💰Tesla Earnings Call: Hit or Miss? 📉📈 Stock Soar or Sink? 🚀🤔

Summary

InvestAnswers hosted a live stream to discuss Tesla's Q3 earnings. The panelists, including notable Tesla enthusiasts and investors, expressed a mix of surprise and excitement about the earnings results. Despite a drop in revenue, Tesla beat expectations on other key metrics, showing a positive outlook for the company's energy business and autonomous vehicle technology. The call revealed notable progress in areas like AI and manufacturing efficiency, with plans for scaling production and pushing forward with autonomy, making the future look promising for Tesla.

Highlights

• Tesla announced its Cybertruck production has reached profitability ahead of schedule 🚀
• The energy segment delivered record margins, suggesting the potential for a trillion-dollar market cap 💰
• Elon Musk confidently projected a 20-30% vehicle sales growth for next year 🚗
• Significant FSD advancements were highlighted, with technology said to soon surpass human driving safety 📉
• Plans for large-scale rollout of autonomous robo-taxis in Texas and California were discussed, pending regulatory approval 🚖

Key Takeaways

• Tesla beat expectations with a significant earnings per share increase of 21.5% 📈
• The company's energy business reported record margins, signaling strong future growth potential 🔋
• Cybertruck production reached profitability faster than anticipated, demonstrating cost-efficiency 🚛
• FSD take rates increased following recent technological showcases, showcasing growing trust in autonomy 🚗
• Elon Musk hinted at significant future milestones for Tesla's autonomous driving and manufacturing capabilities, boosting investor confidence 🤖

Overview

The recent Tesla earnings call, hosted by various experts and investors, provided a pulse-check on the company's performance and future outlook. Despite missing revenue expectations, Tesla posted strong EPS results, owing largely to its advances in efficiency and comprehensive cost management. The session highlighted the company's strategic focus on autonomy and energy solutions, making it a formidable player across multiple industries.

Earnings reflected robust performance in the energy sector, with Tesla's Mega Pack and Powerwall products underpinning significant margin improvements. As Tesla gears up to exceed its current production capabilities, experts project an expanded impact on the global energy market. The session stressed Tesla's vision in challenging conventional automotive norms, shifting towards a more sustainable and autonomous future.

Elon Musk's address during the call reaffirmed Tesla's growth strategy through advancing technology and scaling production. His bold claims about future sales and further improvements in autonomous driving drew excitement and validation from investors. The call closed on an optimistic note, as attendees looked forward to how these developments could reshape both transportation and energy sectors.

Chapters

• 00:00 - 00:30: Introduction In the introduction to Tesla's Q3 earnings live session, several contributors are introduced, including James from Invest Answers, EMT, and Nico. Although Farzad, a regular participant, is absent due to his anniversary, other guests like Matt Smith and Yashu are expected to join later.
• 00:31 - 05:36: Hans hosts a panel discussion on the Tesla earnings call live. The chapter opens with Hans preparing to host a live panel discussion on the Tesla earnings call, emphasizing the significance of the event and the expertise present to discuss it. EMT, one of the contributors, is put on the spot first to share expectations regarding the shareholder letter about to be received, suggesting anticipation of specific financial updates and narratives reflective of Tesla's performance.
• 05:37 - 07:36: Hans comments on mass delivery and that the regular automotive companies aren't profitable. In this chapter, Hans discusses the impact of the 'Wii robot event' on expectations for Tesla's earnings. He notes how the excitement from the event was overwhelming, causing him to forget about Tesla's quarterly earnings announcement, which he usually marks on his calendar. Hans mentions there are low expectations for any significant outcomes from the earnings report, referring to it metaphorically as a 'nothing burger.' The chapter closes with a hope for updates or progress on the next vehicle.
• 07:37 - 22:30: Panel members share mixed expectations and thoughts on trading. The chapter discusses mixed expectations among panel members regarding trading, specifically around potential surprises in the Model Y refresh in Q1 of next year. Some panelists are optimistic about unexpected good news, which may present upside potential. Additionally, there's mention of a small trade being made related to earnings.
• 22:31 - 29:26: Likely sentiments from the online Tesla community that aligns well with panel members sentiments. The chapter discusses personal investment strategies specific to the Tesla community, highlighting the use of call options within a portfolio. The speaker describes their own approach as conservative, utilizing a tiny percentage of their portfolio (0.01% to 0.1%) for call options, which are further kept in an IRA account to utilize extra cash. They reference weekly call options with specific strike points ($230 or $235) and explain the short-term nature of these investments, indicating a speculative, yet controlled, method of investing.
• 29:27 - 41:16: Tesla earnings expectations and exploration of sentiments from Tesla community. The chapter discusses expectations around Tesla's earnings report and explores the sentiments within the Tesla community. It begins with a hopeful tone about potential market movements following the earnings report and acknowledges a gap since the last significant change. The conversation is then directed to Nico, who resonates with Emo's earlier comments, hinting at a broad consensus in the Tesla community.
• 41:17 - 48:36: Hans, Matt & Panel talk about Tesla reports/margin. The chapter discusses a general sentiment of neglect or lack of urgency among analysts or commentators such as Yosu, Larry, Herbert, and Emmet in calculating or figuring out the quarterly numbers for Tesla. This indicates a shift in focus or change in priorities within these financial or analytical circles, reducing the emphasis traditionally placed on these quarterly figures.
• 48:37 - 58:36: Panel previews of questions they want asked at the Tesla Earnings Call. The chapter discusses the panel's focus on future advancements in Robotics and autonomy during the Tesla Earnings Call. It mentions the importance of generating revenue to fund future projects but highlights a shift in focus towards robotics and autonomy. The chapter suggests that this focus will be reflected in the expert analyst questions during the call. There is also a brief mention of the speaker's approach to trading, indicating a preference for avoiding binary events.
• 58:37 - 83:36: Discuss cybertruck margins and Tesla references retail & other segment domination. The chapter discusses strategies for trading around binary events, with emphasis on selling calls that have yielded profits. The current position is to hold only stock, anticipating minimal significant movement ('nothing burger'), suggesting limited volatility in the market. Comparatively, current expected moves are less volatile than previous situations involving 'Wii robot'.
• 83:37 - 102:36: Discuss other topics of interest such as Mega Packs, AI compute & Tesla semi-notch. The chapter discusses various topics of interest related to the technology and automotive industry. It begins with a comparison of Ivy rank to Wi Robot, highlighting a decline in Ivy rank to around 94-96, which is noted as an interesting development. The conversation also includes a welcome to James from the Invest channel, mentioning his co-streaming activities and potential new viewers joining this discussion, indicating a crossover of audiences between different platforms. The chapter promises to explore topics such as Mega Packs, AI compute, and the Tesla semi-notch, although the transcript does not provide further details on these subjects.
• 102:37 - 114:16: Panel discusses sales and emerging positive media campaigns for the company. The chapter discusses the anticipation and trading strategies related to company's earnings report. Panelist James shares his expectations and reflects on a past trading scenario involving put options and the release of a re robot. He recounts nearly purchasing a large number of put options that could have significantly impacted his portfolio.
• 114:17 - 120:56: Discussion on thoughts of CEO, Elon Musk, globetrotting. The chapter provides a discussion on the thoughts of Tesla CEO, Elon Musk, as he shares his expectations and reflections on the company's financial performance. The conversation emphasizes the company's experience during an earnings call, where significant financial figures were contemplated, although not achieved as expected. Musk points out that despite numerous missed targets, the market typically takes some time to digest the results from earnings calls. The discussion highlights the challenges faced and reflects on the rollercoaster nature of the company's financial journey.
• 120:57 - 142:36: Repeat panel review of Tesla's latest financial statement & earnings. The chapter discusses Tesla's recent financial performance and earnings, highlighting the rarity of Tesla missing earnings in consecutive quarters. It notes that despite the previous quarter's revenue beat, current expectations from both retail and institutional analysts remain pessimistic. The narrative suggests that when consensus is overwhelmingly one-sided, there might be room for contrarian surprises.
• 142:37 - 167:36: Panel dig into release of FSD - Full self driving armour and thoughts about autonomous driving systems in general. The chapter delves into the release of Full Self-Driving (FSD) technology, examining its impact and the overall landscape of autonomous driving systems. It highlights a discussion around the market's reaction to FSD's release, with particular focus on a slight increase in stock prices towards the close of a trading session. The sentiment expressed suggests a preference for a different market response pattern, wishing for a sell off before anticipated earnings announcements. The chapter invites additional insights or corrections from the panel, marking a collaborative inquiry into interpreting the market's mixed signals regarding FSD's rollout.
• 167:37 - 188:26: Slight deviation from core subject into talking about FSD autonomy upgrade from hardware. The chapter discusses deviations from the core topic to focus on FSD (Full Self-Driving) autonomy upgrades from hardware. It touches on financial investments in AI and new vehicle developments, emphasizing the significant investment in technology like Cyber Truck Cortex, illustrating the scale of ongoing advancements in automation and electric vehicles.
• 188:27 - 198:26: Discussion on the market's & investors' perception of Tesla's growth. The chapter discusses how Wall Street and investors perceive Tesla's growth, with a particular emphasis on their focus on gross automotive margins and earnings per share (EPS) as primary indicators of performance. The discussion highlights that other significant factors, referred to as 'elephants in the room,' are often overlooked. The speaker appreciates the information shared, particularly charts and metrics related to earnings estimates, which are useful for deeper analysis and understanding.
• 198:27 - 207:36: Panel previews of state and federal compliance for autonomy. The chapter discusses the anticipation and strategies regarding state and federal compliance related to autonomous driving technologies. The conversation hints at potential insights into the increasing take rates of full self-driving technology, which could act as a significant catalyst for the industry. The narrator intends to first examine the Outlook section of the earnings report for vital information. Additionally, there is an element of preparation and anticipation as they mention a 'bingo card' referring to key events or announcements expected during the earnings report release, anticipated in about 10 minutes.
• 207:37 - 219:16: Tesla reveals future strategy and roadmaps interface innovations. The chapter discusses Tesla's strategic plans and innovation in its roadmap. It highlights the expectations from Tesla's guidance on future directions rather than just focusing on the immediate results. Key updates include progress on the Tesla Semi and developments at the Gigafactory in Nevada, as well as insights into the robotaxi advancements in Texas and California.
• 219:17 - 240:06: Panel questions on autonomy in California & reportage data compilation issues of data optimization. The chapter discusses ongoing panel questions regarding autonomy in California, particularly focusing on issues surrounding the optimization of data reportage. There is mention of significant advancements such as cortex cooling becoming operational, which seems to be an overlooked achievement. The narrative gives a nod to an individual named Joe Tagm who recorded a related video. Wall Street's interest is narrowly fixed on the anticipated release of a $25,000 car, referred to as Model 2.5. Additionally, there is confirmation that the Juniper Model Y is already in production, and sightings have been reported, though it's unclear if any visual materials are AI-generated or authentic. Furthermore, development continues on other projects, including the Roadster, and there is considerable yet unannounced progress concerning 'Optimus.' However, the chapter concludes by acknowledging that the progress in these areas has not been without criticism, with some doubters downplaying the advancements made so far.
• 240:07 - 270:56: Tesla energy business's outlook and future. The chapter explores Tesla's energy business outlook and future with reference to new technological advancements such as Optimus updates and unsupervised Full Self-Driving (FSD). It highlights the real-life application and effectiveness of these technologies through personal experiences, like a two-and-a-half-thousand-mile trip in a Cybertruck, emphasizing their potential impact and life-saving capabilities.
• 270:57 - 299:16: Panel discussion on Tesla's future and other general comparisons with other motor companies. The chapter features a panel discussion focusing on Tesla's future, particularly the mega pack business. The panel predicts that by 2026 or 2027, the mega pack business alone could be worth a trillion dollars. They also mention significant progress in Tesla's CeX efforts, including improvements in cooling, which are deemed as major future developments for the company.
• 299:17 - 304:16: Closing remarks and highlights of the current financial quarter performances. The chapter discusses the impatience or misunderstanding surrounding the delayed progress of Cortex as compared to the X Colossus cluster. The speaker explains the complexity involved in video training, highlighting it as more challenging than standard large language model (LLM) training. Nevertheless, there is an anticipation for updates or guidance on the development of Cortex, along with any additional commentary.
• 304:17 - 345:06: The team continues to discuss a summary of earnings and digress into Elon Musk politics. The team is engaged in a discussion about earnings, focusing on the significant impact and capabilities of the Cortex project. They recognize its potential to outperform others, drawing parallels to the XCI team's success with the rapid deployment of Colossus. The conversation briefly veers into the realm of Elon Musk's politics.
• 345:07 - 410:06: Team returns back to market perception and profits over competition. In this chapter, the focus is on how the team is reevaluating market perception and prioritizing profits over competition. They discuss the return on investment (ROI) of their AI technologies, particularly highlighting their superiority as the fastest in the industry compared to giants like Microsoft and Meta. Within this context, there is a specific emphasis on leveraging Tesla's capabilities and the potential of the cortex technology, especially in areas like video training, where their competitors appear to be lacking.

💰Tesla Earnings Call: Hit or Miss? 📉📈 Stock Soar or Sink? 🚀🤔 Transcription

• 00:00 - 00:30 Hans we are live today for Tesla's Q3 earnings and I have with me James from invest answers I have EMT and I have Nico we'll also probably be seeing a little bit of Matt Smith and yashu at some point today we are without Farzad at this point in time he may drop by briefly but today is his anniversary and so he is doing the uh all important anniversary duties instead of joining us
• 00:30 - 01:00 um but we've got some great knowledge in the house to help you all process the Tesla earnings today whatever may be and uh I'm excited for this so um yeah here EMT since you just dropped in last we'll put you on the spot first what are your expectations uh for the shareholder letter that we're about to get yeah um first you can hear me okay yeah okay yeah I mean I think there's very low
• 01:00 - 01:30 expectations across the board I think we're all kind of hung over from the Wii robot event I don't know about you but normally I like black out Tesla earnings day on my calendar and this is the first quarterly earnings I can remember where I forgot to do that just because I was just like so hung over from the Wii robot event and trying to process all that information and digest it and um so I don't think there's really any any expectation for earnings I feel like most people think it's just going to be a nothing burger and we just kind of move on hopefully the next vehicle we
• 01:30 - 02:00 get news about in you know q1 next year the model y refresh we'll learn about more then so forth so I kind of feel like there might be upside potential that no one's expecting if there is anything any kernels of uh you know unexpected good news coming out here that's my feeling so do you have any little trades on for anything around earnings uh it's funny I just put a a tiny trade on just to buy some uh weekly
• 02:00 - 02:30 call options uh you know sometimes I really small it's like 0.01% of my port you know 0.1% of my portfolio it's not it's it's less it's just tiny just a couple of call options just with some extra cash in my IRA account just sitting there so we'll see it was just the weekly calls for I think it was 230 or 235 strike so Friday you know just two days out it was like a dollar or something I think or $2 doar or something for the contract little 10%
• 02:30 - 03:00 move yeah we haven't had that nice move for a while it feels like in ears reports and you know we'll see if this one will be one but it's probably just money thrown away but uh we'll see awesome we we'll go Around the Horn uh Nico how about you um yeah so uh I just to Echo what emo saying you know it sounds like uh across the board uh in the Testa Community
• 03:00 - 03:30 everybody has just kind of Forgotten or not been in a hurry to figure out what their numbers are for this quarter whether it was yosu or Larry or Herbert obviously emit here um you know I've just heard everybody say kind of the same thing like yeah I haven't done my numbers yet which I think is very interesting I think it's part of kind of this paradigm shift into not really putting too much focus on on each
• 03:30 - 04:00 quarter earnings obviously we need to be making some money to fund the future but uh I think the more than 50% of the shift of mindspace has moved into the future of Robotics and autonomy uh now so I think that's where the focus is I think that'll you'll see that echoed with the uh expert analyst questions uh as far as trades um I I very rarely do any kind of uh binary events so I like
• 04:00 - 04:30 to trade before or after uh the binary events so I closed out a whole bunch of sold calls uh that printed really nicely today so uh yeah so now I have nothing but stop the way I like it and I think it's G to be a nothing Burger other than I think we have more room to the upside and downside so I think uh and honestly if you look at the expected move it's really a lot less than what even Wii robot was and you
• 04:30 - 05:00 know even if you look at like Ivy rank it's it's not that high compared to Wi robot we were at like 94 96 like that so it's actually kind of come down a lot so it's interesting yeah then welcome James we have you here are you co- streaming this on your channel as well am I am have many of your your viewers are joining us probably for the first time and then for uh fars ODS viewers this is James from invest if you don't know him super
• 05:00 - 05:30 excited to have him with us today to digest earnings with and yeah so James what are your uh expectations for today and yeah any trades you have on it's funny EMT said The Hangover from we robot uh I remember the day before re robot it was like five minutes before Clos the market on 1010 and I was going to buy a rake load of 250 put options that were expiring the next day they would have cost me $9 and I was about to put that position on said you know what
• 05:30 - 06:00 I think it's going to be special and I was wrong so that would have been you know $9 to $ 3235 very overnight pretty quickly anyway that didn't happen but I do have a slide to share here one of the things that is interesting is it's the first time we have an earnings call where we're already beaten down pretty badly and normally it takes the market about two weeks to digest the goodness from an earnings call or a huge event like we robot now the first thing I'd like to show is this the earnings you can see we've missed missed missed Miss it's
• 06:00 - 06:30 very rare that Tesla misses four in a five in a row so that's first positive last quarter we did have a beat on Revenue which was good and then when we look at let me see I've got some uh retail analyst expectations and a couple of institutionalsales are all very pessimistic which means when everybody expects the same thing people can sometimes be wrong and I think I have uh
• 06:30 - 07:00 another slide as well regarding kind of what we can expect during the coal but that's where we are the other thing is kind of interesting is looking at the chart the chart we had a little bit of a pump into the close which I wish didn't happen I'd rather it sell off to the Clos and pump during the earnings call so that is kind of how I am interpreting the very mixed signals out there wondering if anybody has anything to add to what I said or am I off base I will add that Matt who should be here at some
• 07:00 - 07:30 point in the near future his estimate is also 58 cents so in line there with James cat yeah James Cat's pretty good and AJ as well AJ is very bearish which gives me puls but but at the same time is what we have to consider the amount that they are investing right now in Ai and all the new vehicles and ramping cyber truck cortex I mean it is insane how much they are laying out and that's what a lot of
• 07:30 - 08:00 people at least the wall streeters kind of get confused they just look at gross Automotive margins and EPS because that's the most important thing while ignoring all the other elephants in the room so just my thoughts this is great info James thanks for sharing those charts and and this uh metric right here visually of the earnings estimates yeah it's uh good to just put these numbers to paper here and look at it and I yeah I mean I think um if there's
• 08:00 - 08:30 any inkling of like maybe they give some info on full self-driving take rates increasing or something like that that would be a think helpful um perhaps a helpful Catalyst um definitely I'm going to look at the Outlook section of the earnings report first that's where I'm gonna like skip to right before I look at anything else I think exactly and I also have a bingo card that we could talk about because the deck is coming out in about 10 minutes I reckon 11 minutes but uh one of the other things that's kind of interesting to consider
• 08:30 - 09:00 wondering what you think these are kind of the big issues for me what I would be hoping to hear about on the guidance not the results but the most important thing in these calls is where the puck is going next so Tesla semi update how are things going in Nevada uh in Sparks whatever they're building that big Giga Factory um the big thing that fell on DEA ears during the wi robot event was robot taxi U unsupervised in Texas and California next year and we had the Poo Alto news this week as well which was
• 09:00 - 09:30 huge uh cortex cooling is now operational which is big but nobody will ever pick up on that uh shout out to Joe tagm as well who videoed that this morning uh model 2.5 that's the only thing that Wall Street cares about when is a $25,000 car coming and then Juniper model y production is in production it's been seen in the wild uh Roadster I think I've seen visions of that but I don't know if it's AI created or not and then Optimus a lot of good stuff is happening behind the scenes there was a lot of criticism that oh it was
