Call Participants:
Travis Axelrod - Head of Investor Relations
Elon Musk - CEO
Vaibhav Taneja - CFO
Ashok Elluswamy - Director of Autopilot Software
Lars Moravy - Vice President of Vehicle Engineering
Unidentified Company Representatives - Various roles within Tesla
Key Points Discussed:
Record Deliveries and Profitability: Despite industry-wide declines, Tesla achieved record deliveries and remains profitable, a notable achievement in the EV sector.
Energy Storage Growth: The energy storage business is expanding rapidly, with strong demand for Megapack and Powerwall.
Autonomous Future Vision: Tesla showcased its vision for autonomy with Cybercabs and Model Ys operating fully autonomously during an event.
Vehicle Production and Growth: Plans to deliver more affordable models in 2025, with expected vehicle sales growth of 20-30% next year, barring major external disruptions.
4680 Battery Cells: Progress in making the 4680 battery cells cost-competitive in the U.S.
Full Self-Driving (FSD) Developments: Significant improvements in miles between interventions; aiming for FSD to surpass human driving safety by Q2 next year.
Ride-Hailing and Regulatory Challenges: Plans to roll out ride-hailing services in Texas and California, contingent on regulatory approvals.
Energy Business Expansion: Lathrop Megapack factory reached a significant production milestone, with further expansion planned in Shanghai.
Service Improvements: Efforts to reduce service wait times and improve efficiency through software and structural changes.
Tesla Roadster and Semi: Updates on the Roadster and Semi production timelines, with the Semi expected to ramp up in 2026.
Prospects:
Tesla's prospects appear strong, given its continued profitability, record deliveries, and advancements in energy storage and autonomous technology. The company's focus on reducing costs and expanding its product lineup with more affordable models could drive significant growth. However, the success of these initiatives is contingent on overcoming regulatory hurdles and maintaining technological leadership in a competitive market.
Potential Red Flags or Areas of Concern:
Regulatory Challenges: The rollout of autonomous and ride-hailing services is heavily dependent on regulatory approvals, particularly in California.
Economic Environment: Sustaining margins in Q4 may be challenging due to the current economic environment and interest rate fluctuations.
Hardware Limitations: Concerns about whether Hardware 3 can achieve unsupervised FSD, with potential costs for upgrades if necessary.
Service Capacity: Despite improvements, long wait times at service centers remain a concern.
Balanced View:
While Tesla's growth and innovation are commendable, the company faces challenges in regulatory approvals, economic conditions, and service capacity. The ambitious goals for autonomy and energy expansion are promising but require careful execution and adaptation to external factors.
Summarized Questions Asked:
Is Tesla on track to deliver more affordable models next year?
When can we expect a $25,000 non-robotaxi model?
What is Tesla doing to alleviate long wait times at service centers?
Update on the Tesla Semi and FSD readiness.
Incorporation of X and Grok in Tesla vehicles.
Unsupervised FSD in California and Texas next year.
Plans for 2025 and the Tesla Roadster.
Rollout details for robotaxi and Hardware 3 capabilities.
Relationship between Tesla and xAI and its benefits.