Tesla, Inc. Q1 FY2025 earnings call

• Autonomy: Laser focused on robotaxi launch in Austin by June, with unsupervised autonomy for Model Y in Austin first. Generalized AI solution for autonomy, not city-specific. • Optimus: Making good progress, expecting thousands of robots in Tesla factories by end 2025, aiming to scale to millions per year. • Energy: Energy business doing well, Megapack enabling grid stability, Powerwall 3 in supply constraint. • Q1 Factory Transition: Successfully transitioned all factories for new Model Y despite Q1 being traditionally slow for car sales. • Supply Chain: Localizing supply chains in North America, Europe, and China to mitigate tariffs and supply chain risks.

Auto margins declined sequentially due to reduced deliveries, lower fixed cost absorption, and lower regulatory credit revenues, offset by slight pricing increase. Energy storage business achieved record gross profit in the quarter despite sequential decline in deployments. Auto had over 85% USMCA compliance in vehicle lineup, while energy storage sources LFP battery cells from China with efforts to localize.

• Robotaxi: Expect to sell fully autonomous rides in Austin in June, with material financial impact expected mid-next year. • Optimus: Aim to have thousands of Optimus robots in Tesla factories by end 2025 and scale to millions per year soon. • Financial: Autonomy's financial impact to be significant mid-next year, leading to exponential growth thereafter.

• Supply Chain: Dependence on global supply chains, especially for rare earth magnets in Optimus, affected by export regulations. • Tariffs: Section 232 auto tests impact profitability, especially on energy business sourcing LFP cells from China. • Robotaxi Rollout: Challenges with long-tail edge cases and validating safety for large-scale deployment.

Q: What are the highest risk items on the critical path to robotaxi launch and scaling?

A: Focus on burning down long-tail unusual interventions, solving reliability issues of autonomy and system software, and addressing location-specific challenges like snow, fog, etc.

Q: When will FSD Unsupervised be available for personal use on personally-owned cars?

A: Before the end of this year, with confidence it will be available in many US cities by then.

Q: Does Tesla see robotaxi as a winner-take-most market?

A: Teslas are cost-effective and high-volume compared to competitors like Waymo, with a pure AI solution using cameras having an edge.

Q: How is Tesla positioning itself to flexibly adapt to global economic risks and tariffs?

A: Regionalizing part supply factories in North America, Berlin, and Shanghai, with high local content in vehicles and efforts to localize battery supply.

Q: Could you confirm if Tesla Optimus pilot line is currently operational?

A: Optimus is a development program, expecting thousands by end 2025, facing challenges like rare earth magnet supply chain issues from China.

Q: Thoughts on FSD pricing and multi-tiered approach?

A: Considering multi-tiered pricing, with current FSD pricing seen as too cheap given the value, and gradual relaxation of supervision requirements.

Q: Views on tariffs and their impact?

A: Advocate for lower tariffs, but President decides, with tariffs impacting profitability, especially on energy business and supply chain.