Last night, Elon Musk released Part Two of his Master Plan for Tesla Motors (TSLA) . According to Musk, Part One, which he created 10 years ago, is nearing completion.
Tesla recently announced that it was dramatically ramping up production of its Model 3 -- an affordable, high-volume vehicle -- that presumably completes Part One of the plan. This leads us to last night's introduction of Part Two.
Under Musk's plan, Tesla will do the following:
Create solar roofs with integrated battery storage. With the acquisition of Solar City (SCTY) , Tesla has the potential to manufacture solar panels that pay for themselves and perhaps generate income for the owner. Once it is ready, this technology would be applied globally.
Expand the electronic vehicle line. Currently, Tesla has plans to manufacture cars and SUVs. Musk wants to add buses and heavy trucks, as well as what he describes as a "new kind of pickup truck."
Refine self-driving capability. Musk wants to improve automated driving technology until it is considered 10x safer than manual driving.
Enable the car to earn money for the driver. Once Tesla perfects the technology for automatic driving, Musk wants the vehicles to serve as a sort of Uber when not in use. Imagine your self-driving vehicle picking up passengers while you're sleeping or at work.
Musk is a visionary who has proven his ability to put his plans into motion. The proposed new products have the potential to revolutionize the places where we live and the means by which we travel.
But a closer read of Musk's plan is telling. According to Musk, Tesla still must create the solar/battery product and plans to address the broader automotive market. Musk says autonomous driving should become widely accepted as the technology matures and that trucks and buses are in the early stages of development.
In other words, I wouldn't expect any of the above-mentioned products or features to be available in the near future.
Also, there is no mention of how any of this will be financed. Does Musk plan to pay for Part Two with the anticipated profits from the Model 3? Or will the company issue additional shares, as it did with its recent secondary offering?
I believe the latter scenario is likely. Secondary offerings can be effective for raising capital, but they can also dilute shareholder value. Longs who are caught up in Musk's vision should take such matters into consideration.
Tesla isn't a science project or a government program. It's a publicly traded company. Years from now, if the company can fulfill Musk's vision and perhaps then it will turn a profit. In the meantime, I expect Tesla to continue to lose money, burn through capital and issue additional shares.