• 09:30 - 10:00 teleoperated but at the same time a few days later they launched the Optimus update climbing stairs and navigating itself and thinking for itself which is kind of powerful unsupervised FSD will be huge I just did nearly two and a half thousand miles in eight days in the Cyber truck I was blown away and it probably saved my life as well in one instance that I can say for a fact I got to pump up that video as well of a deer running out in front of me in yose and then me mega pack
• 10:00 - 10:30 updates like by my math in 2026 2027 the mega pack business alone is worth a trillion dollars so that's the bingo card anything to add or did I miss anything here so you got a lot of stuff to me I mean I can't think oh Nico can you think of anything or Hans yeah I mean the the CeX progress overall um in addition to cooling I mean that's that's that's going to be huge um
• 10:30 - 11:00 you know I think a lot of people are wondering why is cortex taking longer than the X Colossus uh cluster to get up and running I don't think they appreciate how difficult video training is compared to just standard llm training um so I don't think that that concern is Justified but I'm looking forward to hearing guidance uh from them on getting cortex fully up and running and yeah any commentary that they have
• 11:00 - 11:30 around that is it's huge I mean just thinking about the the significance of what cortex is and what it's going to be capable of and you know the fact that I mean we've already seen how incredible it was for the the xci team to get Colossus up and running so quickly and if they can basically outperform any other team with respect to Bringing training online that means
• 11:30 - 12:00 the the ROI on their AI Investments are the fast you know XIs will be the fastest in the industry in comparison to to Microsoft or um llms through meta and transferring that to Tesla and thinking about the implications of what cortex is going to be capable of like you know because they don't even have anyone that's trying to train on video
• 12:00 - 12:30 data at the same scale that uh Tesla is and so for them to have that type of lead where no one else is even in the race uh just I really think this is the most important thing that 90% of even people who are interested in Tesla are just like sleeping on yeah and Hans I think you should take use your AI brain to take this one step further and explain to the audience how significant this is especially for things like an FSD OEM deal and talk a bit about the insurmountable
• 12:30 - 13:00 moat that they have around data and now infrastructure as well I think Wall Street missed that completely um I think retail investors don't understand the importance yeah well actually I'm curious to hear I mean I have a a point of view on um on cortex and how Innovative and and difficult that challenge is but Nico's probably an even better person than I am to talk about like what is the difference um in the
• 13:00 - 13:30 architecture and the capabilities of Cortex compared to you know something like Colossus yeah I I gota be a little bit care careful on what I say given where I work um but I I will say you know just kind of touch on that point we're about to get the earnings out here in a second um I think a great point is brought up is everyone you know had lots of criticism about Optimus being somewhat human operating to what degree we don't
• 13:30 - 14:00 know or even FSD when people say it's not perfect all these things yet the question is okay you can have your criticism and they're Fair because what you're saying is not inaccurate but my question is okay well then who's behind them who else is doing something different or better and until you can see that until you know who that is till you can name someone it's pretty it's a pretty big deal that there is no one else out there um whether it's on building out the clust I mean even none of the hyperscalers are building out
• 14:00 - 14:30 clusters the way um xai and Tesla are uh with regards to data you mentioned no one else is is doing remotely weo has what 700 vehicles to Tesla's Millions um Tesla is the only one that actually are we losing Nico can you see me can you hear me yep hear you oh that's unfortunate for you guys uh
• 14:30 - 15:00 anyways um as far as the list that you had up there James I really hope I'm leaning hard on the analyst today to ask probing questions about the launch in Texas and California I would love for them to ask nuanced questions that I think that Tesa will probably or would be more likely to answer the not such as when you said that do you mean Austin pal Alto Austin San Fran or do you mean the state and
• 15:00 - 15:30 when you say that do you mean unsupervised as in nobody's in the driver's seat or because they're three and y s and X they're still still in the driver seat but they don't necessarily have to be involved for a certain period of time right like th those are like some really interesting Nuance questions and then something else that I would like to know is we don't know when you guys are going to hit the point where hey we could say Victory we got it let's go Robo taxis right we don't know we
• 15:30 - 16:00 don't know what we don't know yet it's like Elon said many times going up that hill uh and that mountain then all of a sudden you realize oh there's another mountains even higher to climb but with that said I'd be interested to know what are the metrics what are the kpis that they have internally to to determine at what point the does the risk reward scale tip in favor of okay it's time to actually do this right because there there's a point there where it's it's almost unconscionable at a certain point
• 16:00 - 16:30 not to put this out because it might get into an accident every one in 10 million miles 15 million miles versus not having out there and you know I mean that's a hard one right to to really put your thumb your thumb on because people are less empathetic about a car versus a human but you know math is math and if you can reduce the total deaths out there I mean I literally just saw a horrible accident just the other day and it's it's hard to see these things and not think about FSD immediately but
• 16:30 - 17:00 those are things I'm interested in you're dead right and one of the things a lot of people through fot at Tesla is like they're never going to proove it but you have to realize right now we're living in this very AI driven disruption oriented world and cities that want to brace Innovation for their own rep sheet will allow this to happen that's why Pao Alto I think is making the first move and Elon could do whatever he wants in Texas the roads there are a lot simpler to drive on than place like San Francisco and Los Angeles and Boston for
• 17:00 - 17:30 example um so yeah it's a very good point there but I think it's going to roll out and I think they are 99% the way they with unsupervised and we haven't even seen version 13 yet so I think they have a lot of things up their sleeve and the AI team has executed flawlessly so far in the month of September or was it October September months ago in buy so fast anyway just Bonkers but this is kind of like my second list of the the investor questions I would like to see asked and
• 17:30 - 18:00 drilled into as well um and some of them you're probably very familiar with and some of them you guys touched on I can tell you number three is not happening oh something came out it's printing it's moving around we don't see it yet it's on the Dow Jones newswire but the Stock's moving up fast there you go by the way never before has Tesla stock Fallen five days in a row going into an earnings report so maybe but sometimes maybe this a stick sometimes reverses yeah
• 18:00 - 18:30 but we'll see right 220 226 yeah we're pumping we probably have to hit F5 for another five minutes before we can see it F5 F5 I don't have an F5 in the MC or whatever F2 I don't know whatever yeah that's good news everybody got got it and their alos are acting on it already so now I'm very glad I didn't buy those puts today I was looking at the puts for Friday and they were the 25s were 10 bucks so you'd need two to break even
• 18:30 - 19:00 almost so well you never know I mean even in the wi robot event uh the stock was up to like 255 in the beginning and then by the end it went down to it went down but so it might start out high and then come back down it's hard to say we'll see yeah I I can share a real time chart actually on the one second Tesla three 3Q gross margins 19.8% estim 16.8 adjusted earnings per share 72 cents estimate was 60 cents uh rev 25 8 billion estimate was 2.43 billion so
• 19:00 - 19:30 they missed on Revenue uh but they beat on EPs and margins wow more efficient than the street thinks or thought Wall Street got the gam but my take on that is I think cybertruck was a big Tailwind for gross Automotive margins maybe they were able to scale it and get that price you know the cost down because they're slinging so many of them for 106 105k on average between the cyber beast on the dual
• 19:30 - 20:00 motor yeah that's really good pull up you guys able to pull up the deck yet or not yet yeah I've got the deck open oh all I might pull it up too all right well share away I don't have it so one of the things they note I how but the first thing I was looking at was um whether regulatory credits came in pretty high but they were in the $700 million range which was you know higher than average but not crazy high lower than where it was last quarter but it
• 20:00 - 20:30 looks like there was a decent amount of recognition of FSD Revenue related to cyber truck and um actually smart summon so I'm trying to figure out exactly how much that is because they didn't uh exactly detail it so I'm wondering if in the just difference in the balance sheet quarter or quarter we might be able to hone in on on that deferred revenue piece so it was I mean it's actually pretty consistent so I'm not sure what the what the rationale is here so Matt Matt you hit on something hey there by the way you yeah I jumped right in right
• 20:30 - 21:00 when they dropped I thought we they Dro it at 4:15 or 420 or something Nico took his capw for something I thought for a second no but uh you mentioned they break out the cybertruck FSD revenue and not anything else that's FC no they they didn't break out the cybertruck FSD Revenue they said that there was recognition of uh of FSD related to um the Cyber truck so all of the um Founders Edition cyber trucks came with FSD there wasn't a an option not to have it I believe they um they delivered that
• 21:00 - 21:30 functionality right at quarter end so they were able to recognize um FSD for a decent amount of those vehicles for those cyber trucks and then for across the fleet at least in in the United States uh for actually smart summon cool so trying to figure out exactly how much that was but they don't say it right there in the summary stock hit 227 I mean the big the big news here is gross margin 19.8% that was the bane of wall Street's exist for the longest time and uh I was
• 21:30 - 22:00 right we never saw five earnings misses in a row so that history didn't repeat which is good we got a beat there yeah cyber truck hit positive gross margins wow look like after three quarters in the Outlook section their product they're reaffirming a more affordable model on start for production first half of 20125 so that's good it seems you know completely separate from the robo taxi product good Lord
• 22:00 - 22:30 230 moving up so looks like emt's gonna do okay on his little uh miniature bet maybe I don't know I mean it's gota get past 235 to be in the money but I could probably sell it at the open tomorrow for a nice like 3x gain or something yeah it's screaming past 230 now I think I think we could see 240 250 tomorrow if
• 22:30 - 23:00 this continues but again it depends on the guidance and with these types of positive fundamental numbers with all the Investments that they're making they can be much more confidence in their guidance going forward especially around model 2.5 and all that stuff so a lot of goodness here did somebody check in on Tesla Bears see if they're okay Tesla he okay what do you have highlighted there
• 23:00 - 23:30 yeah I love this statement these vehicles will utilize aspects of the Next Generation platform as well as aspects of our current platforms and will be able to be produced on the same manufacturing lines as our current vehicle lineup um and this is this is pretty much exactly in line I think with my expectations but also just the like it makes common sense that if we're going to produce the Cyber Cab in large volume uh you know we'll say somewhere in the 5
• 23:30 - 24:00 to 10 million vehicles per year range well you've got a long you know even if we exit 2025 with 3 million units of capacity like growing that to then three million plus five million a year of cyber cabs that's a huge jump and so we definitely need whatever those Next Generation vehicles are to help expand the capacity of the supply chain uh and the
• 24:00 - 24:30 manufacturing base and whatever that vehicle is it needs to be something that is halfway in between the Cyber cab and current 3 and Y in order to help make that a continuous ramp that is something that can be uh accomplished feasibly so I've got some some breaking news if you guys don't mind me jumping in energy grow margins for the quarter 30 and a half% yikes wow that is wild that I mean that is that is a big shot well before you joined Matt I said based
• 24:30 - 25:00 on 2026 numbers that I forecast the energy business alone should be have a market cap of a trillion dollars that's how important this business is and nobody's appraising it yeah I would probably disagree with that just but um I I'd be curious on on how you you kind of get to those those numbers on a on a rule of like what's the what's the high level you're looking at yeah just the the growth rates H it also assum s the build out of a third MEAP pack tree after Shanghai and 12
• 25:00 - 25:30 gwatt hours per facility and a constant 25% profit margin and just crazy growth I mean energy is needed they they will not have any problem selling these things through 2030 in my opinion yeah so I I agree I mean I think the the the Tam is is very large but every time I've done the math though and and try to kind of back in on this I'm getting you know like maybe $50 to $100
• 25:30 - 26:00 of of earnings per or not earnings per share that'd be awesome of uh like value to to share price implication yeah so like I think it's important and underrated but I I would struggle to get to the like trillion dollar Mark at least on a present value basis if if you're G to project out a number of years and say a future value it could get to a trillion dollars like I'd buy that yep so are there any Pages yall want me to go double click on and dig into or
• 26:00 - 26:30 I did a a search for the update on the 4680 cell and there was just like one update in in battery power train manufacturing the last sentence this Q3 we produced our 100 millionth 4680 cell and continued to progress our dry cathode manufacturing lines so I don't remember where they were previously what their last like metric was for how many 4680 cells they produced but at least they're quoting you know maybe someone will uh do the math and see kind of what their rate of improvement is I guess
• 26:30 - 27:00 um on the 4680 I know that's a big part of of their future still right yeah I remember that they actually tweeted out about that 100 millionth cell and um I think Jordan had a good thread on what the implications of that were for for growth and basically that yeah we are finally getting into a new phase of exponential growth for the 4680 again when you compare that like you said with the dry cathode thing being
• 27:00 - 27:30 solved um then it looks like you know maybe we're finally out of the woods of all the the choppiness for 4680 growth all right so any other highlights we want to dig into trying to read as I go
• 27:30 - 28:00 yeah I mean just just one note on page eight I think is is pretty interesting they're talking about their AI software and hardware and at the the end of that they say they expect to have 50,000 h100 capacity at the gigafactory Texas uh by the end of October um which that's a little bit ahead of my internal timeline I I wonder if that's actually usable capacity already I I wasn't thinking they'd have that much on like so quickly so if that's true that seems like that'd be a pretty um you know good uh good
• 28:00 - 28:30 news for the development of FSD um but I'm a bit surprised they don't seem to say anything about like v13 which was expected to drop in the end of October as far as I can tell they haven't mentioned that here yeah I don't see any mention of that specifically I do um yeah James had pointed out that Joe
• 28:30 - 29:00 techm this morning called uh out the fact that they've got the liquid cooling running for the uh the cortex cluster and so I'm sure that's probably in preparation to get I mean that's looks like 21,000 h100s up and running um above and beyond what they already have
• 29:00 - 29:30 there's a picture of the cooling as well in the deck you want to flash it for a second only two of the fans are running though so one third I think they're still testing it so there's uh two interesting uh things that I just saw I don't know if you guys already talked about or not but it looks like they they are anticipating a really big Q4 because they think there will be slight growth year-over-year
• 29:30 - 30:00 wow yeah elon's going to pull out all the stops to make sure they do not shrink even if means 0% on all vehicles FSD transfer Etc I expect that to happen and they have the capacity and the numbers just out of Shanghai this morning we very strong third best week ever and model 3 is a third of all volume yeah under Outlook it says we expect to achieve slight growth in vehicle deliveries in 2024 so what is you guys keep me honest what does that mean they have to hit half million it's
• 30:00 - 30:30 it's over I think it' be 520 yeah wow' be huge they've never hit 500 before so I mean that's yeah that that's a lot of vehicles and then for all those people talking about Tes needs to do a capital raise it sounds like they're signaling that saying that whoever says that got 33.6 billion in cashh and I was just looking at this free cash flow in Q3 was 2.7 billion I mean that's that's wild
• 30:30 - 31:00 yeah I'm not going to throw anybody under the bus but uh they're they're on the other big stream happening right now oh oh my gosh and they is not one person it's several people I actually haven't heard that in a while I mean that that's kind of shocking to me that people are still saying Tesla needs to raise cash I mean I thought we dispensed with that like five years ago yeah me too even me Kevin
• 31:00 - 31:30 says that like every other time he talks about Tesla that's ridiculous I know you guys probably like it's ridiculous you guys listen to him have we have we dug into why the revenue was a Miss was that because of Revenue recognition around Mega packs no I mean I think I think the MEAP pack revenues were largely in line uh or the energy revenues at least with with what I had been modeling I'm not
• 31:30 - 32:00 comparing it to um where the street came in but I mean I think the automotive sales numbers are are lower than I would have expected so 18.8 billion uh versus 18.5 billion in Q2 and that's despite having delivered a lot more Vehicles I'm guessing product mix I mean we know they sold a lot more in China at a much lower price point so I'm guessing that has something to do with it and I wonder if if um foreign exchange um I should probably look at this before I start spouting off but I
• 32:00 - 32:30 would imagine um if the if the UN depreciated a little bit that might decrease the the sales figure a little bit um on a you know when you adjust it for for the dollar uh impact um but the margin would be intact still so that that's a thought and another interesting Co at two apart from the Tesla gross margin of 19.8% which is mind-blowing despite the red Miss can you imagine but the other thing
• 32:30 - 33:00 is Tesla free cash flow 2.74 versus 1.6 estimate and free cash flow is everything that's probably the most important metric as Jeff Bezos used to say over 20 years ago so any thoughts on that with especially with all the Investments that they're making at the same time yeah they they invested 3.5 billion in capex this quarter and they were still able to generate that much in in cash flow nearly three in cash free cash flow mad Madness how much are the re uh the what the emission
• 33:00 - 33:30 credits can't see those numbers 700 something million I think small okay 739 million so I mean higher than it has been historically but lower sequentially um yeah usually it's like 500 million or something in that neighborhood right man yeah that that's where it had been for a long time last quarter it spiked up to 890 and so like okay that is that an anomaly or is that a a sign of things to come so I am surprised it's as high as it is again
• 33:30 - 34:00 but you know it's not like it's you know completely out of whack and driving 100% of the of the change there I mean there it seems like there's a lot of little things that are all kind of piling up for a really strong quarter M um I'm sure Gordon Johnson is delighted with the results I mean their operating expenses are
• 34:00 - 34:30 super lean this is they're they're 2.28 billion um after all their restructuring is is done now and I I was kind of expecting they'd come somewhere in the like 2 point5 billion dollar range maybe a little bit under that um so they they really all that cost cutting they did is like that's a a meaningful impact there because this is the first quarter as well that they had the full impact of the Riff correct yep that's that's right
• 34:30 - 35:00 and they still do have the the lowest in five quarters Madness check the chart it's kind of struggling around the 232 mark and it falls off again but now it's 229 now it's all about waiting for the guidance in 10 minutes yep Marines call I wonder how many sayate
• 35:00 - 35:30 questions they'll get to I think they'll get to a bunch because a lot of them they're going to be like this is not the place for product announcements yeah do you think elon's gonna maybe not be on this call given how active he is politically right now do you think he'll be he'll let his uh no his his stump speeches are just an hour or so I'm sure he shedule around it I think considering how good the results are I think he'll definitely be on do you think he starts off the call by talking about how important it is that
• 35:30 - 36:00 we elect President Trump every vote counts yeah every vote counts I want to encourage all the analysts on Wall Street go and register yeah all the swing States chance to win the million dollars sign the petition that's an interesting topic I I get a lot of questions by the way I just want to field it to you all what happens if uh when elon's guy does not not win how badly could that impact the Tesla
• 36:00 - 36:30 stock any takers happen my friend I I worry about Elon uh you know just his his himself personally if uh if somehow uh Trump does not win um but I'm not sure the stock takes a near-term hit you know I'm not sure but I think Elon personal the man risk seems to go up just for his sanity I feel like I I
• 36:30 - 37:00 think it's a nothing Burger look even if Cala would win which I really don't think is gonna happen I think you already see like someone like Mark cubin out there who's speaking on her behalf like already trying to like work to say I mean even he's saying like if Trump won like yeah of course I would help out the country and all that and honestly if Cala wins I'm sure Elon the same way would be like if you want me to come in and start up the Doge for us I'll do that you know do Mark Cuban yesterday I don't think he's join
• 37:00 - 37:30 Mark Cuban I mean honestly I think Mark Cuban gets too much for that like I don't agree with a lot that he says but he's not wrong I mean you even hear Jamie Diamond saying like I don't care who the president is it's about America first and so whoever's in there that is your commander-in chief that is your leader whether you like them or not and you should do what's best for the country at that point because we got four years of that so one way or another I mean it's it's there's too much vital on this like it's not my person so that's it I hate them and that's it like
• 37:30 - 38:00 that's not going to help us I mean I would love to see the department of government efficiency either way I think that that uh would be less likely to actually happen under Cala but um man I would welcome it if we ended up there but can you imagine the millions of grifters and how upset they would be if Doge happened uh going back to emt's point of the risk for Elon you
• 38:00 - 38:30 know you go in anywhere with a chainsaw what it lafera the guy Javier down in Argentina he's getting away with it he's surviving somehow but I don't know what the security detail is like but a lot of people on the grift they don't want to lose their grift um lifelong politicians and stuff like that so I'd be very concerned Elon did say in one of his q&as that you know anyone would get like a very generous s package of like two years you know so that they could have
