary car at an imaginary $25,000 is totally plausible (after consuming sufficient Koolaid anyway).
@SimonR2: A smaller car with a smaller battery and less materials overall and with more efficiency throughout the production process and with much higher volumes should mean a MUCH lower cost.

So while I agree about the Cybertruck, though with recent inflation, the target would be more like $50,000ish to start for the low end, I think somewhere close to the $25,000 price is fairly realistic for the small low end car, to start. Obviously FSD and other options will raise that price.

Tesla just cut prices a lot and is pushing the industry, so you're completely ignoring that doesn't seem exactly realistic, re the overall trend of pricing (considering inflation), especially as volumes and efficiency continue to ramp.
@Outcast_Searcher More like $65k for the CT unless Tesla cuts margins. Cost to build a low end Model 3 is $36k or so...theres 0.0% chance that Tesla cuts the cost to build by 50%.

Even if Tesla did the truly unthinkable...found 30% savings on the Model 3 AND sold it at cost, Tesla STILL couldn't produce a $25k car.

The fact that anyone takes these bat spit crazy ideas remotely seriously shows the deep seated gullibility of our society.

Shame on Elon for the lies & grift...but at some point, shame on the vapid consumer who believes this fairy tale.
SimonR2 profile picture
@Outcast_Searcher "with more efficiency throughout the production process"
Coming from?
Noting that Tesla's cost per car is currently increasing slightly Q on Q (pretty much flat) once you correct for the shifting proportion to the cheaper 3/Y. If they could make such a saving for the 25K car why isn't it showing on 3/Y?
captainccs profile picture
"Of course, we won’t know for sure what is in Elon Musk’s latest iteration of the Tesla Master Plan. However, one thing that seems to be fairly certain is that Tesla will be unveiling plans for a truly entry-level EV."

No. www.youtube.com/...
@captainccs so this explains TSLA 5% drop after market move.

It’s consistent with what Musk said at the earnings call about a year ago.

They were not actively developing the low cost car at that time. So yeah, no way they had something meaningful to show as of yesterday.
@Hanamogera: To me, as an investor, it was FAR more important to see a multitude of factors and principles helping lowering both prices over time and improving the technology / capacity over time, vs. seeing a mock-up of the specifics for the Model 2.

For example, to me, the concept of the $1000 price (roughly) for the next generation Tesla drive unit, and the fact that over time they can reduce ALL the rare earth metals from the motors (helping a lot with production scale) are both big. The various ways toward removing roughly 50% of costs over time are a bonus, and it's good to know they're taking cost cutting as a serious priority in the planning.

But I'm not surprised at all to see a 5% or even a 10% drop in TSLA in the short term by speculators vs. investors, but with a volatile stock, that's almost meaningless to me, thinking over an investment time frame.

To me, BYD and Tesla own the BEV market, re scale and growth, until proven otherwise. And given the credibility BYD is showing re producing low cost vehicles, I think it's important that Tesla work on cost cutting over time.

I'd be far more worried about the hapless GM, the apparently mostly clueless Toyota, etc. being realistically able to catch up (vs. brave marketing talk) given how far Tesla is already ahead, and how it keeps gaining real world BEV manufacturing experience at scale as it improves things compared to all the legacy BEV makers (thus far, anyway).

I've been a Toyota fan for a good 40 years now, but what are they THINKING re first tearing down a Model Y to study it NOW, given how far Tesla is ahead?
The "Investors Day" Presentation was an extremely detailed explanation of what Tesla Engineering has accomplished, and what Tesla Engineering is currently accomplishing to reach Tesla's Stated Goal, Building a cheap EV is only one small factor, the Big Picture is Tesla Electric, and Tesla's Positioning in the Energy Market.

Tesla's Engineering Teams have been executing relentlessly and brilliantly, and to those who either do not comprehend or cannot comprehend because of your genetically limited bandwidth, simply follow the money. Musk was the Richest Person on Earth, and now regained the Title, why ? Because lots of people voted for him with their Hard Earned Money. If you think he's a fraud, just review the Engineering Accomplishments of SpaceX, and Tesla in tandem. Richest Person on Earth, Best CEO in the history of this planet. Why ? Check the cash inflows to Tesla vs any other stock or index.

Musk's Companies are extremely well managed, and if you paid attention to the presentation, you would know that. Cathy Wood is correct in stating that "Tesla is the most profound AI Company in the World Today", Pay attention to the detail, every vehicle Tesla sells is linked to its network, which tracks every detail and can control every detail , because the feedback from every vehicle is "training " the network to inform the vehicles of ever changing environments. Stunning Engineering.

What this means to Tesla's "Competitors" ? Well, If I were a Tesla Competitor, I would probably just kill myself now, and get it over with.
@jimi james You're correct regarding Tesla's future.... which is largely misunderstood. But your insults are unnecessary and unbecoming.
Master Plan 3 appears to be a flop and TSLA is selling off In after hours trading…..

Lock in profits…..
Everything gets repriced in a recession, that includes TSLA stock back to support below $150.xx a share….?

Elon fears a recession is coming and said the Fed should stop raising rates now !!!!

Preserve Capital
Austin Craig profile picture
Good article. Enjoyed it.

Not that it matters but "buildout" needs a space.
Maxed Out Mama profile picture
RE the 4680. There are tons of the AWD 4680 Texas SR Y (although it doesn't come w/ the horns) available on the website. But the cheap version is 52k w/ a range of 279 miles, vs the 2170 Fremont version at 54K/330 miles. The European version (RWD/BYD Blade pack) is much cheaper and has almost exactly the same range.

