Tesla's New "Master Plan Part 4" Could Be An Alarm Bell for Investors

Key Points

• Tesla's first two master plans featured clear goals that the company has largely met.

• Its newly released "Part 4" is vaguely written and focused on autonomous humanoid robots.

• Electric vehicles barely get mentioned, which is a red flag.

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When even Elon Musk admits that a plan is lacking in specifics, you know it must be pretty vague.

Yet that's exactly what Musk said about Tesla's (NASDAQ: TSLA) own "Master Plan Part 4," a day after it was unveiled on his social media site X. Responding to criticism of the plan, he admitted in a Tuesday post, "Fair enough. Will add more specifics."

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However, the lack of details isn't the only issue investors may have with the latest installment of Tesla's corporate roadmap. If it's an accurate reflection of the company's priorities, it may signal a radical change in the company's thesis. Tesla shareholders should carefully consider whether this new road is one they want to travel.

Image source: Getty Images.

A man with a plan

Musk's initial "Secret Master Plan" for Tesla was unveiled on August 2, 2006, consisting of four simple steps:

1. Build sports car [this was the hand-built Roadster, the company's only product at the time]

2. Use that money to build an affordable car [the Model S]

3. Use that money to build an even more affordable car [the Model 3]

4. While doing above, also provide zero emission electric power generation options [Solar Roof/Powerwall]

Ten years later, in 2016, Musk unveiled the "Secret Master Plan, Part 2." It wasn't as simple as Part 1, but it still had actionable goals:

• Introduce the Model 3, plus a "future compact SUV" (the Model Y) and "a new kind of pickup truck" (the Cybertruck) to "address most of the consumer market."
• Unveil two non-consumer electric vehicles: a "heavy-duty truck" (the Tesla Semi, which was unveiled in 2017) and a "high passenger density urban transport" vehicle (the prototype 20-passenger Robovan that the company unveiled in 2024).
• "Create a smoothly integrated and beautiful solar-roof-with-battery product that just works, empowering the individual as their own utility, and then scale that throughout the world. One ordering experience, one installation, one service contact, one phone app."
• Develop self-driving capability that is safer than manual driving.

Although the jury's still out on whether the Cybertruck, Semi, Robovan, and solar roof will be commercially viable over the long term, Tesla has arguably met all of these goals besides self-driving capability, which is clearly still a work in progress.

A man with a very different plan

Master Plan Part 3 was released in 2023, at a dense 41 pages in length, and was more about a societal transition to sustainability than about Tesla as a company, which may be why Tesla decided to release Part 4 a mere two years later.

Unfortunately, while it was easy to summarize Part 1 and Part 2 into actionable benchmarks, Part 4 is long on sagely statements ("Growth is infinite," "Innovation removes constraints.") and short on specifics. However, investors might be surprised by the subject matter.

If you'd asked me what Tesla's new Master Plan would talk about, I would probably have said "new vehicle lines, including a $25,000 EV or maybe an electric van or larger vehicle; autonomous driving capability and robotaxis; maybe something about energy generation and storage."

Boy, would I have been wrong!

A man with a...humanoid robot?!

The "Master Plan" is just shy of 1,000 words long. Less than 200 of those words are devoted to Tesla's existing or future products, but 168 of those 200 words are about AI and autonomy, including 25 words about autonomous vehicles and 52 words about autonomous humanoid robots like Tesla's prototype Optimus. Meanwhile, "electric vehicles" are only mentioned once in passing outside of a recap of the company's history.

So...are electric vehicles really history at Tesla?

Musk clearly sees autonomous humanoid robots as the future of the company, posting on X that "~80% of Tesla's value" will someday come from them, but they're nowhere near delivery-ready. And in this arena, Tesla has a lot of competition from big tech players like Nvidia (NASDAQ: NVDA), plus many other startups and international companies as well.

It's OK to devote some planning (and hype) to future product lines. But when Tesla's primary business -- electric vehicles -- barely earns a mention in the company's "Master Plan," it raises concerns that this already-struggling division isn't getting the kind of attention it needs from management. And if Tesla's electric vehicle business collapses, it will take a lot more than a robot prototype to rescue the stock.

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John Bromels has positions in Nvidia and Tesla. The Motley Fool has positions in and recommends Nvidia and Tesla. The Motley Fool has a disclosure policy.