• 38:30 - 39:00 plenty of time to find another job somewhere you know get out to everyone yeah lifelong politician trying to get a job in the real world not gonna happen yeah who's gonna hire those so yeah but Sawyer just tweeted that uh he did the math I guess but it seems to signal over 515,000 deliveries in Q4 to meet that that metric that's referenced so that would be a big Q4 you know by the way has anybody seen a slight
• 39:00 - 39:30 shift in mainstream media instead of slaying Tesla and Elon and SpaceX every day it's actually become more positive lately or is it just me I actually said that on either with Herbert Randy or Farzad and Hans I forget but one of them I said that I think when they succeeded with the Starship catch that that was the shift in the Overton window for Elon I think um I think that's I think
• 39:30 - 40:00 starting from that point moving forward you're going to see people come back onto the Elon Musk good camp 232 I think that um there's a lot more attacks focused on Elon as a person lately you know with his political involvement and it's shifted away from the companies as much you know yeah but that's to me that's more about like that's a problem if someone can't have their own opinion without you saying
• 40:00 - 40:30 that there's something wrong with this person or they're corrupt or they're unstable and like that's that's you have a problem with yourself like you can have a difference of opinions right like yeah you see Matt and farod and they still don't respect each other yeah I agree 100% Nico just a shout out to the fact that far's not on here to bring the stream down this is this is really nice maybe we should have farza not on more often so the stock reacts this way H you can take over I think thank
• 40:30 - 41:00 you Cindy thank you Cindy can can we double tap as well um was it Matt that you mentioned the Cyber truck is now contributing to margin I think that is worth repeating I mean what other the car company can make something so groundbreaking so revolutionary with such complex technology uh materials and it profitable in a short wind of time it's it's Unthinkable
• 41:00 - 41:30 Lucid rivan Oh shoot no no come on one uh it's uh I like imagine being one of the other incumbents it make you pretty anxious right now I'd say I mean yeah I can't imagine being GM or Ford and and looking at the Cyber truck and realizing that this is what you have to look forward to competing against for the next couple decades yeah they're onethird into the ramp and
• 41:30 - 42:00 they're already profitable mind blowing you know they're it does bear noting though that I mean they're selling at least in Q3 exclusively Foundation series cyber trucks at a what do you think the ASP on those was like 105 110 yeah 105 100 yeah so um I mean if they're positive I mean they could be positive by two three th000 bucks and that's like a two or three% gross margin so now that they're introducing the you know lower cost variation um those margins I would
• 42:00 - 42:30 assume might shrink but that's going to be offset by the fact that you know they're they're continuing to work out kinks in their production system and and scale and get the you know the economies of scale that's going to help so it's a little going to be a little bit of a cat and mouse game with you know asps coming down on cybertruck um you're not going to get this onetime benefit of the um recognition of all the um this the cybertruck revenue for both Q2 and Q3 which is what they got you know cuz all the Cyber trucks sold in Q2 the FSD Revenue was recognized in Q3 also so
• 42:30 - 43:00 that's a little bit of a one-time bump pretty small impact I think overall but it's you know there were a couple things that are one time is with cybertruck in in Q3 um so I would be curious if they if they talk it all about like what was the actual gross margin on Cyber truck or like are they still going to be gross margin positive at uh these new lower price um asps that they're going to be have going forward yeah Hans can you pop my chart up for a second I'm sure in right now check this out ladies and gentlemen pretty Bonkers we are shooting
• 43:00 - 43:30 to the Moon I said it could be 240 to 250 tomorrow looks like we might hit 240 on this coal that's coming that's a a big move there and that means there's some gamma squeezing going on too because a lot of bears are very much short and they were used to the last four quarters of going down can we just say what a shock these numbers were though I mean like every single you know uh Twitter analy expert myself included was coming up
• 43:30 - 44:00 with with EPS figures lower than than Wall Street um and Tesla absolutely knocked the the the socks off of every single estimate I mean this is like across the board this is massive be Matt if if they only had regulatory credits of 300 million instead of what is it uh 800 million or whatever you know if they had 500 million less regulatory credits how much would that have affected the you know earnings per share how many pennies uh it's a handful I I can get you let me
• 44:00 - 44:30 r five cents 20 cents 10 cents no it's not 20 cents it it'd be between five and 10 I suspect okay all right so it's you know it's hard I feel like that's that provides a lot of noise and you know that number alone for example like it's almost meaningless for the long you know and we like to Discount that but it's real money but it's it's a lot of noise and that variation I feel like I don't know with everybody pulling back on their EV plans I think that that regulatory credit Revenue stream is only
• 44:30 - 45:00 going to continue to grow for the foreseeable future you might be right yeah could be GM is actually growing pretty significantly year-over-year and and I think quarter over quarter they up like 30% or something like that so it's it's I they they they've been gaining market share now in Europe probably less so um but I I don't know it's it's not clear to me that red credits will be going up based on the success that some of the other oems are having but to put it in the context that regulatory credit that everybody always
• 45:00 - 45:30 wants to say it's you know we need to factor it out that's over 50,000 h100s a quarter that they can buy like put like think about it that way right that's over that that's probably closer to almost 100,000 h100s per quarter they could be buying like they're essentially all the other uh incumbents are paying for Tesla get the AI compute Hardware so that they can then further
• 45:30 - 46:00 take the lead on them I mean the irony is palpable so I I did I did just run the math just to uh finish that uh with the red credits the 790 versus if they had been at 450 million which is kind of where they had been historically that's worth seven cents okay that's not much not too much that's nothing let's go it's it definitely contributes to the be I mean there there's like it's it's not actually nothing but it's like you still the The
• 46:00 - 46:30 Core Business still did what was it another seven cents on top of that what was the actual earnings per share I was gonna say you factor that out it's still a beat yeah exactly exactly yeah yeah sorry farad you're gone um to Circle back though to the the capex point you know we really work using that money to build out auto manufacturing capacity for a long time
• 46:30 - 47:00 but I think to your point Nico like we have shifted to Now using that capex really to invest in training capacity and uh you know building out the AI factories that will produce the intelligence that animates our Robo taxis and our optim robots yeah another very nuanced finding as well people were all up and arms about them stopping the supercharger
• 47:00 - 47:30 roll out but they created more superchargers last quarter than the previous quarter so they have not slowed down in fact they've accelerated just a small little Point good point Roadster is it going to happen quick round the table yes or no I think it is next year and will you order one I got my reservation in already so I'm just waiting yeah well I'd probably kill myself so I'm not going to happy
• 47:30 - 48:00 with the Cyber truck I need something bulletproof I think they might only produce a certain amount of them I guess I don't know I feel like it's just going to be like a like a spectacle like a technology spectacle or something and they'll make like several thousand of them and that's it so it could be like a real cool collector's item for the future if that's the case but maybe they'll just make as many as people want who knows there was another thing as well that people may have met but a lot of people were saying that the conductive charging would be a failure and would
• 48:00 - 48:30 result in a lot of loss of energy but apparently it's running at 95% Efficiency do you guys see that that's also a big Point yeah I definitely saw that MKBHD put his foot in his mouth on that one and um obviously Y fuon is above above 90 so it's hard to say I mean I didn't see the estimate that it was actually at 95% but I knew it was somewhere in that uh vicinity I think it's between like 90 to
• 48:30 - 49:00 95% I'm an investor in this company heo power that's been doing it for a long time too and they're they're working with the some of the oems on on this uh for future models and I think it's between 90 95% you know maybe it was 80 85% 5 years ago or something but it's gotten a lot better in recent years so yeah I was just going to say it can it only be up to a certain capacity like if it goes if they try to you know pass
• 49:00 - 49:30 through as much energy as a supercharger you know even at 93% or something there's too much heat escaping to make it work because it would melt everything around it so it can only be up to a certain like level of uh energy Capac you know power at a time I can't remember Matt knows kilowatt hours or kilowatts I forget the metrics I confuse them but it's uh kilowatts probably for for the charge rate yeah yeah or whatever that does seem like questionable to me I mean because Tesla clearly has thought about this before
• 49:30 - 50:00 they decided that the Cyber Cap's just not going to have a charge board so like they must have figured out how to charge them at a high output supercharger type of situation do you guys have any thoughts on like are they going to just update the supercharger infrastructure with some mats or something or or are they just going to assume that people only charge these at home or I I seems confusing to me I think there's going to be two things one you I think you'll have dedicated cyber cab uh charging lots and then I
• 50:00 - 50:30 think when you buy cyber Cab you'll also get the opportunity to buy a wireless charging uh station just like you have the ability to buy a wall charger yeah yeah did they say did they say the Cyber cab is not going to have a plug for superchargers did they supposely say does yep doesn't have they they didn't say that but it wasn't visible on the vehicle but lots of things weren't visible the
• 50:30 - 51:00 vehicle doesn't mean that's it's not there no they're they're going to make this minimalist in every single way when you sit inside it it's just whatever you could rip out they ripped out except for the chairs and the screen that's it I wonder how much cost it would reduce to eliminate that charging um capability if they you know if they wanted to 500 bucks 300 to 500 vehicle I'd say at scale I think that's going to be a game time decision that they're going to continue to explore from now all the way
• 51:00 - 51:30 up until they start up production and I think it's a 50-50 chance you may see production launch with or without uh the supercharger plugs I think if they're doing a global roll out they would need to have both but because it's going to be in select places maybe China Texas California they'll have it in cities that will have the infra built out before they actually launch and they got a year to do that and that's probably one of the reasons why it's going to take a year before we see these things
• 51:30 - 52:00 in the wild the charging infra and I think you could to Nico's point you know you can do pretty high capacity charging infrastructure in a parking lot where you just have basically fifo Lanes where there's just a whole line of these wireless chargers that they move over and so you could fill it up you know an entire parking lot to where there's an entry on one side and an exit on the other side and the entire parking lot is essentially
• 52:00 - 52:30 just nothing but these wireless charging pads and you can move quite a few uh cyber cabs through something like that and and charge a lot of vehicles in a relatively you know short period of time yes indeed Easter eggs sorry go what cheaper I was going to say it's definitely cheaper to I think build out a bunch of charging pads than to put up a bunch of
• 52:30 - 53:00 superchargers for sure I don't see any Easter eggs yet but you know could be somewhere yeah I'm looking at pictures I still can't believe I missed the event freaking hurricane you were stuck in the storm yeah or had to sorry about that hope everything's okay
• 53:00 - 53:30 now well our house is gutted oh crap my wife gets her dreams we're finally uh after only being in the house for six months we get to redo the kitchen again can can you even find people to do the work right now wouldn't they all be slammed I got people I didn't see enough people with the the Wii robot event like they have a picture of the hand I think that's a real big deal like the new hand has 22 degrees of freedom I looked up the human
• 53:30 - 54:00 hand only has 24 degrees of freedom so it's just a little bit more Nimble than this new robot hand so I feel like solving the Optimus hand is a really big deal so that's that's a big picture dedicated just to the robot hand for example I think they know it's a big deal there's two very important things that I witnessed while I was there one is holding up this little paper bag of caramels or chocolates or something but the top of the bag was extremely thin maybe 2 or 3 millimet and it had the dexterity to be able to grab the top of
• 54:00 - 54:30 that bag and hand it over uh so that was it speaks to exactly what you're saying EMT extremely dextrous fingertips and that was the that was Optimus that you saw there they have the The Hand by itself on the new one they haven't put on the Optimus yet I don't think that has 20 that's even more crazy so there was a guy there called uh Dr Nole and he he said saw 22 degrees of freedom on the demo one at the event oh really can
• 54:30 - 55:00 anybody correct me on that H did you pick up on that we're we're conflating yeah here let me I'll I'll show you let me pull up the shirt Who would thought we'd spend so much time fascinated about fingers yeah here we go so this this was the 22 degree of Freedom hand they did have it it was at the event it was in the vi P section there's some videos of it circulating around online uh dirty Tesla
• 55:00 - 55:30 has a one that's probably the best one that I've seen but there's a few other ones as well uh so this is the new hand but this hand was not what was actually on the most of the robots that were out in the wild um so these hands yeah this is the Optimus yeah this is Optimus Gen 2 and that's the Optimus gen to hand on all of those robots that yall interacted with and that is the 11 degree of Freedom hand uh as opposed to this very
• 55:30 - 56:00 special hand that you can see is driven by these tendons it's it's a whole redesign of how the hand works so like you can see there's three individual segments here on each finger three for the thumb as well um these Optimus gen two hands only have two so basically one uh you know two Knuckles instead of three for each and that that's also for the thumb and for the the fingers and so anyways there's a lot of
• 56:00 - 56:30 differences between this design and this design and this one is the one that will be able to function almost identically to a human hand if they can figure out the software problem and that is a very very very very difficult you know if bipedal walking is hard um human dexterity hands is even harder [Music]
• 56:30 - 57:00 I'm glad I'm not in that job trying to figure that out I've done a little bit more oops I've done a little bit more math in in the background here and came up with something I think is pretty interesting so they note on their energy deployments uh Outlook that energy deployments are going to more than double in 2024 and so if you look at what they did um in in 2023 um combined Matt I'll pull that back up uh it is
• 57:00 - 57:30 uh page 10 it's the first the last sentence of the first paragraph says energy storage deployments are expected to more than double year-over-year in 2024 so if you look at what they did in 2024 on uh stationary storage deployments it was um 14.7 gwatt hours and so a double of that would be 29.4 gwatt hours and to just do a double that would be that would that
• 57:30 - 58:00 would imply Q4 deployments of of over nine gwatt hours which is basically what they did in in Q2 but since they're saying more than double I mean it could be 10 11 maybe even higher um but at a minimum we should be expecting nine gigawatt hours of deployments in Q4 so I think that's that's pretty um impressive guidance that they're given there good find man good
• 58:00 - 58:30 deduction especially if we can maintain 30% gross margins then uh yeah I don't know maybe maybe it is worth a trillion dollars yeah you should put that uh put that out on a tweet like Sawyer you know just so yeah I'll do that that's a good it seems like very logical deduction right there a lot of people probably haven't put it together would you guys say that we can officially say that Tesla gross uh Auto margins excluding uh
• 58:30 - 59:00 regulatory credits have officially bottomed since now we're at 17.1 versus 14 point something last quarter well I think they're going to cut a lot of prices this quarter to ship you know 500 plus thousand cars I wonder if it could get lower for this fourth quarter if they're going to really like try to ship more product by having to cut prices more I'm not sure it's got to be close to the bottom if it hasn't bottomed but this
• 59:00 - 59:30 fourth quarter it depends how much they're gonna how many deals they're going to give out I guess that's my thought man I just wonder how many people are trying to cover right now is definitely some of that going on and uh question is can they I gu to show you when everybody thinks something it'sa mat you you missed the beginning of the video today because we spoke about that
• 59:30 - 60:00 it was highly unlikely there'd be five misses in a row and everything was shaping up you know the selloff post we robot but you know it was leading to definitely some type of Bounce however none of us expected the results to be this good yeah I so I I did kind of think the same thing that sentiment seemed a little too bearish uh to me um based on everything I was seeing like so many people are just like oh it'll be another 5% sell off for sure and I'm like okay when when even the Bulls have that sentiment that's that's a good kind
• 60:00 - 60:30 of Contra signal to maybe what you should be thinking but to your point I definitely did not expect a like a a pretty massive beat across like all the fundamentals like we we saw here so this is this there's there's a lot of fuel being poured on the the fire here it's pretty pretty cool to see the EPS beat is 21.5% and the revenue Miss is 1% so we'll excuse them on the revenue Miss yeah I'd love for them to dig into FSD
• 60:30 - 61:00 in a little bit more detail because from from what they provided you you really don't have a whole lot of information on um you know how much they recognize from the deferred revenue balance let alone like what are the FSD subscriptions right now or what's the take rate um I've always been like wanting them to disclose a little bit more around that and it's just given that revenues are flat and margins were such a surprise it seems that you know we've got FSD um revenues really contributing to that I mean I I don't think the reason that
• 61:00 - 61:30 gross margin expanded so much is that they you know cut out a huge amount of cost from the vehicles I'm sure there's been a bit of that kind of helping around the the edges but um to me it it's almost smelling more like you know FSD sales or subscriptions or you know onetime recognition is a lot higher than we were expecting um but when I'm looking at the deferred revenue balance from you know what they can disclose which is just their deferred revenue on the balance sheet is all lumped together with all the different sources of deferred revenue uh might need to wait
• 61:30 - 62:00 for the 10q to come out to get more detail on how much of that is related to FSD but there's nothing jumping out as like the the entire different revenue balance decreasing in in any noticeable way can you pop up that chart again the my one that I'm sharing just to show you how quickly this thing is moving the uh not the slide but the actual screen yeah it's looks like it's topping off a bit here here at the 232 level 234 but still big big move and people
• 62:00 - 62:30 have to remember not all people have access to after hours markets so it is does bode well well depending on the guidance we get later which I think will be Uber bullish but uh tomorrow should be a very good day and that's where you see the big gamma squeeze happening one other thing I I want to just say on on the deferred revenue side um if there was some huge recognition deferred revenue that was like a a one-time item that was really driving these margins you'd expect the deferred
• 62:30 - 63:00 revenue balance to actually go down um but what we what we're seeing on the the balance sheet on slide 27 I don't know if you want to pull it up or not Hans it's it's just a bunch of numbers but um the deferred revenue balance actually increased um so the current portion was 2.8 billion and now it's just over three billion um and the long-term portion was losing my eyeballs here um the the long-term portion was 3.35 and and that's constant actually in uh in Q3 so
• 63:00 - 63:30 the the current portion actually increased the long-term portion is essentially unchanged um so how is the deferred revenue balance increasing when they're actually recognizing a huge amount of the FSD Revenue now granted there's a lot of other noise in there you know like supercharging miles and some stuff on the energy business that all kind of gets mixed in there um but it's pretty encouraging that they're able to have such strong margins explicitly noting how much um recognition of deferred FSD revenue is
• 63:30 - 64:00 helping and you're still not you're not seeing that balance decrease so one thing that that could imply is that FSD take rates are actually increasing um and that would be very very good news indeed but that's a bit of speculation does anybody here know the exact uh profit margin of FSD today it it be 80% 90% has anybody ever figured that out I haven't been able to in terms of how much they're recognizing no yeah if you well just if you imagine they recognize
• 64:00 - 64:30 10 million how much of that is pure profit I I think almost all of it um but do they not have to amortize eight nine years of FSD development into it or is that all written off already well that just that stays in the in in the Deferred cost so so um I mean let's say they they fully launched FSD everywhere and they delivered all the features today um there would still be some amount of deferred FSD Revenue just because like they've got a account for updates that they're going to have going forward so my understanding of any FSD
• 64:30 - 65:00 revenues that are recognized um it's essentially like 100% margin but like you're I mean there's really operating costs that go into that because the whole AI team is like their their you know expenses essentially hit the overhead um line like R&D and um probably a little probably mostly R&D I would suspect so that's like the cost of kind of developing the software that ultimately gets rolled out so you know if you sell a car today for $10,000 I I I think Tesla's probably
• 65:00 - 65:30 recognizing I don't know why I said $10,000 $8,000 for FSD I suspect Tesla's recognizing around 70% is of of that Revenue today based on how much they've delivered of the functionality um and maybe if they fully deliver every little piece that they've uh promised they might recognize an extra I don't know 10% or something like that um and then the balance will just get recognized over time over the over the expected life of the
• 65:30 - 66:00 vehicle and Mark Newton from funr was very bullish too he believed if I'm not mistaken this would be the last dip before the big rager to a new all-time high did anybody see that yeah he's super bullish and he estimates new alltime high within the next six to seven months I think so um I've got a buddy of mine texting me it is this all-time high for Tesla as far as cash on hand I think so yeah yes yeah but it's
• 66:00 - 66:30 always alltime high basically because they're always having positive free cash flow billions yeah that's crazy though right like going through all the everything that's going on the ups and downs the competition the I mean just inflation period all the discount I mean it's just it's insane but especially scaling multiple gig Factory simultaneously if you include megaa Factory and the semi Giga Factory as and
