Tesla

Tesla’s so-called “Master Plans” have been more or less the guiding principles behind how the company was run over the last two decades. It’s been the set of documents that the public could go back and read to see just how and why the automaker was committed to building more sustainable transportation. It was the rails that kept Tesla on track to what it once said was its ultimate goal: affordable electric vehicles for the world.

That mission has changed. It now seems like Tesla is officially more interested in building robots than cars.

Welcome back to Critical Materials, your daily roundup for all things electric and tech in the automotive space. Also on deck: Acrura is moving to an all-crossover lineup with lots of hybrids and BYD’s sales slip for the first time in five years. Let’s jump in.

30%: Tesla’s New ‘Master Plan Part 4’ Appears To De-Prioritize EVs

Photo by: Tesla

Tesla dropped its Master Plan Part 4 on CEO Elon Musk’s social media platform, X yesterday. But rather than tease some shiny new EV or tell the world how sustainable electrified vehicles need to be a focus, it instead published a glorified fluff piece on AI, robotics and something that it calls “sustainable abundance.”

Now, it’s not like the new plan ignores cars completely. It acknowledges Tesla’s roots in electric vehicles as a foundational springboard for the company. But what it doesn’t do is focus Tesla’s next chapter as a corporation on EVs. Instead, it’s putting the spotlight on products like Optimus and other software-driven solutions that use AI to solve the world’s problems.

Here’s the meat of Tesla’s pledge in its latest Master Plan:

This next chapter in Tesla’s story will help create a world we’ve only just begun to imagine and will do so at a scale that we have yet to see. We are building the products and services that bring AI into the physical world.

We have been working tirelessly for nearly two decades to create the foundation for this technological renaissance through the development of electric vehicles, energy products and humanoid robots.

Now, we are combining our manufacturing capabilities with our autonomous prowess to deliver new products and services that will accelerate global prosperity and human thriving driven by economic growth shared by all. We are unifying our hardware and software at scale, and in doing so, we are creating a safer, cleaner and more enjoyable world.

This is sustainable abundance.

If you’re confused about what Tesla is promising, you’re not alone. The X post is filled with users seeking clarification, since this plan has so diverged from Tesla’s typical format of listing clear goals. So we’ll try to do that instead:

• Expand AI-driven products and services. Tesla’s focus will shift towards building AI-powered tech like robotics and autonomous systems (like its Robotaxi platform).
• Unify hardware and software. Tesla wants to combine its manufacturing capabilities with its autonomous prowess (its words) to create new mass-market offerings. 
• Tesla has made it clear that it sees the humanoid Optimus robot as a way to make the company worth half of the entire S&P 500 (nearly $30 trillion).
• Tesla says developing and using autonomy should be done in a way that enhances “the human condition.” While Tesla doesn’t outright say how it will do this, it calls this out as a focus—potentially signaling that Full Self-Driving and Robotaxi will be foundational in the value of its vehicle products moving forward.

In case you need a refresher on Tesla’s previous Master Plans, Part 3 (published in April 2023) was about eliminating fossil fuels—it included a push for Tesla’s energy products, but really focused on the move to EVs in personal and fleet vehicles. Part 2 (published in July 2016) meant using the funds earned from Model S and X to build affordable vehicles that addressed “all major segments” and develop its autonomy platform that could enable the vehicle to make money for owners while they aren’t using it.

And the original Master Plan (published in August 2006) was all about how Tesla would use Musk’s influx of PayPal money to build a low-volume, high-performance car to fund a medium-volume, affordable EV and then use that money to build an even more affordable car.

So there’s not much mention of cars this time around at all, besides the overwhelming emphasis on making them autonomous. 

Now, let’s be clear that this doesn’t mean that Tesla is handing off the torch to some other automaker. It’s unlikely that Tesla will give up building EVs at all. However, the focus of Tesla’s latest Master Plan shows that the company sees the future of EVs as a vehicle to bring “products and services that bring AI into the physical world” rather than the company’s overall core product.

These “products and services” could be Full Self-Driving and Robotaxi. But those are still vehicle-adjacent. Tesla’s stale vehicle lineup, despite being recently refreshed, is weighing on its reputation as a leader in the EV space. It’s now clear that the automaker isn’t prioritizing vehicles in the same way that it did when it first launched the Model 3 and Model Y. Instead, it seems convinced that buyers will be influenced by Tesla’s functionality rather than a fresh fascia or reworked body lines.

If any other car company told you that it was pivoting from cars to robots, you’d start questioning what was going on at the top. But on the other hand, Musk has been laying the building blocks for this conversation over the last year. When he committed Tesla to being an AI company back in 2024, it was clear that EVs were a boring subject for him. The CEO was more interested in AI and elections—something now reflected in its sales figures and aging product lineup.

Maybe this is all smoke and mirrors for Tesla to mask the brand damage done over the past year. Or perhaps Tesla really meant it when it referred to the upcoming next-generation Tesla Roadster as its “swan song.” But Tesla’s problem is that it still drives its revenue from cars and car sales, so if it’s serious about these promises, it needs to make good on the product end of things—and soon. 

60%: Acura Goes All-In On Crossovers, Hybrids

Photo by: Acura

Honda’s premium arm, Acura, once brought the world performance treasures like the NSX, Integra and RSX. Now it’s on track to become a brand that exclusively sells…crossovers. Hold your excitement.

