Elon Musk Unveils Plans for New Tesla Vehicle Types
By: MIKE RAMSEY
Tesla Motors Inc. Chief Executive Elon Musk outlined a new model for vehicle sharing and disclosed plans for several new electric vehicles, including much heavier trucks requiring significant capital and staffing at a time when the company is losing money.
Mr. Musk, releasing an updated strategy in a blog post on Tesla’s website on Wednesday, said electric versions of a pickup truck, small sport-utility vehicle, large over-the-road truck and bus-type vehicle are planned for over the next several years. Those vehicles are slated to follow the more affordable Model 3 due in 2017.
The blueprint also includes a plan for customers being able to share autonomous cars. Using a mobile app, owners could earn income by opening up their car up for others to use.
The master plan is the latest in a series of ambitious goals Mr. Musk has given for Tesla and other businesses he runs or controls. Operating for more than a decade, the Palo Alto, Calif., electric-car maker has consistently grown volumes in recent years but posted losses.
Jessica Caldwell, analyst for auto research website Edmunds.com, said the plan was audacious. “The plan sounds overly ambitious for now, especially considering that there are already doubts about whether Tesla can meet its goals for the next two years.”
In addition to launching the Model 3, the company is accelerating investments needed to aim for volumes of 500,000 annually—a significant increase over the 50,000 sold last year. Mr. Musk’s ambition to add a small SUV and a pickup truck could help the auto maker better participate in a light truck market that is growing and now represents nearly 60% of automobiles sold in the U.S.
The retooling of the product plan to include heavier vehicles will require a shift in focus and capital. Tesla thus far has focused on building lighter vehicles from a factory it runs in California and is launching a large battery plant in Nevada.
Mr. Musk said the heavy-duty trucks and buses are “in the early stages of development at Tesla and should be ready for unveiling next year.”
The development of heavier vehicles will “deliver a substantial reduction in the cost of cargo transport,” Mr. Musk said, but it will also be costly. Tesla has had to repeatedly tap capital markets to continue operating.
Among Mr. Musk’s recent plans is a move to combine Tesla with SolarCity Corp., forming an energy company that sells various products. Under his new plan presented Wednesday evening, customers will be able to buy batteries and solar panels at one stop.
Mr. Musk’s proposed combination of the two companies—both of which count him as the largest shareholder—was first presented to investors in late June, but has been overshadowed by the disclosure of a traffic fatality connected to the Autopilot feature in Tesla’s Model S sedan. Regulators are investigating the crash amid scrutiny of Tesla’s marketing of the self-driving features.
Tesla is proposing to pay $26.50 to $28.50 a share to acquire SolarCity, a premium of as much as 30% based on its June 21 stock price. SolarCity’s board and advisers are currently reviewing the offer.
Mr. Musk has been meeting with Tesla’s largest investors, including Fidelity Investments and other big mutual funds, urging them to support the acquisition. Mr. Musk is barred from voting on the deal over concerns of a conflict of interest. Fidelity declined to comment.
“The most informed investors are highly supportive of the transaction,” Mr. Musk said. As of last week, he said he had “yet to talk to an investor after I have fully explained the situation and not had them support it.”
Mr. Musk said the company would work on vehicle autonomy and said he anticipates that owners will be able to “share” a Tesla vehicle and have it earn income picking up people when the owner wasn’t using it.
“You will also be able to add your car to the Tesla shared fleet just by tapping a button on the Tesla phone app and have it generate income for you while you’re at work or on vacation, significantly offsetting and at times potentially exceeding the monthly loan or lease cost,” he said.
The CEO’s new master plan focused squarely on products and technology and steered clear of outlining a strategy for individual markets, such as China or Europe. It also contained no specific financial targets.