• 66:30 - 67:00 also the battery facilities and the extensions to Giga Texas and so much more it's it's pretty mind-blowing that they're still socking away so much free cash flow apparently by the way I just saw some breaking news that cnbs is fuding Tesla again I can't I don't have TV so I kind pick that up but they probably have Gordon John on probably General Motors is coming
• 67:00 - 67:30 they're going to take over I would actually love to hear Gordon explain why this Q3 result is a disaster for Tesla I'm sure he'd find some way but like even if I tried it would be such a struggle his next line will be they're cooking the books this isn't impossible oh yeah oh fraud yeah Fraud's always the answer when you're positive free cash flow and busted Growth oh yeah well look their revenue was actually flat so like clearly the only
• 67:30 - 68:00 way they can get around with this is with fraud yeah and that's that's the other thing is you know it's it's easier to kind of I guess grow Revenue when or grow profits when revenue is growing it's harder when it's not which is another angle logically sometimes I'm excited to see how quickly this uh Chinese mega pack Factory gets up and running they said they're going to start delivering I mean we saw what they did with the uh the car China knows
• 68:00 - 68:30 how to produce and manufacturer you know and Tom zuu there back in charge that thing's gonna just surprise us all I think yeah I didn't I didn't realize his background until about a month ago was Factory building that's his skill not cars or was just building Factories at Bill Factory so and he's brilliant at it h but that when is that Shanghai Mega P done January I think it's supposed to start producing I don't know when it's a roll
• 68:30 - 69:00 out I saw something where it says I think it mentions they going to start rolling out the first uh the first products from it in q1 so yeah John Feb amazing yeah I'm curious Matt what your your take on I mean we're looking at seven uh gwatt hours deployed in in this quarter I know that's off a little bit from what we saw deployed in Q2 but it
• 69:00 - 69:30 seems like another really strong quarter for for deployments is that in line with ahead of or behind what your expectations would have been pretty much in line um so let me see what I actually put in my model here because I can never keep all this straight so in my model I estimated 6.9 gwatt hours I wasn't doing that just for the memes um I did think I mean with the way that these these ramps so it seems to me that
• 69:30 - 70:00 LR has been ramping if they were at full capacity that'd be 10 gwatt hours per quarter that we'd see but there Al there's also a little bit of power wall in there so it gets a little bit messy but with them being flat for so many quarters in a row it just seemed very logical that they had built up a lot of Mega packs and just an unusually large number of them essentially took delivery delivery and got qualified as a deployment in Q2 so wasn't necessarily indic indicative of like some massive step change that we would never kind of like come back down from or uh yeah yeah
• 70:00 - 70:30 that we would never uh come back down from so I was expecting a pullback and and the pullback was not as sharp as IID actually projected so this is pretty good news I think um that that the the deployments are are still so strong and especially when you couple that with the the guidance that they had essentially showing that they'll get to n gwatt hours plus in in Q4 um the whole energy I I couldn't have asked for a better like quarter on deployments on margins on uh outlook for energy I mean this is
• 70:30 - 71:00 this is an absolute home run quarter for for energy yeah and and just digging into one of their claims as well they said they would make a new record number that have growth for 2024 I went back to Q4 2023 and they made 495,000 cars so to break the record for 2024 they just need to do 20,000 more than they did a year ago and cyber truck didn't exist cyber truck alone will close that Gap so um that's very achievable what do you guys
• 71:00 - 71:30 think my question Always On Demand go ahead Hans well I think they can pull the demand levers any way they want so they can fill demand anyhow I think yeah it seems like they're definitely you know leaning all in on that right now with all the 0% financing here in the US um the $4,000 inventory discounts I think they're really you know pushing
• 71:30 - 72:00 the pedal to the metal on trying to move as many cars as possible this quarter and I think Q4 will be a strong quarter I think that the you know strength that we're seeing in China between that and the I think kind of rebounding in the in the consumer here in the United States um that the demand will be in the ballpark um I don't think it's outside the realm of possibility that they'll be able to meet
• 72:00 - 72:30 that as long as they can you know don't hit any hiccups from a production standpoint and we can actually deliver all the way across the board so I got production's been solid like I don't I don't expect anything there I have a philosophical question for you all so the competition is reeling first of all second of all there's been a big uptick in the second half this year back into bevs so bevs are not dead third of all would you buy a dumb car if you were
• 72:30 - 73:00 going to make that capital investment today or would you buy a smart car that can drive itself because if I was investing I would not dream in a million years of buying a dumb car it would only be an FSD Tesla um what what do you guys all think is that crazy or is just you know that my diesel F250 will still sell like hot cakes or not Nico would you buy a dumb car putting you on the spot because you know it's going to
• 73:00 - 73:30 amortise like hell would I buy a dumb car now you're talking the wrong person here man I don't think anyone who knows about it would but I only think like two to 5% of the population is aware of that you know so Tesla doesn't really do itself any F favors in uh educating the general public you know they rely on people like us to try to educate them so if more people aware yeah for sure demand would be through the roof but it's just not enough people aware I I also think that
• 73:30 - 74:00 you'll see like I I don't always agree with what you're saying emit in terms of like FSD and that part of it I think once we see FSD wide like once you can use it in Europe once you can use in China and Australia Etc I think you'll see a actual campaign of trying to get people to adopt it um why would they do that versus you know like they don't do it really now with the vehicles I mean they tried a little bit but I don't know I I
• 74:00 - 74:30 think it'll change once we're out of a a beta supervised level of the product and they're ready to roll worldwide Roll Out World worldwide W that's a tongue twister you get what I'm saying and then actually smart summon rolling out I think that that's uh you know a pretty important feature and I does seem to get some traction and some play on social media and so I think that is another between that and the Cyber truck like more cyber trucks on the
• 74:30 - 75:00 road I think that those are are both you know definitely marginal demand levers that are significant I think banish is going to be what matters banish is the actual usefulness not summon yeah banish is big and I think yeah I think once they have these uh self-driving programs going without like the unsupervised full self-driving going um then it's going to
• 75:00 - 75:30 sell itself and they won't need to do kind of any kind of campaigns they don't have to you know there'll be tons of news tons of people just start buying Fleet managers will get smart and byy it but um I think now is the time they they would need to do some kind of campaign to like signal like hey this is coming you don't you want to buy any Teslas ahead of time but um yeah there's a question in the audience here what is banish can somebody explain hands give that to you yeah so that's just the ability for you to tell your
• 75:30 - 76:00 car hey you know drop me off at the front of the grocery store or the doctor's office or wherever and uh then it will go and find its own parking space and isoke has said that we will have that by the end of this month uh he made a lot of very ambitious promises about what they would deliver in September and they delivered on every single one of them and so um a high likelihood that sometime in the next eight days we will see a large number of
• 76:00 - 76:30 customers actually have the ability to do that with their Tesla and this is a first ever feature um we did have a version of smart summon back in the day that existed for customers for a little while then it was pulled and um but we never had banish we never had the ability for the car to actually go and find its own parking space for you and uh it's going to be pretty incredible and exciting when it happens uh right now with the new actually smart summon
• 76:30 - 77:00 that's out you can actually you know have the vehicle come to you in a parking lot now um and it's pretty impressive uh it functions well it's uh making good progress um and this ability to both come to you in a parking space or to go find its own parking space is a very important component of the overall FSD stack that's necessary for you to actually have an unsupervised version of
• 77:00 - 77:30 FSD if the car can't uh you know come pick you up or go find its own parking space then it cannot actually be fully unsupervised and so this is a big thing that has to be delivered in order for us to get to that unsupervised level yeah think about it this way this is how I see it Teslas are the only Vehicles really out there at scale that you don't need to go to a gas station they're the only vehicles that can drive themselves now they will be the only Vehicles where you never again just the
• 77:30 - 78:00 way you never have to go to gas station anything like that you'll never again have to go park you just go to the front of the supermarket get out car go park yourself you go to the mall go to the front car go park yourself you go to wherever car go park yourself never get it's the ultimate valet yeah I think there's another there's a couple of things as well that I think are overlooked market segments for FSD
• 78:00 - 78:30 that is uh teenagers and the elderly who are let's say hard of driving or fraught with risk uh drinking and driving use case you know can you imagine the people they just want to go out and they they want their own limo driver and bring out their friends sit in the back of the car and have fun I I wonder how the cops are going to deal with that in 2025 that's what I'm interested in um like I was I
• 78:30 - 79:00 had this cop staring in my window down in Los Angeles and literally I thought he was going to pull me over he was staring at me and I'm sitting there had my phone in my hands my hands were not on the steering wheel and he was just staring me down like waiting for me to crash or something it's like I'm just doing nothing but it's it's such a different time it's going to be a radical change um but any thoughts on on that like those market segments like if for example if you got teenage kids you
• 79:00 - 79:30 don't want them driving a car that doesn't have all these safety features EMT I see you knocking your head agree yeah I agree I'm I'm I've said for years I don't think any of my kids are going to drive they're going to all have these cars driving for them I'm happy for that because I know when I was a kid learning to drive and doing crazy things it was quite dangerous so yeah I'm excited that my kids at least won't have to drive ever yeah or or imagine the scenario as well there's an old people's home down the road and
• 79:30 - 80:00 you want to give back at the weekend say hey you guys want to go to the store take my model X you know go have at it uh so there there's so many use cases that um are very exciting there was a question also in the audience which I found quite interesting uh people wanted to know how much cybertruck was cannibalizing other models the sexy models I think it's a different Market segment entirely I don't think there's any cannibalization happening at all thoughts I agree very minimal if any
• 80:00 - 80:30 cannibalization um if anything it's net net positive is like Hans and others were saying earlier just like seeing them on the road brings more awareness about Tesla for people to research it a little bit more in general yeah I I got a little correction here it's all good for drinking and driving as long as there's no booze in the car no open booze but you keep run the trunk so that is the law I I think but it's not an all states though can you have an open container in different states in the US I don't think so I'm sure okay there's big no no here the
• 80:30 - 81:00 Cyber cab I mean it's not like you can do any of the driving so yeah good point like in a limo you can in a limo right yeah there's another funny question too regarding the banish how will the car pay for parking oh about that yeah I've actually put out a few posts about that wishing that the uh Tesla software team would do something about it so simple it
• 81:00 - 81:30 is so simple you literally just incorporate the app that I have on my phone into the car and you have the in Cabin camera so as the time winds down if you don't see me back in the vehicle you just add time back to it and I can predefine whether it's add in increments of 6 minutes 15 minutes an hour whatever and then or or if you see you know someone coming to give a tick or something you just automatically up it I
• 81:30 - 82:00 mean it's we have everything there already like this is it's not like it's a hard it's it's a solved problem you just have to implement it like it's it's so simple or they could have Tesla self-charging stations it can go charge while you're in the restaurant or the shopping maybe it just drives in circles and definitely around the parking lot until you get back the first few people the first few months it could probably get away with that when there's only a few of us out there but in time that won't work yeah I mean like there's only so many like apps out there like per
• 82:00 - 82:30 state you know like here in Florida like most of it it's just park mobile I don't know if you guys have that there but that's what it for the most part is in Florida so you have to park mobile app there it uses the in Cabin camera you approve it and that's it now I can just go park at any meter so this this call about to come up I mean assuming is on it um and he's not you know delegating it to the other people since he's like in Pennsylvania
• 82:30 - 83:00 or wherever he is now trying to help you know on the political scene assuming elon's on this call and like active in it it seems like these first two say questions are really forcing him to reveal something about this you know cheaper model that he's been reluctant because he doesn't want the Osborne effect you know they're reluctant to talk about it but it's sort of like really trying to push him to reveal more about it and so I feel like if if he does I feel like the stock is going to take another leg up you know pretty
• 83:00 - 83:30 quickly and and and after hours if he does reveal more about this next gen like reaffirms it on the call right there like yeah we're going to start producing it in Q2 and you know we expect to have 20% gross margins on it and blah blah blah blah you know I just feel like it could be a nice nice piece of meat for for investors to to get I think I think with their scale uh with their power over their suppliers and potentially with the tax credit existing
• 83:30 - 84:00 it's not a far stretch at all to scale back the existing vehicle lineup or get to the model 2 and a half 2.5 and get to the 25k PR price point I think they are well within reach they can reduce the battery pack size whip out a couple of features that make it more luxury and get to that level uh so and I think as well we know it's coming in first half of 2025 whether that's January or June it's going to happen but um I think it's a given but the Market's not pricing in yet because they're waiting for that 25k
• 84:00 - 84:30 car hence I'm curious to actually discuss this a little bit with uh Sandy this week and just see from his point of view if you had to make something that was halfway in between the model 3 and the model Y and what we saw that was um unveiled for the Cyber cab and you were going to have to produce it on the current lines you know what would that look like in my mind it potentially involves them actually converting everything over to castings
• 84:30 - 85:00 and U you know because we know that they've still been running the model 3s and the Y's with stampings um the last I knew even in Austin the uh the model y was a rear casting but it was still front stampings and the the Highland three out of Fremont to the best of my knowledge is
• 85:00 - 85:30 entirely stampings so you could add a you know castings at both of those locations that were different um that bypass the entire stamping portion of the lines and then come in down further than that and and have another vehicle you do have to figure out how you're going to increase your cycle times down the whole rest of the line in order to
• 85:30 - 86:00 have capacity for more Vehicles than you're producing for the the three and the y in the stampings but yeah I think you whatever it is is um likely something that's close to that that compact but then we'll share you know the the hood and grill will probably be more like the the Highland model 3 it'll be small um and yeah I think it'll be not fully cyber cab style like I I
• 86:00 - 86:30 don't think that we're going to see The more I've thought about this the more I don't think that it's going to look exactly like the Cyber cab with the steering wheel and pedals I think it's going to be something that's still um a little bit more like a model y look um but obviously significantly smaller well that's that's where the twist is so if if I think about this problem the new
• 86:30 - 87:00 model y will look very like the model 3 which means it'll be lower and sleeker I think we all agree on that every car will have to have the foundational floor which is the battery pack so is there a way of instead of doing the unboxing which is extremely difficult and requires a lot of vertical space maybe just front and back and have two different or three different variations like slot them together around the floor but then again how do you work well they can work easily with the roof and the genius of the Tesla the roof is glass so it doesn't need that solid part
• 87:00 - 87:30 there but I'm trying to figure out how they if it is front and back how they squeeze them together if that's even an option yeah yeah I think that they those castings will will provide some of the ability to do that um in a way that is different than what they're doing with the three I wish I knew what the three line looked like I wish i' had a
• 87:30 - 88:00 uh an actual tour of the Freemont Factory I think that would really help oh they won't do it there I don't think it's ready I think I think they've got the I think they have the mimicked or testing production line already built behind that big curtain in Giga Texas because one quar of the floor is like a secret space by the way if you can pop up the chart we just hit 233 on the price so nice it's getting stronger into the coal which is a little bit of
• 88:00 - 88:30 positiveness for the people out there who wondering what stock price is so it's not selling off at all broke through that resistance of 233 sorry to disrupt yeah I'm just processing the idea that you know I I had assumed that every line that they are that they have today was going going to undergo some upgrades that gave them more capacity yeah except for S and X
• 88:30 - 89:00 probably but it is possible that they are just going to like supercharge some lines in maybe Shanghai and Giga Austin um and then maybe potentially do something with the yeah yeah and that's why I'm thinking it'll be a front and back together because the existing lines are linear they don't
• 89:00 - 89:30 have the ability to make them vertical and coming at the car from four angles at the same time uh just one Theory and also if you can share that deck again one of the thing the bingo card items is a lot of people are asking about SpaceX um no sorry wrong slide this one uh I see this all the time how do you guys get exposure to SpaceX and will Tesla shareholders get access or a special you know if you have 10,000 shares of Tesla you can get the option
• 89:30 - 90:00 to buy why, shares of SpaceX because it's a pain the ass to buy through Arc or some of the other funds because it's not enough concentration of the asset how are you guys approaching this and do you believe there will be a special offer for Tesla shareholders I don't see a reason for them to go public anytime soon I know that Elon talked about the potential for them to do that now that the revenues for starlink are are getting better but
• 90:00 - 90:30 I think with all of the headwinds that Elon has faced on a you know lawfare front over the past couple years if I was in his position I would be a lot less excited about like I think they have all the liquidity they need they can raise all the money that they need to raise they've got plenty of cash flow they can you know if uh if shareholders or employees uh you know want to liquidate some shares I think there's plenty of
• 90:30 - 91:00 ability to do that right now so I would personally just be very surprised if SpaceX actually went public anytime in the Super near term even though obviously I'd love to have exposure yeah and Playing devil's advocate too would you want to be invested in a company that's planning to go to Mars because that's going to be a big money sync anybody EMT are you in SpaceX yeah I mean I think it's your time Horizon I
• 91:00 - 91:30 think uh Mars colonizing Mars could become very very profitable if your time Horizon is long enough but I think the starlink is the real SpaceX uh closer term uh investment uh you know incentive is how big and how fast can starlink grow you know and to me that's the the big biggest part of the valuation of SpaceX currently and the other question on my mind they've Illustrated that they can
• 91:30 - 92:00 turn on you know terrestrial cellular coverage through SpaceX if that's the case Elon becomes personal nonr with every mobile cell phone company in the world which is another an inviable position to be in because they will just destroy you could have your cell phone package and your mobile internet package on the back of your boat or whatever and that's it when when do you guys think yeah ex and to that point when do you think they're going to allow they're going to include starlink into you know
• 92:00 - 92:30 into the Tesla cars is it going to be one of these next models is it going to be the Juniper is it going to be just an option they offer on the S and the X at first you know they already have test cars with it apparently some somewhat built in I mean it seems obvious to me that you would just add Starling to every car you make sooner or later I think the RFID radiation would be a concern for many not to have that running the whole time in the vehicle but that's just tinfoil Hat Thing concern um and you you can easily put
• 92:30 - 93:00 the mobile one on the back of a cyber Tru and I can run off that well easily is a m I have it and I have the um some I had to get some third party mounts and probably if I was like a handyman at home I would it' be easy for me but I'm not the biggest handyman so it's like sitting in my garage I'm waiting for a friend of mine to survey hand to help me put it on my cyber truck but I would love it if Tesla factory installed it on my when I bought it I'd pay them you know whatever for their option for that it definitely would be interesting as an option I I expect it to come
• 93:00 - 93:30 standard on you know cyber cabs and Robo Vans um for sure I don't know if it would be something that would come standard before then or not that would be definitely a great uh option to have on on new vehicle sales yeah I mean the gaming the streaming you know they want it to be like a experience in the robo cab and the the the robo uh so it'll be I think for sure on
• 93:30 - 94:00 those things but that's a couple years out before they're really produced so I wonder if before then it'll be an option on some of the Tesla lineup especially I feel like cybertruck is a great fit for it because you know if you're going out in the middle of nowhere with the Cyber truck you definitely would benefit from having that onboard connectivity yeah I just want it as like Anyway in my cyck so my Cy trcks in my
• 94:00 - 94:30 driveway it's like next to my office my home office also like a nice backup contingency for my home you know landline if something goes out I just plug right into the wi I turn on the Wi-Fi in my cyber truck while it's parked in the garage and it works for the house from there easily too it's amazing and uh I think many people at the cusp because is but what is it it's only 120 bucks per month whereas most highspeed at home is $100 and uh I can't remember what the
