Elon Musk revealed the second and rather ambitious master plan for Tesla, leading to market uncertainty.
Tesla may have faced criticism for its autonomous driving mode in its cars leading to a few accidents off late one of which turned out to be fatal. But the electric car maker isn’t one to be bogged down by it and taking attention away from issues at hand, Tesla boss man Elon Musk has now revealed future plans for the company in what he calls ‘Master Plan, Part Deux’. This new grand plan contains ideas to enter the public transport sector and further its autonomous driving technology.
Musk also confirmed the launch of an electric compact SUV and pick-up truck. In fact he stated that a heavy duty truck and something like an electric bus are already in the first stages of development and will be unveiled in 2017. Although critics are questioning if he will be able to launch the new Model 3 Tesla by next year as well. Considering that Tesla has not had a great track record when it comes to reliability and quality, how it caters to the bigger scale of production of the new Model 3 will have to be seen.
Elon Musk also wants to merge the battery making division of Tesla with solar panel maker SolarCity to integrated in-home power systems and solar roofs for electric cars.
He then also wants to foray into car-sharing by allowing owners of self-driving Teslas to rent out their cars when not being used to other people looking to hail a rental car or cab thereby aiming directly at Uber’s business model in a futuristic way. Although this will have to wait till legislations on driverless cars are put in place at a much larger scale and the necessary technology comes into place, if and when that is.
The trouble here is that Musk says he wants to do all of this simultaneously. Critics are saying Elon has bitten off more than he can chew while others say that if there is anyone who can carry out such a grand scheme of things, it is Musk.
For now, what we know is that since the announcement of this grand plan Tesla shares fell by 3.4 per cent whereas they had risen 5 per cent since July 8 when Musk had tweeted that he was working on a second master plan for his company.
What is understood right now is that Musk will be out on the market to raise a lot of funding for his company.
Standard & Poor’s on Thursday varied its rating on Tesla from ‘hold’ to ‘sell’, by saying that while the new plan may build “a long-term technological monument, we think it will create a short-term cash flow sink hole.”
Barclays Capital analyst Brian Johnson wrote in a research note, “It’s beyond us how much fundraising Tesla will need to carry out this master plan.”
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