While a commitment hasn’t come from Acura directly, Automotive News points out that the writing is already on the wall as the automaker begins phasing out pretty much every nameplate that isn’t already a crossover today. For example, the TLX sedan ended its stint in July, leaving the recently revived Integra as the only sedan left in its lineup. And that’s expected to be discontinued in 2028.

Here’s the hedging from Automotive News:

Acura is slowing its transition into an all-electric carmaker and has decided to add hybrids to the lineup to bridge the gap for consumers who aren’t ready to make the EV leap. Honda Motor Co., the premium brand’s parent, said it will focus on expanding hybrid sales between now and the end of the decade, with Acura included in the gasoline-electric rollout.

While the Japanese automaker has a long history in hybrids, developing and introducing new electrified powertrains takes time, American Honda CEO Kazuhiro Takizawa told reporters during an August briefing in Monterey, Calif.

“When you change the powertrain and the crash test, we have to start from scratch,” Takizawa said. “We usually need four years or more to have the new vehicle, so it’s lead time we need to secure.”

The auto industry as a whole is in some weird kind of hurry-up-and-wait phase right now. Tariffs and global economic uncertainty have slowed the adoption of BEVs in the world’s second-largest automotive market (the U.S.), meaning that Honda’s push for the brand to equip itself with battery-electric powertrains has gone on the back burner. Acura, like most automakers, now needs to play it safe—and what safer way to go than hybrids and grocery-getters?

This move would position Honda with the likes of other premium crossover-only brands like Buick and Lincoln. And, to be fair, that does seem like a natural slot for Acura to be positioned in, given the target segment of buyers.

It’s also the way that we see other brands pivoting as they choose to follow in Ford’s footsteps in canning sedan-related projects. Nissan, for example, recently cancelled a pair of EV sedans destined for North America because nobody is buying sedans anymore (one of which was to be sold under its premium Infiniti nameplate). Volvo is quietly doing the same as nearly every sedan and wagon—sigh—wearing its marque is being killed off in North America.

Now, that’s not to say that Acura won’t put out anything fun in the near term. The Acura RSX is due soon, underpinned by Honda’s software-defined vehicle architecture that will be the building blocks of the Honda 0 Series. But it, too, will be a crossover.

This is probably a great move financially for Acura. America has an insatiable appetite for crossovers, and as the general public yearns for more hybrids, it could be a way for Acura to prop up sales against its biggest competition in the luxury space. Let’s see if it pays off in the long run.

90%: BYD Records Its First Consecutive Production Slip Since 2020

Photo by: BYD

BYD, the Chinese juggernaut that steamrolled past just about every other EV automaker out there, has hit its first serious speedbump in over half a decade. The automaker has officially hit its second monthly decline in production. That may not seem like a big deal, but it’s the first time that this has happened to the brand since July 2020.

The production slide comes after BYD’s New Energy Vehicles—that includes both hybrids and battery-electric vehicles—continued to slide year-over-year. That’s on top of the already concerning fall of its traditional gasoline-powered car sales, which are also down double-digits.

Reuters spills the beans:

The last time BYD’s production fell for two consecutive months was in June and July 2020.

Reuters reported in June that BYD, the biggest Chinese rival to Tesla was slowing its production pace by reducing shifts at some factories in China and had delayed plans to add new production lines.

Its sales in China, meanwhile, slid 14.3% year on year to 292,813 vehicles, down for a fourth consecutive month, even as global sales remained slightly up. BYD’s sales in Europe are growing fast, data showed on Monday.

China sales, however, account for nearly 80% of BYD’s total sales.

Monday’s data suggests the company has only met 52.1% of its yearly sales target of 5.5 million units in the first eight months. And some analysts have said that the company is unlikely to meet that target.

What’s going on here is a bit self-inflicted. BYD intentionally dialed back production as sales began to slip. And the cause of that slip is not believed to be completely organic.

See, BYD is one of those automakers accused of somehow selling zero-mile used EVs. The EVs were then reportedly sold to other countries as used, while initially being registered in China as new, meaning that the automaker received credit for selling a new car in its home market and the incentives that came along with it.

BYD began to cut back on production in June, according to Reuters. This meant eliminating shifts and delaying new assembly lines after Chinese dealers asked EV brands (not just BYD) to stop flooding the market with unsold inventory, which contributes to the zero-mile “used” car problem. And as a result, analysts at China Merchants Bank International say that they have cut BYD’s overall sales forecast for the year because it’s clear that the brand “has become more cautious about its inventories.”

The slowdown was inevitable. China might be the world’s largest EV market, but pushing it faster than the switch can progress has caused undue stress on the automotive industry. In fact, China’s EV industry is now investing more money elsewhere in the world (outside of its home market) for the first time ever—that could mean that China’s key industry players see that now is the time for the rest of the world to play catch-up, even if the U.S. isn’t willing to play ball.

100%: Where Are My EV Sports Cars, Darn It?

Porsche 718 EV Rendering

Photo by: Motor1.com

Okay, I get it. Crossovers and small SUVs are the future. You’ve made your point, EV industry. I’ll succumb when the Rivian R2 hits the market. But can we make a compromise?

I love EVs. I really do. But one thing I do miss is a fun two-door runabout that really screams “drive me.” Some sort of sick two-door EV sports car like the ones Porsche has talked about for ages. I don’t think it’s so much to ask for at least one manufacturer to build something cool for folks like me who just want an attainable electric sports car.

I know that this is a low-volume ask, but I need to know that I’m not alone here. Are there any sports car platforms that you’d love to see electrified today? Let me know about your dream EV sports car in the comments.