• 94:30 - 95:00 mobile version is but is the mobile good enough to run your home and take it with you when you're away from home so that' be neat going for a transatlantic Crossing or something yeah I think so I mean unless you're like have a bunch if you have like a bunch of people like streaming at the same time and gaming maybe I don't you know it seems like it's more than enough for for me and my family the the uh mobile star link would be but I you know we don't have a bunch of you know kids streaming crazy video games at
• 95:00 - 95:30 the same time that I hear takes up a lot of bandwidth cool well so let's recap here for those who may just be joining the stream um welcome we've got the Tesla earnings call coming up here shortly we've already looked at the shareholder deck and the financials pretty big beat on number of all the most important metrics you know slight Miss on overall Revenue um but net profits above
• 95:30 - 96:00 expectations EPS was uh quite a significant beat even a beat with uh if you factored out the regulatory uh the Rev credits and um so exciting to see the performance we've got the let's see stock price is responding the market is responding quite positively to what we've seen so far and uh yeah heading
• 96:00 - 96:30 into the earnings call here uh shortly uh scheduled about 10 minutes from now we'll see if Tesla's on time and if you've noticed yes Farzad is not here with us today he's actually uh today is his anniversary so happy anniversary Farzad and Cindy hope they are having a great afternoon not having to sit here glued to the uh stock price and uh
• 96:30 - 97:00 listening to all of us ramble on uh our pontifications for for Tesla in the future yeah and I think the big the big takeaways to summarize the most standout points for me is a 23% earnings beat and if you look at all the retail expectations it was way lower everybody expect expected it to miss and not hit 60 cents instead 72.5 cents uh the other big thing for me was the fact that
• 97:00 - 97:30 cybertruck has reached profitability in just three quarters on a third of what their scale volume will be which is staggering to think of um any other big things jump out it you guys oh your free cash flow uh one and a half 1 Point 1.75 billion overe expectations and that is probably the core key metric that I'm most interested in anyway I think I think was uh 2.72 versus 1.9 billion yeah to me what's I think is the
• 97:30 - 98:00 Outlook I'll let you go to Second Matt sorry didn't but the Outlook the product Outlook where they kind of reaffirm there's a lower cost uh vehicle for the first half of 25 to prod be start production and separately is the purpose-built robo taxi with an unboxed manufacturing strategy so it's not like the same vehicle being repurposed as a lower cost vehicle you know so that to me that um I think was a big a big uh reason why the Stock's up sorry Matt
• 98:00 - 98:30 yeah I was just going to say you know the highlights for me on on the energy side that was a very big surprise 30.5% gross margins and guidance for Q4 to be at 9 gwatt hours or higher of deployments so uh both of those were a lot higher than I was expecting so uh very very good news on the energy side and um I think people are going to need to start kind of re underwriting that I was just doing some more math kind of the background of okay if they do nine or 10 gwatt hours a quarter you know at these prices and at these margins you're
• 98:30 - 99:00 at the point where you're getting over a billion dollars of uh gross margin contribution from the energy business and that's like now that's like next year essentially in the coming quarters you'll you'll be at that run rate so I mean if even if you kind of tax effect that you're at like roughly a dollar of earnings contribution on the energy side uh in the very foreseeable future um and with that very uh the higher growth rate than you have on auto motive going forward so so that's you know I think we're kind of in this territory where analysts are going to have to really start doing their diligence on the energy piece of the business and start
• 99:00 - 99:30 modeling that out separately because it really with how high margin it is and how quickly it's growing uh it really is starting to have an outsized impact I think on on valuation even higher than I thought and I've thought about this for a lot by the way I just found a little Easter egg in the report as well uh under the battery powertrain manufacturing section uh they talked about the Cyber cab it'll be built on our next Generation platform which includes a new powertrain with an estimated 5.5 mile per kilowatt hour
• 99:30 - 100:00 that will be our most efficient powertrain yet and of course Q3 they produced their 100 millionth 4680 that's huge by the way my cyber truck is more efficient than my model X which I have to scratch my head as to why I know em you got the same Fleet don't you as me yeah I love the don't you think the Cyber truck is the best product by far I mean I love my model X but the Cyber truck I've had it about a year I still love it it's such a delight to drive it's quiet it's comfortable and the FSD is extremely precise there's a there is
• 100:00 - 100:30 a Delta between Hardware 3 and harder 4 no doubt about that but I actually calculated 2 and a half thousand miles I got exactly 3.48 miles per kilowatt hour wow which uh the the X gets about 3.33 if I'm not mistaken and I measure this stuff religiously like I measure everything else but um I I was complet Blown Away by that efficiency now I do Drive pretty easy I'm not driving like a mad man because I have to still better than the model X I'm assuming you're
• 100:30 - 101:00 driving the same roads as both both cars yeah exactly is that at what at what speed is that uh I do I normally don't go over 72 I hit 80 when I need to get out of trouble but uh keep it around 72 and keep the internal temperature air conditioning at 72 as well so 72 mph 72 degrees fit uh sometimes I use the cool seat as well instead of air conditioning because I find that's probably more efficient than cooling the whole car but I could be wrong there I need a
• 101:00 - 101:30 scientist to test that out hence what do you think heat the cool the chair or the whole car probably the chair I would think I mean it depends on their system and I haven't seen a detailed breakdown on that yet but I would think the chair yeah these are first world problems ladies and gentlemen sorry yeah see I'm just waiting for them to release unsupervised robot taxi in Florida so once they do that put my water white into that and then I can get my cyber truck so Tesla if you're
• 101:30 - 102:00 listening California Texas and Florida yeah one more question real quick speaking of the robot te nicoo on that point is how many people do you think there are like us maybe just in the Tesla Community waiting for the unsupervised uh Robo taxi to become official to start buying a bunch of like a dozen cars to have their own little Robo taxi Fleet business I'm s personally thinking about hard really thinking about doing that and I think
• 102:00 - 102:30 there's a lot of people I would say of the people who have purchased FSD or have it like there's two there's three types of people people who don't know FSD exists people who discovered FSD and just have a subscription but don't really get the whole point of it of what it can be and then there's the People Like Us that really understand what's going on so the people who actually understand what's going on I would say at least 90% of them are waiting yeah and that's that's one of the topics that I think you know it'll
• 102:30 - 103:00 be sadly another typical first mover Advantage I would say get in early get in hard but I do know people that are stacking mini fleets because prudently you should be able to make 20 maybe on a stretch 30,000 a year per vehicle if you can buy a secondhand model 3 or model y from Herz or something like that and then turn it into your Fleet and become a shepherd yeah you go five of them that's enough to retire on no Matt and I guy in Europe Mr Green was like 5,000
• 103:00 - 103:30 Teslas but they're probably all like Hardware one probably a lot of old car I think they're mostly Hardware 3 actually but they do have a lot of like older Model S's and everything like that but the the interesting thing about them is their business model just kind of works on its own because the power train on these lasts so long so you know the banks will only underwrite for one lease term but they they're finding they can just take it and write a second lease on a used vehicle uh which works pretty well so and then they've got this upside optionality of autonomy um but I wouldn't want to be be H into the EU
• 103:30 - 104:00 regulatory regime in the way that they are which is uh rather unfortunate yeah I've actually seen Florian is uh he's been putting out on social media that he wants to partner with 30 seconds local people um here in the United States who who want to be Shepherds so yeah I do have the uh the stream pulled up right now it's just music so okay as soon as we hear something besides music are we
• 104:00 - 104:30 talking about longevity of these cars I have a more than five and a half year old model X and my range is longer than when I first bought it so there's been no dication or whatever depletion of battery range in this car after over 50,000 miles in 5 and a half years so it's quite incredible I can hear dance music yep yeah I I I think most people who understand what tus was doing I I
• 104:30 - 105:00 think they would put their existing vehicle into the fleet if nothing else just like it's it's just prudent right if especially if I want to update what Tesla I'm driving if I want a newer Tesla like I don't want to like quote unquote take a loss on mine or sell it for less or trade it in i' rather just put in the fleet have at least break even if not make me some beer money and I can go buy my next Tesla stock at 234 that's crazy because it was only an
• 105:00 - 105:30 expected 15% move or 15% a $15 move yeah and Tesla tends to normally pretty much fall in line with the expected move this is Way Beyond I hope that the answer to the first two questions takes another leg higher if Elon kind of goes into some detail he might refrain from saying anything and say pass will talk about a future product releases that's what he might do but if he because it's two the first two questions if he does like talk about it with some detail I think that
• 105:30 - 106:00 could really be good if if he does that if he pass on it I hope he says everybody guys how many times I have to tell you this ask better questions can't talk I don't think he answers those seriously it's like come on ask better questions like this is like remember when golly like blew up because the whole YouTube thing it's like what's happening are we becoming just as bad with these questions yeah I actually had the exact
• 106:00 - 106:30 same thought I was like man these questions I I wish we could have a another go to YouTube move uh moment and just hand the mic over to G and Rob and let them ask questions that are not terrible law of the commons my friend yeah ever since they told Rob to stop pushing his own questions on his on uh Tesla daily I think the quality has gone way down 100% cut his
• 106:30 - 107:00 hair yeah there's a another question for the audience um where do you see the price in 12 months my stab is 350 to 400 may be higher if unsupervised FSD and robot taxi goes launch launches live in California and Texas thoughts Around the Clock here I think uh if supervis unsupervised Robo taxi starts going oh we started oh here we go can you share your screen
• 107:00 - 107:30 head inv relations and I'm joined today byan musk and a number of other Executives our Q3 results were announced at about 3 pm Central Time in the update deck we published at the same link as this webcast during this call we will discuss our business Outlook and make forward-looking statements these comments are based on our predictions and expectations as of today actual events or results could differ materially due to a number of risks and uncertainties including those mentioned in our most recent filings with the
• 107:30 - 108:00 SEC during the question and answer portion of st's call please limit yourself to one question and one followup please use the raise hand button to join the question Q before we jump into Q&A Elon has some opening remarks Elon thank you uh so to recap as someone seeing um uh something that of Industry I seeing year over year declines and what volumes in Q3 uh Tesla at the same time has achieved record deliveries in fact I think if you look at EV companies uh worldwide to the best
• 108:00 - 108:30 of my knowledge no EB company is even profitable and and I'm not to the best of my knowledge there's no EV division of any company of any existing a company that is profitable so it is notable that Tesla is profitable despite uh very challenging water environment um and uh and and this quarter actually is a reg Q3 for us
• 108:30 - 109:00 um so we produced our 7th million vehicle actually just yesterday so congratulations to the teams that made it happen in Tesla that's staging the immense amount of work to make 7 million cars um so uh let see we also have energy storage business is um growing like wildfire uh with strong demand for both mega pack and power wall um and as people know um on October
• 109:00 - 109:30 10th we laid out a vision for an autonomous analy future that I think is very compelling you know the Tesla team did a phenomenal job though with um actually giving people an opportunity to experience the future uh with where you have humanoid robots walking among the crow not not you know with the can video presentation or anything but literally walking among the crowd serving drinks and whatnot and
• 109:30 - 110:00 um and we had 50 autonomous vehicles there were 20 cyber caps but there were an additional 30 model y operating fully autonomously the entire night uh carrying thousands thousands of peoples thousands of people doing um with with no incidents the entire not so and for those who went there that I it's with emphasizing that the the Cyber cap had no steering wheel or brake or accelerator pedals meaning there was no
• 110:00 - 110:30 there's no POS there was no way for anyone to intervene manually even if they wanted to um and the whole night went very smoothly so um regarding the vehicle business we are still on track to deliver more affordable uh models starting in the first half of 2025 um you know this is I think probably people are wondering what should they assume for vehicle uh vehicle sales growth next year and at the risk of to take a bit of
• 110:30 - 111:00 risk here I I I do want to give some some rough estimate which is I think 20 to 30% vehicle growth next year um you know not withstanding negative external events like if there's some Force maure events like some big war breaks out or interest rates go sky high or something like that then you know we we can't overcome massive Force measure events but I I think with our lower cost
• 111:00 - 111:30 vehicles with the Advent of autonomy something like a 20 to 30% growth next year is is uh my best guess um and uh and then and then cyoc cap reaching volume production in 26 we do feel confident of cyab reaching volume production 26 not just starting production reaching volume production at 26 um and that you know that that should be substantial growth I we're aiming full
• 111:30 - 112:00 you know at least 2 million units a year of of cyoc cab um that that'll be in more than one Factory but I think it's at least 2 million un year maybe 4 million ultimately um so uh yeah these are just my best guesses but if you ask me what my best guesses that those are my best guesses um the uh the 46 the the cell 4680 lines the team is actually doing great work there um the 4680 is uh rapidly
• 112:00 - 112:30 approaching the point where it is the most competitive cell so when you consider the the fully the fully landed the cost of a of a battery pack um fully landed in the US net of incentives and duties uh the the 4680 is tracking to be the most competitive me lower cost water fully considered than any other alternative
• 112:30 - 113:00 which is not quite there yet but we're we're close to being there which I think is uh extremely exciting and we've got um several a lot of ideas to go well beyond that so if I I think there's if we execute well the 46 80 will have the the Tesla internally produced cell will be the most cost competitive cell in in certainly North
• 113:00 - 113:30 America I tesed to a tremendous amount of hard work there from by the team so um that that's say we we'll continue to buy a lot of cells from our competitors so T it's not to make to to provide to to make Sals just internally so I don't want to set off any longw bells here uh we we're also increasing uh substantially our vehicle output and our stationary storage output so we need
• 113:30 - 114:00 a lot of cells um and most of them will still come from suppliers but but I think it is it is a some good news that the Tesla internal cell um is likely this track needs to be the most competitive in the US so with respect to autonomy um as people have are experiencing in the cars um really from week to week uh there are
• 114:00 - 114:30 significant improvements in the miles between interventions um so with the the new version 12.5 the release of full self driving inside truck the the combining the code into a single stack so that the U City driving and the engine highway driving our our one stack which is a big Improvement for the highway driving so it's it's it's just all neural
• 114:30 - 115:00 Nets and the release of Ashley SM summon um we try to have a sense of humor here at Tes uh and we're also so that that's 12.5 version 13 of empd uh is going out soon um sure we'll elaborate more on that later in the call um we expect to see some rough 506 fold Improvement in
• 115:00 - 115:30 miles between interventions compared to 12.5 um and actually looking at the the year as a whole of the Improvement uh in miles between interventions we think will BR at least three orders of Ang to so um that's that's a very dramatic Improvement in the course of the year and uh and we expect that Trend to continue next year so
• 115:30 - 116:00 um the current the current internal expectation ID internal expectation for uh the Tesla FSD having um longer miles between intervention than human is the second quarter of next year um which means it may end up being the third quarter but it's it's next it seems extremely likely to be next year sh do you want
• 116:00 - 116:30 to yeah mentioning miles between critical interventions um yeah like you mentioned Elon we already made a 100x uh improvement with 12.5 from starting of this year and then with v13 release we expect to be uh 1,000x from the beginning from January of this year on my production release software um and this came in because technology improvements going to end to end uh having higher frame rate uh partly also helped by Hardware fors uh more
• 116:30 - 117:00 capabilities um so on uh and we hope that you know we continue to scale the neural network the data the training compute Etc by Q2 next year we should cross over the uh average human mins for critical intervention or Collision in that case that that is just um unboned our internal estimate yes yeah um so um that that's not sandbagging or anything else
• 117:00 - 117:30 um our internal estimate is Q2 of next year to be uh safe than human and then to continue with rapid improvements uh thereafter um a lot um vast majority of humanity has no idea that those buy themselves so especially for something
• 117:30 - 118:00 like like a model 3 or model y it looks like a normal car so you don't expect a normal car to be able to be intelligent enough to drive itself cyab looks looks different cyber truck looks different but model wi mod three are look they're good-looking cars but look they look fairly normal you don't expect a b normal looking car to have the intelligence you enough AI to be able to drive itself but it does um
• 118:00 - 118:30 so we do want to expose that to more people and uh and so we're doing every time we have um as significant Improvement in the software we'll roll we'll roll out another sort of 30-day trial so to encourage people to try it again and uh and we're all seeing a significant Improvement in adoption um so the the the take rate for FSD is has improved substantially especially after the 1010
• 118:30 - 119:00 event um yeah so so there there's no need to wait for robot taxi or savab for to experience full autonomy we expect to achieve that next year with the with our existing vehicle item um I wanted actually smart sumone gives a small taste of what it's going to look like uh the car able to drive itself to the user within private parking lots currently it's speed limited but then
• 119:00 - 119:30 it's going to quickly be increase and we already had more than a million usage items of smart s yep so um and we actually we have um for TLA employees in the Bay Area we already are are offering a right healing capability so so you can actually you with the development app you can request a ride um and it'll take you anywhere in the Bay Area we we do have a safety driver
• 119:30 - 120:00 for now but the software required to do that um we've we've developed I mean David do you want to elaborate on that yeah sure David um we showed uh some screenshots of this in the q1 uh shareholder deck and um you this is real we've been testing it for the part of the year and uh the building blocks that we need in order to build this functionality and deliver it to production we've been thinking about working on for years um it just so happens that we've used those building blocks to deliver great features for our
• 120:00 - 120:30 customers in the meantime such as sharing your profile synchronizing it across cars so that every single car that you jump into whether it's you know another car that you own or a car that somebody's loan to you or a rental car that you jump into it looks exactly like yours everything synchronized seat mirror positions you know media navigation everything is the same just what you would expect from from one of our Robo taxis um but you know we gave that functionality to our customers uh right now because we built it uh intending for it to be used in the
• 120:30 - 121:00 future um releasing that functionality now all the and then cyber security that we knew we're going to need to deliver that functionality um sending a navigation destination from your phone to the vehicle um and so you know you're doing that now with the the ride hailing app but it's something that we've uh made available the customers for years seen the progress on a route in the mobile app that's something you'll need for the r inhaling app but again we released it in the meantime so it's not like we're
• 121:00 - 121:30 just starting to think about this stuff right now while we're building out you know the early stages of our ride healing Network we've been thinking about this for quite a long time and we're excited to get the function out out there yeah and and we do expect to roll out um R hailing in um California Texas next year to the public um now the California is someone there's quite a long regulatory approval process I it shouldn't I think we should get approval next year but but it's continued upon regulatory approval uh Texas is um a lot faster so it's uh i'
• 121:30 - 122:00 say like we're um we'll definitely have available in Texas um and probably have it available in in California subject to regulatory appr um and then and and maybe some other states actually um next year as well but at least California Texas um so I think that'll be very exciting there's really a profound change U Tesla becomes more than a sort of
• 122:00 - 122:30 vehicle and you know battery Manufacturing Company um at that point so um we published a uh Q3 Vehicle Safety report uh which shows one p for every s milon miles of water pilot that compares the US average of water crash roughly every 700,000 miles so it's currently showing a 10x safety Improvement relative to the US
• 122:30 - 123:00 average and we continue to expand our AI training capacity uh to combinate the needs of both FSD and Optimus um we're currently not not a training compute constraint that's probably big soing factors that the the FSD is actually getting so good that it takes us a while to actually find find um mistakes um you start getting to where it could take 10,000 miles to find a a mistake it's a it takes a while to
• 123:00 - 123:30 actually figure out which is is this is a Sofer Bol better than is Sofer Bol a better than Sofer Bolt b it actually takes you a while to figure it out because neither one of them makinging mistakes what takes take a long time to make mistakes so that's actually the single limit big limiting factor is how long does it take us to figure out which which which version is better um sort of high class problem um obviously having a Dr Fleet
