Tesla's Roadmap to Nowhere
I'll give him this: Elon Musk has a solid grasp of futurity-as-PR.
Earlier this week, Tesla tweeted the latest update on the company’s “Master Plan.” It’s… bad. Sloppy. Ludicrously vague. The Verge’s Andrew Hawkins summed it up well: “Tesla’s new ‘Master Plan’ sounds like AI slop.”
It’s significantly less coherent than the previous three master plans (from 2006, 2016, and 2023 respectively). Also, you can only find it on X.com. Tesla’s website still only lists the first three master plans.
(What do you call it when the world’s richest man publishes the new strategic plan for his trillion-dollar car company solely on the social media site that he directed his multi-billion-dollar AI company to self-acquire? Synergy!)
This is a good excuse to reflect on those previous three master plans. Barely any of the stated objectives from those previous plans have been achieved. Probably none of the stated objectives in Master Plan 4 will be achieved either. “Plan” is, in fact, a misnomer. We should understand these Master Plans as public relations interventions. They are crafted by Elon Musk as acts of futurism that are meant to improve the company’s present-day public standing.
Or, as I mentioned on bluesky last week: The single most important thing to understand about digital futurism is that, when Elon’s predictions fail to materialize, he doesn’t have to give the money back.
It’s a stark contrast to, for instance, Moore’s Law. In 1965, when Gordon Moore predicted that the semiconductor industry would double transistor capacity every year for the next decade, he was speaking as Fairchild Semiconductor’s Research Director. Moore wasn’t making some cosmic forecast; he was announcing an ambitious production schedule that he believed his company could meet. This came to be a phenomenally important coordination point for the nascent computer industry, because other manufacturers could plan their capital expenditures around Moore’s roadmap. If Fairchild (and, later, Intel) failed to live up to the expectations of Moore’s Law, then that would be real consequences for the industry.
But those were simpler times, when companies succeeded or failed based on their ability to sell products at a profit. Those days are long behind us.
The first Master Plan was released in 2006. As Edward Niedermeyer (whose book, Ludicrous: The Unvarnished Story of Tesla Motors ought to be required reading) notes:
The “Plan” in 2006 was to (1) start with an expensive sports car, then (2) use the money to build an affordable car, and then (3) use that money to build an even more affordable car, (4) all while providing zero emission electric power generation options.
There was a simple hitch in this plan: the company was operating at a loss. You can’t plow the money from the expensive sports car into an affordable car if you aren’t making money from the expensive sports car to begin with. Instead, Tesla Motors got really good at government arbitrage — gaming California’s emissions tax credit system, etc etc (read Niedermeyer’s book if you’re interested in the details).
But also, who cares. It isn’t as though Tesla’s board was going to hold Musk accountable for these key deliverables. The “Secret Master Plan” was meant to establish Elon as Tesla’s visionary main character. Mission accomplished.
A decade later (2016), Tesla released "Master Plan, Part Deux.” The company still hadn’t released the Tesla Model 3 yet (step 2 of the original plan). Musk needed a new story to tell. And the story was about how his electric car company would transform the entire transportation system. The new plan included four main components:
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
It has been nearly a decade. Tesla has completed zero (0) of these tasks. But the stock value has increased two-hundredfold.
In 2023, Musk released Master Plan Part 3. The first two plans were pithy blog posts. The third edition was a 41-page glossy document. And the new master plan (tagline: “sustainable energy for all of earth”) is odd. The plan frames Tesla not as a car company but as a “sustainable energy” company. But much of its analysis has nothing to do with Tesla. There’s an entire section on heat pumps, of all things. (Heat pumps are great! Tesla is not, and has never been, in the heat pump business.)
As strategic plans go, this… isn’t one. But as a PR intervention, it has a certain grim rationality to it. Tesla’s stock value cratered at the end of 2022, dropping from a high of ~$400/share to a low of $123/share. Tesla was in danger of no longer feeling like the future. And Silicon Valley runs on futurity.
The whole point of the third master plan was to fix the vibes. The Inflation Reduction Act been signed into law a few months earlier. The IRA contained provisions for several hundred billion in new government spending. Elon got dollar signs in his eyes. If the future was going to be full of government spending on the clean energy transition, then of course Tesla would remake itself as the world’s foremost clean energy transition company.
Now we have Master Plan Part IV.
In this latest installment, Tesla is barely a car company anymore, and Elon no longer cares about the climate crisis. Sustainable energy is out. “Sustainable Abundance” is in. (Thanks, Ezra and Derek.) Now Tesla “make[s] physical products at scale and at a low cost with the goal of making life better for everyone.” It “build[s] the products and services that bring AI into the physical world.” Sure.
The future is an Optimus robot in every home. Or something.
None of this tells us anything about the actual future of Tesla as a trillion-dollar producer of material objects. The point of these master plans is to make the stock number go up, or at least to prevent the number from trending down. And that’s because we judge publicly traded companies based on their stock performance, which is practically untethered from their net revenues.
The most noteworthy part of Master Plan IV isn’t the rosy Optimus/AI predictions. It’s the date. Elon went a decade between the first two plans, seven years between the second and third plans, and just two years between the third and fourth.
If Tesla’s underlying business was going well, Elon Musk wouldn’t need to ring this particular bell so frequently. By 2031, I estimate he will be releasing a new Master Plan every eleven hours. It’s the beginning of an exponential curve! Imagine a future of unlimited PR jargon.
It calls to mind another PR item I saw making the rounds this week. Axios’s Jim VandeHei and Mike Allen wrote an article titled “Why you should be AI-obsessed.” It includes this glorious line:
We’re clear-eyed: Every AI company and investor has massive incentive to hype the most glorious AI case. So the technology might never live up to its promise.
But this would require every CEO of America’s seven biggest companies to be collectively delusional about where they’re spending trillions in combined capital.
Oof. That’s not right. It isn’t right at all.
The CEOs of America’s seven biggest companies aren’t collectively delusional. But that doesn’t tell us anything about whether they’re capital expenditure investments are long-term profitable. They are all plowing money into AI because that plowing-money-into-AI makes the stock number go up. When Google/Apple/Meta/Microsoft/Amazon appears to be losing the AI race, the stock goes down. When they announce large investments in AI, the number goes up. The stock price is untethered from the company’s fundamentals, and the stock price is how we keep score.
That isn’t NOT a financial bubble. Eventually, at some point, the products will need to generate more revenue than they cost. But bubbles can keep going for a long time — particularly when you have a general environment of lax regulatory enforcement, extreme wealth inequality, and accounting shenanigans.
Tesla has managed to keep inflating the bubble for two decades. It’s a mistake to treat their plans and promises as indicators of what the future will look like. That just isn’t the game any of these companies are playing.
The first master plan wasn’t abandoned because of unprofitability of the initial models—valuations proved investors were keen to support Musk. The plan was also sensible. It failed for the opposite reason: As a regular car company, it would never grow into those valuations (and Kimball needed a bailout). So it was abandoned and the journey into escalating bullshit plans began
Just gold.