Tesla, Inc. Q3 FY2024 earnings call

• Vehicle Production: Tesla produced its 7-millionth vehicle, is on track to deliver more affordable models in the first half of 2025, expects 20-30% vehicle growth next year, and Cybercab is targeted for volume production in 2026 with a goal of at least 2 million units per year.
• Autonomy: FSD versions 12.5 and 13 show significant improvements in miles between interventions, with expectations of FSD being safer than human by Q2 2025. Optimus humanoid robot has advanced dexterity and tactile sensing.
• Energy Business: Strong demand for Megapack and Powerwall, with Lathrop and Shanghai factories scaling up production.
• Service and Other: Service centers are expanding, with efforts to solve issues at the source, improve software for diagnostics and remote fixes, and supercharging is growing with the increasing fleet size.

Automotive: Q3 had record deliveries with automotive revenues growing both quarter-on-quarter and year-on-year, though unit volume growth was accompanied by reduced ASPs due to financing incentives. FSD for Cybertruck and features like Actually Smart Summon contributed $326 million in revenues. China outperformed the U.S. and Europe in terms of performance. Automotive margins improved quarter over quarter but sustaining them in Q4 is challenging due to the economic environment. Energy Storage: The energy storage business is growing rapidly with strong demand for Megapack and Powerwall. The Lathrop Megapack factory reached 200 Megapacks a week (40 gigawatt hour a year run rate), and a second factory in Shanghai will begin with a 20 gigawatt hour a year run rate in Q1 2025.

• Expect vehicle growth of 20-30% next year.
• Cybercab is targeted for volume production in 2026 with a goal of at least 2 million units per year.
• FSD is expected to be safer than human by Q2 2025.
• Energy storage factories are scaling to reach 100 gigawatt hours per year and beyond.

• Regulatory hurdles for autonomous vehicle rollout, particularly in states like California.
• Economic uncertainties such as fluctuations in interest rates affecting automotive demand.
• Dependence on third-party suppliers for cell production, which could impact cell availability and cost.

Q: Is Tesla still on track to deliver the more affordable model next year as mentioned by Elon earlier? And how does it align with your AI product roadmap?

A: Lars Moravy states they are on track to meet the first half of 2025 timeline, aligning with the AI roadmap through robotaxis which lower initial EV costs.

Q: What is Tesla doing to alleviate long wait times at service centers?

A: Unidentified representative mentions solving issues at the source, expanding service centers, and using software improvements for diagnostics and remote fixes.

Q: Please provide an update on the semi. What will the next stage of growth look like, and when will FSD be ready?

A: Lars Moravy says progress is swift on the semi factory in Reno, with pilot builds in the second half of 2025 and production in H1 2026; FSD will be deployed on semi once the fleet is trained.

Q: When will Tesla incorporate X and Grok in all of the Tesla vehicles?

A: Elon Musk and unidentified representative mention expanding functionality in cars, with features like gaming and media applications being added.

Q: Elon mentioned unsupervised FSD in California and Texas next year. Does that mean regulators have agreed to it in the entire state for existing Model 3 and 4 vehicles?

A: Elon and Lars Moravy discuss regulatory pathways, noting California has a process but Texas is faster, with plans to roll out in California and Texas next year subject to approval.

Q: What is the plan for 2025?

A: Vaibhav Taneja and Elon Musk mention cheaper models, energy storage factory expansion, 4680 cell production, and lithium refinery start-up.

Q: What is going on with the Tesla Roadster?

A: Elon Musk says progress is being made on the Roadster, close to finalizing design, and it will be spectacular.

Q: Could you just detail how robotaxi will roll out? Will it start with a Tesla deployed fleet and then allow customers to add theirs on the subscription model, and we'll Hardware 3 capable of this?

A: Ashok Elluswamy and Elon Musk discuss working on Hardware 4 first, backwardating to Hardware 3, and ensuring safety drivers are used initially with plans to remove them when safe.

Q: Question about the relationship between Tesla and xAI. Many investors are still not clear how the work at xAI is truly beneficial to Tesla.

A: Elon Musk and Ashok Elluswamy explain xAI has helped Tesla with training and scaling, but they solve different problems, with Tesla focusing on real-world AI for autonomous cars and robots.