• 123:30 - 124:00 um is very helpful for breing breaking this out and then with Optimus we show we show a massive Improvement in optimus's dexterity movement on October 10th and our next gen hand and forarm which has 22 degrees Freedom double which is double the the prior U um hand forong um it's it's extremely human-like say has much better tactile
• 124:00 - 124:30 sensing um it's really I feel confident in saying that we have most advanced humanoid robot by Longshot and we're moreover the only company that really has all of the ingredients necessary to scale um humanoid robots um because the the things that what other companies missing is they they're they're missing the AI brain and they're
• 124:30 - 125:00 missing the ability to really scale to very high volume production so you sometimes see some impressive video demos but what but they they like the they like the localized Ai and the um vo to scale volume to very high numbers um as I've said a few occasions before I think Optimus will ultimately be most OP and I think has good chance of being
• 125:00 - 125:30 the most valuable product ever made for the energy business that's doing extremely well and there the opportunity I had is gigantic the L um MEAP pack Factory uh reached 200 MEAP packs a week which is now 40 G Gatt hour a year run rate and we have a second Factory in Shanghai that will begin with a 20 GW hour a year
• 125:30 - 126:00 run rate u in q1 next year so just next next quarter and U that that'll also scale up it won't be long before we're shipping 100 gwatt hours a year stationary storage and and that that I mean that that that'll ultimately grow I think to to multiple terawatt hours per year it has to actually in order to have a sustainable energy future if you're
• 126:00 - 126:30 not at the ter scale you're you're not really moving the deal so if if you look at our Mally very complicated U last master plan which I think actually is too much detail maybe I'll ask Gro to analyze it and shorten it up yeah give us the ldr on the last master plan but we we we showed in that master plan that it is possible to take all of Earth to a fully
• 126:30 - 127:00 sustainable energy situation uh using sustainable energy power generation um and batteries and electric transport um and there are no fundamental material limitations like there's not some very rare material that that we don't have enough of on Earth we actually have enough of raw materials to yeah um take all of human civilization make it fully sustainable and even if civilization
• 127:00 - 127:30 dramatically increased its electricity usage could still be fully sustainable you know but one way to think of um the progress of a civilization space out a little esoteric but is percentage completion of CF scale so C of scale one would be you're using all the power of of a planet we were we're currently less than 1% on cter level level one level two would be
• 127:30 - 128:00 using all the power of the Sun and level three all the power of the Galaxy so we got a long way to go long way too um when you think in cter ship terms it becomes obvious that by that the by far the biggest source of of energy is the everything else is in the noise
• 128:00 - 128:30 so um so in conclusion Tesla is focused on building the future of energy transport Robotics and Ai and this is a time when others are just focused on managing around near-term Trends uh we think what we're doing is the right approach and if we execute on our objectives and I think we will Tesla my prediction is Tesla will become the most valuable company in the world and probably by long by long shot
• 128:30 - 129:00 um I want to thank the t Team once again for strong execution and a tough operating environment and we're looking forward to building an incredibly exciting future thank you great thank you very much Elon and that has some open remarks as well yeah thanks a results were more on positive and once again demonstrate the skill to which businesses evolved over the years with the generation of record operating cash flows of 6.3
• 129:00 - 129:30 billion our Automotive revenues grew both quarter on quarter and year on year while we had unit volume growth we did experience reduction in asps primarily due to the impact of financing incentives as a reminder we're providing these incentives primarily using third party Banks and financial institution and recognize the cost of these incentives as an upfront reduction to them we released FSD for cyber truck and other features like actually smart Ser
• 129:30 - 130:00 like El talked about in North America which contributed 326 million of revenues in the qu we continue to see elevated levels of regulatory credit sales with over two billion of revenues so far this year we expand on this at an industry level China continues to outperform us and Europe by a factor of three and if there is something to be learned from that this gives a signal of what is to come in other regions as
• 130:00 - 130:30 customers acceptance of e growths and we feel that is the right strategy to build affordable and more compelling needs our Focus remains on growing unit volume while avoiding a buildup of inory to support this strategy we're continuing to offer extremely compelling vehicle financing options in every when you compare any vehicle in our lineup with other oems believe our vehicles provide much
• 130:30 - 131:00 better value particularly when you consider the safety features performance and unparalleled software functionalities like David also talked about include also what sh had talked about around autonomy music options parental controls and much more while every vehicle in our lineup com up with these capabilities there is an awareness Gap not just with Buyers but at times even with existing owners we plan on making these more visible in our
• 131:00 - 131:30 interactions with both existing and future customers Automotive margins improved quarter over quarter as a result of FSD feature release discussed before increase in our overall production and delivery volume contined benefit from commodity pricing and more localized deliveries in region which resulted in lower fre and duties sustaining these margins in Q4 however will be challenging given the current economic
• 131:30 - 132:00 environment not that we are focused on the cost per vehicle and there are numerous work streams within the company to sree that cost without compromising on customer experience yeah and something that do a helpful hopefully helpful macro trend is if there's a decline in in interest rates this has um massive effect on the on Automotive demand the V vast majority of people it's the demand is driven by the monthly
• 132:00 - 132:30 payment can they monthly payment so um think most likely will see continue decline interest rates which helps with affordability Vehicles yeah I mean that is one Trend which we observed in the industry that you know because of the affordability being impacted because of interest rates people are holding on to the cars longer especially in the US and that is actually having an impact on overall industry
• 132:30 - 133:00 too uh as we discussed uh earlier as we discussed in par ERS energy deployments fluctuate quarter on quarter due to customer Readiness location of orders being fulfilled and not necessarily an indicator of demand of production within the quarter while we did see it decline in Q3 we expect to grow deployment sequentially in Q4 to end the year but more than double of last year energy margins in Q3 for a record
• 133:00 - 133:30 at more than 30% this is a function of mix of projects being deployed in the quarter not that there will be fluctuation in margins as we manage through deployments and ouring our Pipeline and backlog continue to grow quarter over quarter as we fill our 20 25 production slots and we're doing our level best to keep up with the demand just coming back on Automotive margins uh I talked about sorry uh I
• 133:30 - 134:00 talked about what is happening one other thing which I want to also share is that we're that you know we will continue to keep whatever we can to sque like I said before about squeezing out the cost but this is something which we also are very capable of I mean just in Q3 we reach our lowest cost per vle and that is a trend which we want to keep focus
• 134:00 - 134:30 on then going on to service another we continue to show improvements in Q3 this was a result of better performance both in our service business which includes Collision part sales and merchandise and continued growth is supercharging these Fleet based revenues will continue to grow as the overall Fleet size increases our operating expenses declined quarter over quarter in a year- on-year basis this is partially due to the restructuring we undertook in
• 134:30 - 135:00 kim2 cost saving from these initiatives were partially offset by increase in cost related to our efforts we've started using the GPU cluster based out of our Factory in Austin ahead of scheduled and our on track to get 50k gpus deployed in Texas by the end of this month one thing which I'd like to elaborate is that we're being very judicious on our AI compute span too and saying how best we can utilize the existing infrastructure before making further
• 135:00 - 135:30 Investments on the capex front we had over 3 and a half billion in the quarter this was a sequential increase did you guys lose audio yeah we lost Tesla yes but this
• 135:30 - 136:00 this call is absolutely freaking mind-blowing I'm catching 16 major nuggets AI comp sorry we not expect the capex for the year to be in excess of 11 billion we shared our vision for the future at the V robot event at the beginning of the month t team is hyper focused on delivering on that mission all efforts are underway to make it a reality while we've achieved significant progress this year it will take time to
• 136:00 - 136:30 get this as we Pioneer new and Incredibly complex Technologies and navigate a fragmented regulatory landscape future is incredibly bright and I want to thank the Tesla team once again for all the help great thank you very much feob uh now we'll go to investor questions the first one is is Tesla still on track to deliver the more affordable model next year as mentioned by Elon earlier and how does it in line with your AI and product
• 136:30 - 137:00 radb sure I mean as Elon and vibol both said you are in plan uh to meet that in the first half of next year our mission has always been to lower the cost of of the of of our vehicles to increase the adoption of sustainable energy and transport um part of that is is lowering the cost for our current Vehicles which is where uh all of the person own vehicles that we sell today come in but the next stage in that really is it fits into AI road map is when we bring in Robo taxis which lowers the initial cost of of getting into an e and those that's
• 137:00 - 137:30 really where we see the marriage of EV road map and the AI road map yeah it'll be like with with with incentive Sub sub 30k which is kind of a key threshold great thank you very much uh similar question next when can we expect Tesla to give us the $25,000 nonroot taxi regular car model we're not making it on yeah all
• 137:30 - 138:00 our vehicles today are I think we've made very clear that we we're the future is autonomous um I mean it's going to be you and I actually said this many years ago uh but that uh my strong belief and I believe that is panning out to be true so it'll be very obvious in retrospect is that the future is autonomous electric vehicles um and uh non-autonomous gasoline vehicles in the future will be like riding a horse and
• 138:00 - 138:30 using a footb um it's not that there are no horses yeah there are some horses but they're unusual they're Niche um and uh you know so so just everything's going to be electric autonomous um I think this this is blind like it should be frankly blindingly obvious at this point that that is the future um so a lot of Automotive companies or most Automotive companies have not not
• 138:30 - 139:00 internalized this which is surprising um because we've been shouting this from the rooftops for such a long time and it will accre to their detriment in the future but all of our vehicles in the future we even to yes all vehicles that we we really made all 7 million Vehicles vast majority are are capable of autonomy um and um you know we're currently making on the order of 35,000
• 139:00 - 139:30 autonomous vehicles a week um you compare that to say we more entire fleet it's less than they have less than a thousand cars we make 35k a week yeah and our cars look normal yeah they mostly look normal the Cyber truck looks yes thankfully you know uh looks abnormal um and then the you know cyber cab SL taxi you know we wanted to have something futuristic looking I think it
• 139:30 - 140:00 does look futuristic um it's worth noting with respect to the Cyber cab it's not it's it's actually not just a revolution in vehicle design but a revolution in vehicle manufacturing that is also coming with the with the Cyber cab uh the the cycle time like the um the units per per hour of of the Cyber line uh is like this is just really something
• 140:00 - 140:30 special I mean this is prob be half order of Mag better than other car manufacturing lines like like like like like not not in the same league is what I'm saying not in the same league um so so it's it's you know and I I said like you know several years ago that the maybe the most the hottest T of prod to copy the factory you just
• 140:30 - 141:00 like buy a factory um CA verse engineer a factory it's to my yeah it's like you know yeah um so the and and as we so we're rapidly evolving I mean Ving technology so um so anyway there's like basically I think having a regular 25k model is pointless yeah it would be silly like it'll be completely at us with what we believe in
• 141:00 - 141:30 in in autonomous world what matters is the lowest cost per mile of of efficiency of that vehicle and that's what we've done with yeah with the Rope taxi exactly autonomous it's fully considered cost per mile um is what matters and if you try to make a car that is you know essentially a hybrid manual automatic card it's it's it's not going to be as good as a dedicated autonomous car um
• 141:30 - 142:00 so yeah C Cab is is just not going to have steering wheels and pedals sign optimized for autonomy but it it'll it'll you know cost on the order of cost roughly 25k so it is a 25k car and you can you will be able to buy one on an exclusive exclusively if you want so just what have steer if you don't need them great thank you very much um the
• 142:00 - 142:30 next question is what is Tesla doing to alleviate long wait times at service centers so we aim on solving problems at the source so at the factory before they can even affect our customers we believe the best service is no service and yeah really is don't even have them car doesn't break yeah exactly that's the best thing don't see anyone with the test sh you either do it REM fix the issue upstream or do it remotely do it through software they can be at work or
• 142:30 - 143:00 at home and you know car can be parked and we address fix the issue and we've partnered the field with service to make sure we're looking at the same issues and additionally just in Q3 and Q4 this year long we we have open and will open in total of nearly 70 locations and in North America we significantly expand the size of each location and have doubled the size last year compared to this year yeah I think I think there like actually a lot of Amit to having large service cers because you can you
• 143:00 - 143:30 can have specialization of Labor you can start you can start yeah should more Factory like um you know where you can have dedicated lanes for particular types of service and and it's way easier for somebody to come export in a few different types of repairs than in every repair exactly this this helped us with the base that these heavy repairs like clogging up a lane they dedicated lanes for different type of repairs and so it's through put matters and really treating it like a factory yeah this is this is where Tesla
• 143:30 - 144:00 structure I think Tesla has a structural Advantage relative to the rest of the Auto industry um because we make the cars and we service the cars whereas I think there's a bit of a conflict of interest with the the dealer model and the O the traditional OEM a dealer model where the dealerships make most of their money on service um and so they don't they obviously this incentive to reduce the servicing cost yeah whereas in our case we are incentive to reduce the servicing cost
• 144:00 - 144:30 because we we carry that servicing cost and we've got a good feedback loop with our with our cars the ex yeah be with the factory with the service leaders together and send fact people from the factor to the field and feel to the factory to see it firsthand provide suggestions for you know manufacturing as well as for engineering on design yeah so I view this as a structural a fundamental structural advantage of Tesla versus the rest of the Auto industry also doing a bunch of work on
• 144:30 - 145:00 the software side not only to automate you know Diagnostics um so identifying you know what needs to be done to a car before it comes into service but also automating all of the preparation work and aligning all the resources that are necessary in order for the car to be very efficiently worked on once it arrives so the parts are there like the lift is scheduled everything this is what's wrong with me the service please fix me and this is what's
• 145:00 - 145:30 wrong instead of a customer trying to translate the car is telling us directly and we're pulling that yeah yeah you don't most the time you don't need to diagnose the car when it arrives the car yeah this is like again fundamental technology advantage and structural Advantage compared to the rest of the order industry it's yeah I think it's underappreciated as to what all we are able to do and and that's why because like you said before most of our cars except for cyber Dru look the same yeah
• 145:30 - 146:00 right so people don't realize that it has so much capability yeah yeah yeah they they look better than other cars but but they they're not like obviously like super futuristic yeah great thank you very much uh the next question is uh please provide an update on the semi uh what will the next stage of growth look like and when will FSD be ready sure so as you we posted in the earnings progressing swiftly on the
• 146:00 - 146:30 build of the semi Factory in uh in our gigafactory in Reno um we've released all our major Capo expenditures for that program and we're on track to start uh pilot builds in the second half of next year with production starting in the first half of 2026 and ramping really throughout the year to to full production um semi you know growth will largely depend on our customers adoption the product uh well I don't think we're going to be demand limited on yeah which I say which is like theiner for for the semi because it's really a commodity of total cost of ownership yes exactly it's
• 146:30 - 147:00 it's uh we have kind of ridiculous demand for the semi um in that little where it's about how much do I spend to move per mile it's a no-brainer yeah fundamentally if if you've got a semi where the fully considered cost per mile per ton of Transport uh is better than diesel truck uh any company that doesn't adopt an electric semi will will lose it's not a it's it's not a subjective thing as like whether do you like comp I mean we like
• 147:00 - 147:30 we we want the style we want we want to have a good old semi- Tru but frankly if we made an ugly semi- Tru it wouldn't matter um and this is proving so in our fleets and in Pepsi's a partner um in fact the the Pepsi actually said last week they're having nobody want their drivers don't want to go back yeah yeah as soon as we give anyone the semi it's it's it's like the that that's like the choice it's the what they want to drive yeah yeah yeah that's like like so the like the most senior like their top
• 147:30 - 148:00 drivers well they get to drive the T the sem it's a it's it's it's the thing they want to drive it's it's it's super fun to drive it's also very easy to drive it's it's easy to drive and it rolls ass it's like Fast maybe too fast well but I mean like like you know like like you've seen like the videos of where like the like T Electric semi like you know can go uphill yeah speeding fast like the diesel truck cars yeah even cars um so
• 148:00 - 148:30 like it's responsive it's you you you know you know you floor it and that the truck actually Mo and that's a benefit not only for for the driver and for the goods but also for safety in terms of other drivers on the road you don't get stuck behind the semi you're not like yeah you know in a slow down situation in onr I mean how that plays into you know FST which is the second part of the question all of the semis have been since the couple hundred we've deployed already and and the ones that we'll be building next year and throughout uh the future have all of the hardware and the cameras necessary to to uh deploy FSD
• 148:30 - 149:00 and we're currently training with that small Fleet that we have and as soon as the fleet is trained and the neural that'ss are up you know we we'll get FSD onto that platform yeah I mean it' be a massive Improvement in uh driver fatigue you know because you uh at driver safety we've got sort of the anti- Jack knifing software where MH uh you know you don't have to worry about your braks overheating if you go down down a steep hill because because the we use regenerative like that that energy goes back into the pack actually when we
• 149:00 - 149:30 leave Renos it's just like it's it's like radically better than than a diesel ass it's what why the drivers love it great guys thank you very much our next question is when will Tesla incorporate X and Gro in all the Tesla vehicles I mean the these are relatively small fry things you know um but yeah the I think um we'll keep expanding you know
• 149:30 - 150:00 what what is available in the car on on the spot screen and um also improving like the browser so like just generally you can access anything you want in the car in fact for the Tesla you know once you get to full autonomy you actually want F A A system that is uh can do anything like if you want to browse the internet if you want to uh you know ask ask AI questions if you want to watch a movie if you want to play a video game if you want to do some productivity
• 150:00 - 150:30 thing you can do anything you want in an autonomous vehicle because you don't need to drive and so that's why the Cyber cabs got a nice big screen and a great sound system so you can watch it watch a great movie with it's like being like personal movie theater yeah personal movie theater um awesome yeah this is why we've been building this functionality adding gaming to the car uh adding M and other you know all sorts of different media applications to the car because you know
• 150:30 - 151:00 um car that's what you're gonna that's yeah the cars that we buil today some abundant games by the way people haven't tried it there's like uh castle doombad and polyopia and a bunch of really fun games in the car yeah we're we're constantly looking at you know what features that addic and we're paying attention to what's most commonly by cers yeah play castle doombad you w regret great thank you guys very much the next question is um Elon mentioned unsupervised FSD in California and Texas
• 151:00 - 151:30 next year um does that mean Regulators have agreed to it in the entire state for existing Hardware three and four vehicles no as we as I said earlier California loves regulation but they have a pathway yeah I mean there's a pathway obviously weo operates in California so there's just a lot of forms to SP out and a lot of approvals that are required um I I I mean I'd be shocked if we don't get approval next year but it's it's just not something we we totally control um but I think we will get approval next year in
• 151:30 - 152:00 California and Texas and and and towards the end of the year I will'll Branch out be Beyond California Texas I mean I think it's important to reiterate this like hting or certifying a vehicle at Federal level in the US is done by meeting fmvss regulations all our vehicles today that are produced that are to is capable meet all those regulations the Cyber C radiations and so the deployment of the vehicle to the road is not a limitation but is a limitation is what you said at the state level where they control autonomous vehicle deployment some states are relatively easy as you mentioned for
• 152:00 - 152:30 Texas yeah and other ones have halfways like California that may take a little longer other ones hadn't set up anything yet and so we will work through those state by state and I I do think we should have a federal um I agree like autonomous vehicles should be approved just should be it should be possible to Congress if you're listening let's get a federal AB there should be a f Federal approval process for autonomous vehicles um I mean that's that's how the fbss is started work Federal Motor Vehicle FN fbss is federal yeah so I mean in 2017