The 4680 has not delivered yet, and I would have thought Tesla could do better given this year's mfrg cell credits. I don't think Tesla has any cost advantage at all.

So right now, I am going to assume that Tesla has pretty much struck out w/ the 4680. It is 2023.
cparmerlee profile picture
@Maxed Out Mama I really couldn't follow any of the logic in this article. To paraphrase the article, it says "Tesla has this great new tabless 4680 cell that is fantastic -- a generation beyond -- except that it doesn't really exist yet, but it will and when it does, it won't actually make a competitive difference. But when combined with a new packaging architecture -- that is playing catch-up to GM, Ford, VW, Kia and just about everyone else who has launched global platforms in the past 3 years, it will be a huge competitive threat to everybody. Except that everybody else is already there."

What am I missing here?
Maxed Out Mama profile picture
@cparmerlee At that point, I was also lost.
dmce profile picture
@Maxed Out Mama - "The 4680 has not delivered yet, and I would have thought Tesla could do better given this year's mfrg cell credits."

Note that you cannot order an Austin built Model Y with 4680 cells on the Tesla website. It is only available as an inventory car. They get added to the available inventory and get snapped up very quickly. A new batch of about 200 cars was added today.

Why is Tesla operating this way and setting the price just a few $K less than the 2170 Fremont built Y's? Because Tesla is using price and availability to control demand so that it matches the production ramp of 4680 Model Y's coming out of Austin. There's no reason it price it less because Tesla is selling all of them they can make.
Model 3 is an entry level vehicle…are you implying they could come out with an even more basic, no-frills vehicle? Doubtful.
Who Dat? profile picture
Yes! It will come without a steering wheel and 4 wheels. Those are mfgr add ons
Rockhopper Colorado profile picture
Tesla really needs to get beyond li battery and on to the LFP asap... I suspect this kind of thing will get the 'Pinto treatment' some day: www.fox10phoenix.com/...

BYD's blade battery won't catch fire.
dmce profile picture
@Rockhopper Colorado - All Model 3 Standard Range cars sold by Tesla worldwide have LFP batteries. Same for the Model Y SR sold in Europe and Asia, but not yet in the US.
@Rockhopper Colorado: Tesla is already clearly moving strongly toward LFP for MANY of its vehicles. But some customers want all the range they can get. All LFP batteries have fire risk to some extent, until reliable solid state is perfected or LFP, etc. energy densisty gets high enough that standard LI batteries for BEV's are considered obsolete.
Maxed Out Mama profile picture
We still don't have prices/specs on the CT, nor are we apparently getting any new vehicle announcement.
@Maxed Out Mama: It's still early in 2023 and inflation is still significant, re the Cybertruck. A mock up of the model 2 doesn't mean much if it isn't coming out in volume until 2025 or so, so what's the big hurry?

To me, things like not needing rare earth metals for the drive units and very cheap drive units for the next generation are MASSIVELY more significant than a mock-up for the model 2, or full specs for the Model 3 now, when it won't be manufactured at high volume for a year or more.
Mark Krieger profile picture
dropping like a rock in after hours
VulpineMac profile picture
@Mark Krieger : Either a very small rock or it's riding a parachute. Microsoft and Rivian are falling faster.
@Mark Krieger I am admittedly a poor investor, I rarely get it right. I watched the presentation. I see nothing but upside, aggressive growth with storage, 4680 cell production, CT, Semi, and a new low cost vehicle(s) in Mexico. Constant cost reduction while improving products. All good news but the stock drops 6%. What do investors see as bad??
Mark Krieger profile picture
@Roy_H function of buy the rumor and sell the news
Buffett Guru profile picture
$25k ev is still unreachable in many countries! Moreover, many countries have under $10k evs that outperformed tsla. Feeling competition forced to reduce prices. I bet if it is indeed the buzz, it will be a truly low end model that will climb up the cost ladder with slightest of upgrades.
VulpineMac profile picture
@Buffett Guru : "Moreover, many countries have under $10k evs that outperformed tsla."
--- Oh, please! Tell me which "under $10K EVs" CAN outperform Tesla! Or are you talking about raw sales numbers, at which point those "under $10K EVs" are only doing so BECAUSE they're "under $10K EVs".
@VulpineMac They outperform Tesla in MPGe and getting around in confined areas. The might be smaller, but if makes them outperform a Tesla in many circumstances.
solucky profile picture
@Buffett Guru

" $25k ev is still unreachable in many countries! "

Should be no problem in 2028 ( Tesla timeline ) and we still have 25K BEV
Musk is so far ahead of his so-called competition. They’re like “wait, what?”
RickJensen profile picture
Mater plan 3, sounds a lot like Plan 9 from Outer Space.
mike ekim profile picture
nothing new...nothn ...look for TSLA to drop tomorrow
@mike ekim I admit most everything they said was expected, but why does that make the stock worth less?
mike ekim profile picture
@Roy_H people were looking for some kind of announcement that would move the stock up ... and it just didn't happen
solucky profile picture
@mike ekim

" nothing new...nothn ...look for TSLA to drop tomorrow "

At least they have a " faked " optimus video
Disagree with this article? Submit your own. To report a factual error in this article, . Your feedback matters to us!
To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.