Tesla, Inc.
CEO : Mr. Elon R. Musk
Quarterly earnings growth(YoY,%)
| Period | Revenue | Operating Income | EPS | Release Date |
|---|---|---|---|---|
| 2023 Q2 | 47.2% YoY | -2.6% | 16.4% | 2023-07-19 |
Elon Musk says,
Record Q2 Performance
- Tesla achieved record vehicle production, deliveries, and revenue of $25 billion in Q2.
- Model Y became the bestselling vehicle globally in Q1.
- Operating margin was approximately 10%.
Production and Delivery Targets
- Tesla aims to deliver 1.8 million vehicles in 2023.
- Q3 production may decrease slightly due to factory upgrades.
Autonomy and Neural Net Training
- Tesla believes autonomy will drive vehicle volume significantly.
- Massive amounts of training data are crucial for AI success.
- Tesla has a unique advantage with its large fleet collecting training data.
- Dojo training computer is designed to reduce neural net training costs.
- Tesla expects to reach a neural net training capability of 100 exaflops by the end of next year.
Full Self-Driving (FSD)
- Over 300 million miles have been driven using FSD beta.
- Tesla envisions FSD being 10 times safer than human driving.
- Tesla is at the cutting edge of AI development with Autopilot, Dojo, and inference hardware.
Cybertruck and Design
- Release candidates of the Cybertruck are being built in Austin.
- The Cybertruck has four doors over a six-foot bed and fits into a 20-foot garage.
- The exterior dimensions were carefully designed to maximize utility.
Charging Network and Openness
- Tesla’s Supercharging network has over 50,000 connectors and 5,000 locations.
- Ford, GM, Mercedes, and other OEMs have adopted Tesla’s charging connector and network.
- Tesla is open to licensing its FSD software and hardware to other car companies.
Overall Outlook
- Tesla aims to make as many cars as possible while maintaining healthy financials.
- Other businesses like Megapack and Supercharging are becoming more profitable.
- Tesla acknowledges the hard work of its employees during uncertain times.
Zachary Kirkhorn says,
Record Quarter and Profit
- Tesla had another record quarter of production and deliveries, as well as records in profit for their energy and services and other businesses.
Financial Approach
- The primary priority is to invest heavily in core technologies, such as AI related technologies and new products like Cybertruck, the next generation platform, and the Semi.
- Continuing investments in capacity expansion, including vehicle factories, Supercharging network, service, internal applications, and battery processes.
Maximizing Volumes and Cost Reduction
- Working towards maximizing volumes in both the vehicle and energy business while generating capital for R&D and capital investments.
- Focusing on per unit COGS reductions in key businesses and working capital improvements.
Automotive Business
- Modest reduction in gross margin but remained healthy.
- Realized per unit cost improvements in material cost and commodities, manufacturing costs, and logistics.
- Rapidly increasing the build rate in the Austin and Berlin factories.
Energy Business
- Improved margins and gross profit driven by cost reductions and deal economics, particularly with Megapack.
- Storage volumes are typically volatile sequentially based on project types and revenue recognition milestones.
Q3 Volumes and Factory Upgrades
- Q3 volumes expected to be impacted by planned downtimes for factory upgrades, which may result in factory idle costs.
- Working to minimize factory idle costs as much as possible.
Macroeconomic Uncertainty
- Uncertainty in the macro environment can impact execution positively or negatively in the near term.
Q & A sessions,
Tesla-designed actuators
- Tesla has designed its own actuators that integrate motor, power electronics, controller, and sensors
- These custom-designed actuators are lighter, tighter, and more capable than any other in the world
- They are also manufacturable for volume production
- The first Optimus with Tesla-designed actuators is expected to be ready by November and will be used for testing in Tesla factories
- Potential applications include assisting people with disabilities by combining a Neuralink implant with a robotic arm or leg
Demand and production
- Tesla aims to closely track demand and production in real-time
- During times of economic uncertainty, people generally pause on new car buying
- Interest rate environment affects the affordability of cars bought with debt
- Tesla adjusts course based on the mood of the public and interest rate changes
- No crystal ball for the global economy, so uncertain about the future
Dojo and AI training
- Tesla plans to spend over $1 billion on Dojo, its custom silicon for video training
- Dojo is designed to optimize video training for achieving a generalized solution for autonomy
- Training models for self-driving cars require a staggering amount of data and compute power
- Tesla believes other AI companies focusing on language models struggle with self-driving because of the complexity involved
- Tesla will continue to use NVIDIA hardware and has respect for the company
Full Self-Driving (FSD)
- Elon Musk believes Tesla will achieve full self-driving capabilities better than humans by the end of this year
- This is not a guarantee of regulatory approval, and the focus will be on the U.S. market initially
- Musk acknowledges his previous optimistic predictions on FSD, but still believes in its potential value
- The price of FSD is considered low compared to the increased value it brings to the car
- There is also an option for a monthly subscription for FSD
xAI and talent acquisition
- Tesla’s xAI initiative focuses on AGI (artificial general intelligence)
- xAI aims to attract some of the best AI engineers and scientists who prefer to work in a startup environment
- The presence of SpaceX alongside Tesla has helped attract top talent
- The xAI team is expected to bring value to Tesla’s operations
IRA manufacturing incentives and commodity improvements
- Tesla expects IRA manufacturing incentives to be in the range of $150 million to $250 million per quarter
- This includes a sharing of credits for qualified cells with Panasonic, Tesla’s long-term battery partner
- Commodity improvements, particularly in lithium, are being realized and will be reflected in financials
No bad stock 