• 152:30 - 153:00 and 18 that we you know when Regulators started looking at it and it's really kind of stalled since then but we would appreciate and would support helping out with those reg it really needs to be like at National approval is is important um you know if there's a department of government efficiency I'll try to help make I did it for everyone not just Tesla um but uh you know just uh like like some some things in the US are state byst state regulated like for example insurance and it's like a it's incredibly painful to do it state byst state 50 states um and and uh I think we
• 153:00 - 153:30 should have there should be a national approval process for autonomy great thanks guys uh the next question is uh what is the plan for 2025 I think we're just talking yeah I mean basically talk through this there's a lot going on Elon already mentioned that we're working on cheaper models to come out I mean they have work which the team is doing to get the factories ready
• 153:30 - 154:00 today to try and make that happen Yeah by way the amount of work requires to make a lower cost car is insanely high but like it is harder to get like 20% of the cost out of a car than it is to design the car and build the entire Factory in the first place yeah it's like excruciating and it's and there's not a lot of movies made about the the heroes who got 20% of the cost out of a car but let me tell you there should
• 154:00 - 154:30 be God that is incredibly heroic it's a little change is it's not like yeah it's like they should be the heroes got 20% cost out of a car is like damn I respect to them it's like you know I think you probably could make a compelling movie but I it just no no like if you actually saw out hard if people actually saw out hard was to do that You' be like whoa that's damn hard um just yesterday we were talking about potting I mean
• 154:30 - 155:00 honestly like literally yeah I mean there's there's a lot of I do call it sort of like getting cost out of things it's kind of like it's like game of pennies it's like Game of Thrones but pennies you know first approximation you if you've got 10,000 items um in a car very rough approximation and each of them cost $4 then you have a $40,000 car so then if you want to make a you know a $35,000 car if going to get 50 cents on average out of the 10,000 items every
• 155:00 - 155:30 every part yeah and it's like you know and then obviously best is delete some parts in fact we found be able to delete a lot of parts um I'm very I'm I'm very excited about the the Cy cap uh design and and and the both you know how how we're rethinking the design of a car for the Cyber cap desig it offra high volume production and then designing machine that builds the machine uh that that I think is also revolutionary and it's
• 155:30 - 156:00 just there's no other car company that's even trying to do what we're doing like I even heard of it actually in fact I'm certain there is Noone like like I'm I think this this the on your machine that buils the machine like it's a it's in inherent like that it's it's it's designed to be like five times better than traditional Factory like cycle time
• 156:00 - 156:30 cycle time and like Park deletion movement I don't think any other car company has the same level of like integration of thought that we have when it comes to like when you design aart from a white sheet of paper who's going to make it where is it going to be made how's it going to be shipped how's it going to be assembled into the vehicle and like at any one point if something is done in a silo it becomes a bottleneck of either cost or time or efficiency but with the with the road taxi you know the development like we've
• 156:30 - 157:00 done a good job on combining all that and then like blowing up how it's made and saying it should be made this way and rethinking it all so it's the most efficient Factory possible that shows in our it will show in our capex efficiency when we deploy it shows in the number of Parts shows in the Simplicity of the vehicle but also how it performs in terms of like end user um State yeah yeah just to close out just on the energy front also in 25 we will have started manufacturing at the mefactory shankai uh we'll continue to increase
• 157:00 - 157:30 our overall storage deployments with power wall 3 we plan to continue expanding our supercharging Network getting more or on our Network 4680 is that cell ramp as Elon talking about that would keep going and then there's we also will have our lithium refinery starting to produce so there's a lot which is going on great yeah so many things like crazy thing is like Tesla is winning basically almost every single
• 157:30 - 158:00 thing we're doing um if we're not winning now we're on track to one and we where their entire large companies that that's the only thing they do yeah I mean it's it's a company there multiple companies within the company yeah TLA is like many companies with one yeah fastic thank you guys um just a few more uh what is going on with the Tesla Roadster fun things well I just like to thank our longsuffering um deposit holders of the Tesla Roadster um you
• 158:00 - 158:30 know the reason it hasn't come out yet is because it is it the Roadster is not not just the icing on the cake it's the cherry on the icing on the cake and so um you know our our our larger mission is is to accelerate the progress towards a sustainable energy future uh you know try to do things that maximize the probably the future is good for for Humanity and for Earth um and um and so that necessarily means that like the things like that are kind of like
• 158:30 - 159:00 deserted we' like we'd all love to work on the Tesla next year Tesla Rose be super it is super fun and and we are working on it but but but it has to come behind the more uh things the things that have a more serious impact on the good of the world um so just thank you to all long suffering uh tell Ro or deposit holders um and and and we are actually finally making progress on that um and uh we're we're close to finalizing the design on
• 159:00 - 159:30 that um it's really going to be something spectacular you know a friend of mine Peter teal uh you know people think Peter T and I Rivals we're really good friends to be clear you know pet Peter you know was lamenting uh how you know the future doesn't have flying cars well we'll see where to come yeah great thank you
• 159:30 - 160:00 very much um the next one is quite similar to other questions you've had so I might combine it with with the final question um so briefly could you just uh detail uh how robotaxi will roll out uh will it start with a test of deployed Fleet and then allow customers um to to add theirs on like a subscription model and then we'll harder 3 all fiveing the hardware 3 um what we saw with 12.5 was it was easier to make rapid progress with starting with
• 160:00 - 160:30 Hardware 4 and figuring out the solution and then backporting it to Hardware 3 iner of directory working on Hardware 3 given that Hardware 4 has uh more like fundamental Hardware capabilities I think that Trend will continue uh into the next few quarters as well but we first figure out the solution rapidly with ai4 uh and then back ported WR the kernels it just takes longer to Lop those things because it's not fundamentally supported in the hardware and it's emulated um but yeah initially
• 160:30 - 161:00 working on Hardware 4 backporting it to Hardware 3 yeah so it's actually the answer is we're not we're not 100% sure um but um but but as as a Shar mentioned um because uh by by some measures har 4 has has several times the capability of hardw 3 it's it's easier to to get things to work with hardw 4 um and then uh it takes a lot of effort to sort of squeeze that functionality into Hardware 3
• 161:00 - 161:30 um and uh you there there is some chance that that hardare 3 is does not achieve the safety level that um allows for unsupervised FSD uh you know there was some chance of that um and and if if that turns out to be the case we will upgrade those who have bought Hardware 3 FSD for free um and we have
• 161:30 - 162:00 designed the system to be um upgradeable you so and it's really it's really you know just s sort of switch out the computer type of thing um like the camera the cameras are you know they're they're capable but um any we don't we don't actually know the answer to that but if it does turn out um we'll take we'll make sure we take care of those who are Bard the on home great uh in the last few minutes
• 162:00 - 162:30 that we have left uh we will try to get in some analyst questions uh the first question will be coming from uh Pierre faru at New Street uh Pierre please feel free to unmute yourself um thanks a lot guys for taking my question um I was wondering about like um the compute you're um you're ramping up so you gave like interesting statistics on how much you have and you said you you don't feel your compute constraint and I was wondering you know
• 162:30 - 163:00 how you are putting to work this additional compute is that a game for you of creating like larger and larger models like next generation of models that are larger the way open ai go from gpt3 to GPT 4 or is that more like your set on your model and you need to throw more and more compute to accelerate the paas of learning to to improve uh reliability um and then I had a quick
• 163:00 - 163:30 followup really quick on your roll out in Texas and in the uh in California next year the plan as you see today uh is it to roll out like a fleet or two um with a car that will start with like a supervisory uh uh like some onboard supervision someone uh sitting at the wheel just in case and removing the supervisors progressively or are you aiming for going uh fully fledged
• 163:30 - 164:00 without even a human super supervisor when you get started okay well I guess we're going I'll answer yeah first part of question the the nature of real world AI is different from say LM in that uh you you have a massive amount of context so that like the the you've got case of Tesla 7 or eight cameras uh that uh you know nine after nine if you include the internal camera that um that that so you
• 164:00 - 164:30 got gigabytes of context uh and and that that is then distilled down into a small number of control outputs um you know whereas it's it's like you don't really it's very rare to have in fact not sure any LM out there can do gigabytes of context um and then you've got to you've got to then process that in the car with a a very small amount of compute power um
• 164:30 - 165:00 so um you know it's it's a it's all doable and it's happening um but it is a different problem than than what say a gemini or an open is doing um and uh now part of the way you can make up for the fact that the inference computer is is quite small is by spending a lot of
• 165:00 - 165:30 effort on training um and just like just like a human like the more you train on something the less um the less mental workload it takes when you try when you when you do it like when the first time like a human start driving it absorbs your your whole mind but then as you train more and more on driving get very good then you the driving camera becomes a background task it doesn't it only absorbs a small
• 165:30 - 166:00 amount of your mental capacity because you have a lot of training so we can make up for the fact that the inference computers um it's it's it's tiny compared to you know a 10 kilowatt Bank of gpus um because you got you've got a few hundred Watts um of infer we can make up that with um heavy training um so yeah that's uh and and then there's also vast
• 166:00 - 166:30 amounts the actual you know pedabytes of data coming in are tremendous um and then sorting out what training is important with you know of the vast amounts of video training video data coming in Fleet what is actually most important for training that's quite difficult um but as I said we're we're not currently training compute construct want elaborate yeah like you
• 166:30 - 167:00 mentioned the training has what train larger models also that train quicker um but in the end we still got to pick which models are performing better so the validation effort to picking the models because the milesp intervention is um pretty large we try a lot of milestone going in close loop we do have simulation and other ways to get those metrics those two help but in the end that's a big bottleneck um yeah that's why we not training
• 167:00 - 167:30 computer constraint Alone um and there's other access of scaring as well just data figuring out which data is more useful um that that is an important Tas and we're focusing on that yeah so as it relates to the second part of your question Pier about Safety Drivers and rolling it out each state has different requirements that you know in terms of how many miles and how much time you need to have a safety driver and not have a safety driver we're going to follow all those we're not going to violate whatever regulations are out there but safety is a priority for the
• 167:30 - 168:00 goal is obviously that when we're ready and safety is there we'll we remove all the drive from from the r shair curent yeah I mean I guess like we we think that we'll be able to have driverless Teslas of doing paid rides next year you sometime next year all thank you um and our next question uh comes from Adam Jonas at Morgan Stanley Adam please feel free to unmute
• 168:00 - 168:30 yourself okay thanks everybody um just had a question about the relationship between Tesla and xai many investors are still not clear how the work at xai is is truly beneficial to Tesla some even take the view that the two companies may even be in competition with each other in terms of talent and Tech and even your time Elon so what's your message to investors on that relationship between Tesla and xai and where do you see it going over time
• 168:30 - 169:00 thanks well I should say that you know XI has been helpful to Tesla AI you know quite a few times in terms of you know things like scaling up lot like training um you know just even like recently in last week or so uh improvements in all tolerant training where if you you're doing a big training run and uh and no fails um be able to continue training
• 169:00 - 169:30 and and easy to recover from on training run has been pretty helpful um so um but but there are different problems you know XI is working on artificial general intelligence or artificial super intelligence um Tesla trying to make autonomous cars and autonomous robots um they're different problems so uh yeah I mean I think we've said
• 169:30 - 170:00 this before also like all not all AI is equal right I mean there's AI is a broad spectrum yeah and we have our own swim Lanes yes there are certain things which we can collaborate on if needed but for the most part we're solving different issues Tes Tesla's focus on real world and saying it is quite a bit different from L um you have you have massive context in
• 170:00 - 170:30 form video and and some amount of audio that's got to be distilled like with extremely efficient cence computed I do think Tes is the most efficient u in the world in terms of compute like because out of necessity we have to we have to be very good at in efficient inurance um we can't put 10
• 170:30 - 171:00 10 kilowatts of gpus in a car um we've got a couple 100 watts and it's you know it's pretty well-designed Tesla AI CHP um but it's still a couple 100 ons um but they are different problems I mean this like the stuff that X add is like when it's running in bance I mean it's it is running like like answering questions it's answering test questions
• 171:00 - 171:30 on on a 10 kilowatt rank it's like can't put that in a car it's a different problem please no no exactly um so you know X is because because I felt there wasn't there wasn't a TR seeking digital super intelligence company out there like that's what it came down to they needed to be a truth seeking like like an AI company that is just very rigorous
• 171:30 - 172:00 about um being truthful it's I'm not saying X is perfect but that is but that that that is at least the explicit aspiration even if something is you know Politically Incorrect it should still be truthful um I think this is very important for AI safety so anyway I think XI will has been helpful to Tesla and will continue to be helpful to Tesla but they are very different problems great you know and I mean like
• 172:00 - 172:30 think like like what is like what what other car company has it has a world class trip design te like zero um what other car company has a world class A Team like Tesa does zero those all startups they Creator from scratch great thank you Elon um and I think that's unfortunately all the time that we have for today we appreciate all of your questions and we look forward to getting quarter thank you very much and
• 172:30 - 173:00 [Music] goodbye well well well holy crap that was um I I pulled about 29 nuggets out of that that are all very profound and uh wow what did you guys think that was one of the more exciting
• 173:00 - 173:30 earning calls ever yeah second best in my opinion um because what was the one was it q1 was a complete chit show and then Q2 was a big Improvement is that how it worked or was it Q q1 was good q1 was the bad delivery numbers but we still went up yeah but but that that was that was a record book call so so much in there so much yeah so I captured uh 28 nugget not 29 but just to look at them first of all
• 173:30 - 174:00 um you know that talk about R robot nobody got hurt uh a lot of talk about the 25k car a lot of confusion sub 30k with incentives the robot taxi will be 25k so a lot of people probably got tripped up on that did you guys well so the term robotx is going to be sticky now the like this is a technical term inside of Tesla that applies to all cars so anytime any uh investor or person
• 174:00 - 174:30 outside the company says the robo taxi they're going to get met with weird answers because all the cars are the robo taxi um cyber cab is kind of its own thing Robo van is kind of its own thing so I think people are asking about cyber cab but they use the word robotx scene so they get a weird answer back out on that end yeah the the other cool nugget was the battery discussion how they will be
• 174:30 - 175:00 the most competitive battery company on Earth I thought that was interesting with the 4680 and they're coming out with new versions of batteries the four new models which you didn't get into but that's big I think he did say North America though not earth and I think it was one of the key components that he he's was about with their competitiveness was the IRA credits that they're getting so it's still very good news for sure but it's not like you know a core manufacturing reason why this is GNA be the most efficient battery on Earth so yeah Matt on that one when he
• 175:00 - 175:30 said net of incentives fully landed are you saying that the 4680 are equal to you know they're what they're buying from other competitors but only if you count in the incentives that they're getting from the government I I don't know how else you can you can read it and I believe it's a $49 per kilowatt hour incentive that they're essentially getting so like that's a really big piece of the overall landed cost when you're talking about battery cells um so I think if you were to and he's saying
• 175:30 - 176:00 that even today they're not at that lowest cost yet but they're like close and then importantly he did say with a lot more room to to go after that um so yeah I do think you're they're getting a lot of credit for those incentives which we know which we know offset their cost of good sold which is you know kind of prudent but um in the future where those credits go away that that's going to be kind of hard to make up yeah and that's with primarily imported cathodes still at this point in time they have not fully transitioned over to their in-house dry electrode manufacturing
• 176:00 - 176:30 process for their their in-house cathodes guys real quick I I want to continue going through James list but I know EMT also has to jump in a second here uh EMT can you just like give quickly what your thoughts are overall high level yeah I mean high level I was excited that went on for a long time in the beginning like he seems really pumped and gave a lot of extra detail as like the you know the Preamble or what what have you like the you know introduction to the earnings call more so than I can
• 176:30 - 177:00 remember um I think uh the 4680 news uh is definitely positive uh but in North America he referenced a couple times as Matt was saying I think that's probably inclusive with Ira credits and then they uh what was kind of surprising to me also was is that you know he said after the uh Wei robot event they've noticed a significant uptake in full self-driving take rate so um that extra exposure they maybe demonstrations that they showed uh
• 177:00 - 177:30 helped with the awareness and get people to start signing up more people to start signing up for the full self-driving so maybe they're ready to release some metrics about people signing up for full self- driving soon we'll see but um overall it was a great call I mean a lot of times back and think like do I think it was a great call because the stock kept going up during the call or do I think it was genuinely a great call because of the content and I can't tell the difference on this one to be honest you know like sometimes there's earning calls where I feel like oh was a bad
• 177:30 - 178:00 earnings call just because the stock went down during the earnings call you know the sentiment or whatever but um this one I'm happy this obviously um and the content was great but you know was it like a record of nuggets dropped in this content of this call I'm not so sure but overall I'm very happy with it EMT again before you drop off um you know I guess to push back a little bit on the the Nuggets I mean the fact that they are already doing unsupervised so
• 178:00 - 178:30 so drives in the Bay Area with uh with employees or whatnot I mean what would you take from that because that was something that I think some of us have had expected or predicted what's happening behind the scenes but the confirmation is pretty big well didn't they say they have the employees sitting in the car but or did I misunderstand that is it like the car trying by itself with the employee in the back seat or something it's picking up employees as a cyber cab they have the app working they have the locations they locked up the cyber security it's
• 178:30 - 179:00 live when I heard that I was like holy crap I was not aware of that so that's big to your point though there is a a safety driver yeah yeah there's a safety driver in the front seat right now because that's that is um and Lars made that point it's mandatory per California state regulations and they have not demonstrated enough data yet to be able to remove that driver um but yeah it's operating yeah I mean every day as it is anyway I'm just the safety driver but
• 179:00 - 179:30 I'm letting the car drive me but like when they actually have no one sitting in the front seat like no safety driver and it's in some test phase that be a nice step forward I'm looking for yeah I guess to me it was just more bullish because that is the pre-step before you go to no one behind the driver's seat and so I think everybody up to this point had been anticipating we'd have to do that and then we can get to the no one behind the seat but it seems that that whole timeline shifting left
• 179:30 - 180:00 because they're already testing that out they're already doing that which I think is is a big signal so that's that's how I took it I robotaxi is live and nobody knew about that so it's big even with a safety driver when you consider a lot of the Whos are teleoperated as well anyway any other thoughts on it before you drop no I mean I think uh overall I'm very happy was confused about you know how they commented on the first two question you know it didn't seem to jive
• 180:00 - 180:30 with um what I was interpreting as the uh Outlook product section we went over a preall um so I couldn't quite make sense of it maybe I just wasn't focusing enough all listen to that part again later so I couldn't tell if they're still building a lower cost vehicle that's cab that people can buy or not I couldn't or they're just using the current model 3 Model y infrastructure trying to get cost lower with better incentives maybe the incentive is going to be like buy this model 3 Hardware 4
• 180:30 - 181:00 for you know $15,000 as long as you let us put it in our Robo taxi Network you know when you're not using it for example I don't know it could be something like that um wondering if there's some kind of creative way to lower the cost of the current cars but that's that was my final thought for me I thought it was kind of clear I mean you guys all let me know if I'm wrong but it seemed pretty clear that essentially what we knew before today's what the product road map was where there would be this extra vehicle that's
• 181:00 - 181:30 lower cost built kind of as a hybrid between the unbox and what's going on with the three Andy line is still in play to come out in 2025 that's that was my understanding yeah that was my understanding as well and I think that the the comment that I made earlier em and about confusion around the term Robo taxi I think that um that that was the question where that came up the question specifically called out uh you know the robotaxi with steering wheel and pedals
