During Tesla’s 2023 Investor Day presentation in Austin, Texas, billionaire CEO Elon Musk shared the third part of the company’s Master Plan towards a fossil-free Earth. But the plan was received with mixed feelings. We get to the bottom of it.
Our energy economy today is dirty and wasteful. 80% of global energy comes from fossil fuels and only one-third of global energy delivers useful work or heat. But a sustainable energy economy is within reach, and this is where Tesla’s master plan comes into the picture, in repowering the existing grid with renewables, switching to energy-efficient electric vehicles, and switching to heat pumps in homes, businesses, and industries.
Looking Back…
Before we get into the third Master Plan, let’s take a moment to review Tesla’s first two Master Plan iterations.
The first one in 2006 consisted of the following four points:
> Build a sports car
> Use that money to build an affordable car
> Use that money to build an even more affordable car
> While doing the above, also provide zero-emission electric power generation options.
According to many experts, the first Master Plan was a success story, positively impacting the automotive industry. The 2016 Master Plan, or “Part Deux”, is where things get a bit more complicated:
> 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
The judgement? The first goal has been achieved. Tesla sells solar roofs that are integrated with battery storage. While the second point is still a work in progress when it comes to production, it’s still had significant improvement. Tesla is currently selling: Sedan (Model S, Model 3), SUV (Model X), Compact SUV (Model Y), Truck (Semi) and has announced: Pick-up Truck (Cybertruck – production in 2023), Van (TBD est. 2025), Hatch (TBD est. 2025). As for the third goal, self-driving has been demonstrated to be safer than human driving. Tesla vehicles with autopilot engaged have 0.25 accidents per million miles driven versus 1.8 accidents per million miles for the total US vehicle fleet which is not quite 10x but close. Finally, the robot taxi concept has not been achieved yet.
In summary, as it often is with Elon Musk, he is right on his predictions but not on the timeframe. With these brief assessments, we move on to the third and current instalment of Elon Musk’s plan for Tesla.
Unpacking Master Plan 3
At the start of the presentation, Musk spoke broadly and ambitiously: “There is a clear path to a sustainable-energy Earth. It doesn’t require destroying natural habitats. It doesn’t require us to be austere and stop using electricity and be in the cold or anything. In fact, you could support a civilization much bigger than Earth, much more than the 8 billion humans could actually be supported sustainably on Earth.” Evidently, the presentation was more about the grander plan and not just a new product reveal.
To this effect, Master Plan 3 to ‘Eliminate Fossil Fuels’ includes the following (% is the reduction in fossil fuel use):
> 35% Renewably power the existing grid
> 21% Switch to Electric Vehicles
> 22% Switch to Heat Pumps
> 17% Electrify High Temp Heat Delivery & Hydrogen
> 5% Sustainably Fuel Planes & Boats
One key difference one may notice is that while the first two master plans we discussed above focused on specific Tesla productions such as vehicles, solar roof, battery and self-driving technology, Master Plan 3 focuses on a broader plan for humanity to transition to a sustainable earth. In Musk’s words, it creates a “sustainable energy civilisation” that he predicts will take $10 trillion in investment to reach fruition.
While the talk about heat pumps was promising, it was not the first: heat pumps are already installed in Tesla’s Model Y SUV and as promising as the technology is for both cars and homes, several technical and installation hurdles need to be overcome: Last year, the company was forced to issue a recall to fix poor windshield defrosting and cabin heating, a common con of heat pumps. Pumps need to be sized correctly and installed by highly qualified engineers too.
And how will we just transform into a renewable-powered society? By expanding the world’s energy storage capacity. Mining Nickel. Building wind and solar infrastructure that will take less than 0.2% of the Earth’s surface, according to Musk. Importantly, he highlighted the inefficiency of the fossil fuels versus sustainable energy argument when looking at the ‘End of Use Efficiency’ of both. A sustainable Energy Economy would require only 50% of the energy as compared to the current state given the amounts of energy lost during the production and transportation of fossil fuels.
FEATURED IMAGE: via Pexels | IMAGE DESCRIPTION: Cars Parked In Front Of Company Building That Reads ‘Tesla’