• 181:30 - 182:00 and that's when because they used the term robotaxi instead of cyber cab that they got a confusing answer correct every Tesla is a robo taxi cyber cab has no pedals or steering wheel yep cuz a weird observation because I've watched all these earnings calls and I always watched the chart at the same time which is up now normally something is said on these earning calls that drives the stock price down in real time that did not happen today which is
• 182:00 - 182:30 very unusual did anybody else pick up on that I I did and I was actually watching because I thought the moment where that he was talking about how it would be hard to maintain the the gross margins in Q4 um I thought that was a moment where the stock would drop but it really didn't um that was the the only kind of surprise for me but yeah I mean normally Elon starts talking about you know whatever he's gonna talk about like a cev type three organization or like planet and all the some the stock drops four bucks but we didn't get any of that this time yeah I I was watching for it
• 182:30 - 183:00 to drop when he said um we don't know about Hardware 3 I was expecting it for it to drop and then as he said that we would retrofit or whatever for free I was going to wait for it to pop up it didn't even move it like it didn't even register well they they caught it because they said it's easier to train on Hardware 4 deploy in Hardware four and then backwards deploy to Hardware 3 which made sense but tied to that was super interesting uh critical interventions 100x Improvement in 12.5 versus the
• 183:00 - 183:30 previous version of the beginning of the year and then version 13 will be a THX better since over January 2024 and they believe it'll beat the average human in q222 I think I have more confidence in my cyber truck FSD in the streets of Los Angeles during Russ hour traffic than I doing my own driving so I think we're already there yeah I agree maybe again yeah EMT but before you drop off like um because cybertruck has a different version of FSD than what I have I think
• 183:30 - 184:00 you're on 55 if I'm not mistaken yeah um are you still having a great experience I know during the wi robot call um you know we were talking about it uh you know Matt and Bradford did that uh test and they had a critical uh intervention I remember that but you were saying that on the cybertruck you're just having such a great experience is that still uh the trend that you're seeing with cybertruck I have a great experience once in the blue moon like instances here and there where it is in the wrong
• 184:00 - 184:30 lane I have to take over to put it in the right lane that's for the Turn Only Lane when I have to make a left or something or you know like conf like these are in like somewhat confusing Lane situations where you know if I was new to the area I might also be confused so it's not you know it's it's it's a hard problem to solve Maybe for completely but it's not a hard stop problem like worst case if it was in the wrong lane then it just goes the wrong way and has to go around the block and then go the right way or something if I if it was like a robo taxi thing but for me in the car I'm going to take over and
• 184:30 - 185:00 put it in the right lane but that that's the only issues I've had with the cybertruck full self driving that I could think of off the top of my head nothing critical comes and James you're you're seeing the same thing with cybertruck 12 yeah so so I tried to figure out that happened to be once or twice over 2 and a half thousand miles with pure FSD driving and i' I think I may have realized why is because it anticipates a risk and it would rather miss the turn than put the car in danger so if somebody's coming up fast from behind and about to cut you off or trying to get into the lane it
• 185:00 - 185:30 doesn't want to risk that so it doesn't mind going around the block or taking the next exit or whatever it's happened to me twice in two and a half thousand miles exactly that scenario and when I look back and tried to figure out exactly why I did I think it sensed danger that I wasn't exactly aware of gotcha yeah see I'm on 125 4.1 and like today for example um there's like this weird train track with like a a like a forklift going by on it near like this place where you pick up gravel and stuff and I'm watching FSD go
• 185:30 - 186:00 and it's just not even stopping at all so I had to take over I'm like man that's the first intervention I've had I don't know how long but like that's that's pretty basic stuff for FSD like FSD never makes that mistake but to me that was safety critical unfortunately but it's it's good to hear what you guys are seeing with five5 which obviously I'm not on the latest build there was one other that came to mind that was a few days ago that I noted actually where it was like turning into some like parking lot in a really super Sunny glare spot like I couldn't
• 186:00 - 186:30 even see I had to like put my hand you know it's one of those spots where even if you're driving it's really hard to see what the sun blaring was it's like soon after the sun rose or something like it's like right in your face so maybe it's messing up the the view of one of the cameras or a couple of the cameras I don't know and it kind of like hesitated and sort of stopped mid turn like not sure if this parking lot but there's like oncoming traffic that you know would have stopped I I would imagine but I just took over and just pushed it ahead to get in the parking lot instead of making the traffic that's
• 186:30 - 187:00 coming the other way stop and wait for me my cyber truck to like figure out should It Go in or not you know so just like you know uncom for sure but it's it's not you know I don't I don't think it would be like a super you know it was in a situation where it wasn't like a highway oncoming it was just like a road with cars coming other way you know and they would have stopped and been like annoyed like why are you stopping there you know there was another very profound
• 187:00 - 187:30 point if you got moment inserted was regarding the 22 degrees of freedom Optimus extremely humanlike the most advanced robot by a long shot we have all the ingredients to scale uh the competition is missing the AI brain and and the ability to scale to high volume production that he said that with such confidence I thought that was quite profound thoughts I mean 100% agree I say I'll say real quick I 100% agree and I think
• 187:30 - 188:00 uh that the The Optimist robot is not priced into the valuation of the stock at all by institutions an exciting opportunity anyway Hans go on yeah that essentially my my point exactly there's no one else who has all of the the components and then you know I think people who are super excited about figure which you know think is an interesting company um the thing that you've got to wrestle with is where's
• 188:00 - 188:30 their cortex like I'm sorry but I don't see the likelihood that the exact same types of training that open AI does which is essentially what they're kind of right now banking on for figure are are going to Port super well to the humanoid form factor for all the different things that they want to solve whereas Tesla has the experience of setting up the entire data flywheel and
• 188:30 - 189:00 the training process using video data to solve real world autonomy for the car and while you know that's just the beginning of solving autonomy for the Optimus robot that video training schema is definitely I think an incredibly huge and important piece for solving the Optimus humanoid robot problem and they're just isn't anyone who has the experience the data or the
• 189:00 - 189:30 training setup to even begin to tackle that problem Ian it's the most important part by like by a country mile I mean I mean you could imagine a scenario where let's say Tesla outsourced manufacturing and design of the bot to a company like figure um but like Tesla had cortex and could you know train at scale like where would most of the margins in a scenario like that ACR to like a company like uh figure that let's just say that they
• 189:30 - 190:00 actually did have the manufacturing expertise to scale up which which they don't like hypothetically or like the the company that can actually use this develop the software to make the work that it's doing actually useful it it seems very clear to me that the hardware is going to be kind of roughly commoditized in in the long run because it'll all be like relatively performant I think Tesla has some stuff that's actually important about like long-term manufacturability and things like that that are you know very very important I don't want to minimize the the importance of them but really having the
• 190:00 - 190:30 brain is by far the more important thing if you're trying to um rapidly train for like like thousands or hundreds of thousands or eventually millions of of different like job types that are out there um having that that data flywheel and that training flywheel is like absolutely critical I I I think everyone I'm hearing talk about Bots like unless they're talking about Tesla they're they're not talking about um about that component of it which is I think exactly to your point H the most important by
• 190:30 - 191:00 far so let's see there's I mean I I also had a number of nuggets um what else did you have James that's yeah not even quarter way to the list uh we should talk about the lrop capacity and Shanghai and then the target of 100 megawatt gwatt hours I think it was you guys catch all those numbers they're pretty impressive I was
• 191:00 - 191:30 pinging Matt and in the comments here during it that my trillion dollar valuation Alex stupid based on those numbers so yeah I mean he talked about 100 gwatt hours uh in 2025 and eventually terawatt hours worth of scale on the mega pack so yeah what uh what are the implications there Matt yeah so I was just going through because I I didn't see your your comments come through so I'm actually kind of looking back up at those now but
• 191:30 - 192:00 um yeah I mean this is something that they've been talking about for a long time I mean like terawatt hour scale this is what they were talking about at battery day and and I think given that fact that you know energy has like hoed along for so long we we kind of lose um track of of the the fact that that was the original ambition and the uh actual um demand seems to be strengthening if anything to make those numbers look even more realistic so I mean we're finally at the point now where the you know the
• 192:00 - 192:30 LR ramping is starting to make itself felt in in the financial deployments um going from which which is a 40 gwatt hour Factory so go getting Shanghai up to 40 gigawatt hours I mean that has pretty wild implications I mean because if if you're just getting to 10 gwatt hours per quarter at these Market margin that's roughly a billion dollars of gross margin contribution per quarter so if you've got two plants doing that same thing then you're talking about you know $2 per quarter or uh two billion per quarter um you know and then you're like
• 192:30 - 193:00 at a at a oh gosh what's the the math on that it's like a buck 50ish in earnings per share contribution which should be up and running like by mid to late next year let's say kind of contributing those types of of numbers um and then meanwhile continuing to grow and ramp beyond that um and then if you you think about the like how realistic is it to get to a tera hour I think it's actually extremely realistic I think you do need to assume that asps come down um in order to kind of facilitate that level of growth because you know these battery projects are not like absolute money
• 193:00 - 193:30 printers across the board you know I was actually just doing some modeling for an energy project very recently and it's like we need more battery storage but it's not like it's just an absolute money printer overnight so I think it's the prices do need to come down but still I mean talking about $2 is of earnings per share contribution in the next couple years is absolutely massive when we're I think expectations for Tesla this year we something like $3.50 total so I mean if you can do more than half that on the energy side alone
• 193:30 - 194:00 that's that's a really big deal um and and I do think that the the sky is pretty much the limit on that side of the business I mean it's it's entire entirely feasible to have you know $10 in earnings per share and in the not too distant future and do you have a view on the uh you know if we're bringing 60 gwatt hours worth of capacity online in 2025 do you think that part of that's in Fremont part of that's in China is that all Shanghai is that Shanghai plus a third
• 194:00 - 194:30 location um yeah what's your view on that well so we know Shanghai is going to be 40 right but I think we all kind of think that they're um the initial capacity of the the vehicles was only 4 000 too and uh they were well in excess of that with the actual production before they finally updated they like oh yeah by the way it's you know going to be like 900,000 or whatever it was yeah so you know L up
• 194:30 - 195:00 maybe maybe I I think 40 is probably reasonable I've been there it's actually a pretty small site so I don't think they you know could get to like 50 or something more substantial than that um without um just in in that facility footprint because it is so small um but I think a lot of people forget that um they were actually talking about building 4680 lines at gig Nevada and actually making Mega packs there this is something Elon said he kind of like dropped it nonchalantly at his uh talk there maybe it was two years ago or so that're they're going to be making 4680
• 195:00 - 195:30 for stationary storage at Giga Nevada and using those four Mega packs um so you know wouldn't surprise me if we get I think that was with the 100 gwatt hour total expansion but most of that going to Auto at gig Nevada so maybe you get you know 20 gwatt hours or so going to stationary storage out of out of that kind of cell Supply so that to me that seems like a reasonable outcome so maybe you've got you know 40 in l r you know 10 or 20 in Gig Nevada and then 50 60 maybe even 80 in Shanghai and you know
• 195:30 - 196:00 by 2026 or so kind of getting to those those levels to me that seems like a very reasonable kind of outcome and they've already announced all those things yeah and especially with the you know kind of demand pocket for batteries in the you know given the lack of growth in EVS that we're seeing like there's kind of a glut of availability of batteries so it seems like scaling storage rapidly while prices for batteries are
• 196:00 - 196:30 this low uh makes a lot of sense yeah yeah definitely I mean we know the energy side of the business is definitely benefiting from actually I mean all the business is benefiting from U the cell Supply glut that that we've seen and seems like that's leveling out a little bit from what I'm hearing kind of listening to the lithium earnings calls and that sort of thing but um I think the overall trend is is still for continued manufacturing improvements and ways to get the cost down especially on the 4680 side but um yeah I think the
• 196:30 - 197:00 the trend we'll see is is that the delivered cost of Mega packs continues to come down a little bit I mean they already made massive strides they were going from like $450 per kilowatt hour down to around 260 I think they are right now absolutely massive Improvement in just like couple of years and so that's done I think a lot for uh increasing demand then also wanted to call out from earlier in the call he said at least 2
• 197:00 - 197:30 million units per year of cyber cab they're going to start ramping uh production of cyber cab to volume in 2026 not just beginning production in 2026 and they said ultimately potentially as much as 4 million units per year on the Cyber cab um I that's the first that I think we've heard actual numbers around that specific
• 197:30 - 198:00 product so it is but I think I was also wondering what how does that compare to their um battery day where they were talking about 20 million Vehicles by 2030 because I thought at that point they when they were talking about like a robotx vehicle I thought they were talking about I don't know six to8 million units per year or something something like that um I think the the 20 million number has been scaled way back in everyone's mind so maybe that's just a a kind of prad reduction in in
• 198:00 - 198:30 kind of aspirations but you I I think if they if they do achieve the numbers that they're talking about to me it would make sense that you you'd go for more than two million but I don't know maybe you don't try to promise too much right now maybe El's finally under promising because I do think there'd be way more demand than than just 2 million per year well I think the smaller model with you know steering wheel and pedals will definitely also be a high volume product that will well exceed the and that was
• 198:30 - 199:00 another you know another thing that he mentioned there before the the Cyber cab was only 20 to 30% vehicle delivery growth in 2025 um so I guess what that puts us somewhere around 2 5 million produced roughly Target in 2025 um but that's probably exiting the year with a run rate of somewhere around that
• 199:00 - 199:30 3 million units on an annualized basis yeah he did say a couple of things regarding cyber cab production up to 2 million units per year in 206 this talks about like very fast ramp that was kind of interesting to me he also said with a potential to reach 4 million units globally across multiple factories did you guys prize that apart yeah well and we'll have to see if
• 199:30 - 200:00 the you know we we heard Elon talk in the past about a Shanghai designed version and a Berlin design version for the different regions so is that factored into that vehicle or are those vehicles different that'll be an interesting thing to hear but yeah I noticed that and the other thing that I heard him say was um you know roughly a half order of magnitude better cycle time for these vehicles than a
• 200:00 - 200:30 traditional Auto Factory so a traditional Auto Factory would be you know somewhere around 60c cycle time um I think that's pretty standard-ish so if you divide that by five you get to 12 seconds uh I think that Shanghai is currently some where in the range of just under 30 seconds uh to crank out a vehicle on an existing line so that's still like two and a half times better than Shanghai which is already
• 200:30 - 201:00 incredible um and that has huge implications for the the size you know the the amount of capex that goes into building out a factory um and and their ability to reach those higher scale um delivery numbers off of relatively small
• 201:00 - 201:30 lines the other thing was uh super interesting to me was the FSD adoption rate we touched on briefly but the halo effect of 1010 was a huge Catalyst for that adoption which I did not expect yeah I thought that was one of the most surprising uh comments in the whole call actually um because I mean before the call we were trying to kind of piece together the different bits um one of the things that I I noted was they actually disclosed the Deferred FSD
• 201:30 - 202:00 Revenue that was recognized on the call I it was around 350 million or so which was a bit higher than than I've been projecting I think I was around 200 million of recognition of deferred but then when you kind of count in the uh FSD on new Sales Plus the FSD subscriptions for the the subscribers you know that that in my according to my estimates is like another 250 million-ish or so so they might be in the kind of half billion dollars like $500 million do of pure margin kind of FSD Revenue right now and if their take
• 202:00 - 202:30 rates actually increasing and like it's always seemed very logical to me that as the software improves all else being equal take rate should improve right yeah if you maintain cost you know being the same and actually done the opposite we've actually been decreasing the cost and improving the the functionality so you something's got to give it at some point yeah so like it seems like it's never been quite material enough where they they've started disclosing it but I I think if you're getting again to like
• 202:30 - 203:00 this $500 million per quarter kind of rate that starts to become really material and it's the sort of thing that I think a lot of analysts aren't actually modeling this out separately and I think it's extremely important to to do so and I've been kind of ping the table on this for years because I mean let's just say that the next like version 13 is amazing and a bunch of people get the new trial and you go from you know 1% of the fleet subscribing to 3% of the fleet subscribing like that's an absolutely massive kind of change
• 203:00 - 203:30 overnight and so I think I think of like the fleet is this like potential energy of all this earnings potential that could come there um and and I think it will flip at some point um but and I suspect we're kind of getting there because if we're seeing results this good for Q3 and then the 1010 event which was after these results went live we was seeing like a pretty noticeable inflection point then then that kind of implies Q4 numbers are going to be even better um although offset a little bit by the fact that you're not going to have as much cyber truck deferred FSD Revenue recognition and I did enjoy hearing that
• 203:30 - 204:00 they're going to continue providing those free one-month trials at points along the journey as they improve the functionality so people who tried it before and they're like ah you know I like it it's good but it's not quite there yet you know you start to win over more more and more of those people and and that's you know one of the great things about FSD which it does surprise me that the 1010 event actually made a significant difference because you know Tesla has the ability to essentially sell the software package to every
• 204:00 - 204:30 driver in every car via the screen like the the distribution mechanism is built in and um yeah I this is something that is going to be extremely material over time and uh if they have the ability to operate a whmo like Fleet with a driver in the seat but who's just a safety driver it should be to the point where it's extremely useful to people at at at
• 204:30 - 205:00 least some level I mean whether it's $50 a month subscriptions or 75 or 100 you know as the functionality continues to improve you get to the point where lots more people think yeah that's actually totally worth it and I know we've already said this but I think it just like reallys like stopping if this is actually safer than humans in Q2 of next year what what like what does that er's call look like I mean what is the the take rate for FSD look like in
• 205:00 - 205:30 in Q3 I mean I I do think that we're at this point where this like we're looking backwards at this you know linear progression of FSD as we've lived it and it's been like very slow like they're seeing that with the data like clearer than ever a very tangible line of sight to be safer than humans in the next six months um and that's absolutely wild and I I think investors should really
• 205:30 - 206:00 consider that I don't want to give them full credit for that today but um I mean I think James the kind of uh price targets that you were talking about are are very realistic if we we see this progression that they're talking about yeah and it's not just that it's just the you know the competition is recoiling there is no competition we're seeing s-curves explode you know Iceland Sweden Denmark Norway China the rest of the world is just playing catchup and
• 206:00 - 206:30 again goes back to our first conversation you know dumb car versus smart car what are people going to buy it'll become a no-brainer and just wait just wait till Texas launches robot taxis people will start stacking Teslas secondhand Teslas will not be available in the market is my forecast everybody's just going to snap them up you're going to see a $30,000 2-year-old Tesla with 25,000 miles stackers will buy them and hoard them and that's that's the future it's going to be very interesting next
• 206:30 - 207:00 year 20125 is going to be wild 2026 launching Optimus hopefully onto the market Wilder and then what happens when Wall Street wakes up you know they they they're going to have to get some new spreadsheets and some new pencils yeah it definitely feels to me like the period that Nvidia was experiencing you know back in 2022 where Jensen was out there pounding the table on what the
• 207:00 - 207:30 future was going to look like what demand was going to look like people didn't believe him you know a few things went the wrong way and their value took a nose dive for a period of time but they were just laying the groundwork quarter after quarter for massive profitability and I feel like that's where we are today you know I don't know if we'll see that in the next two three quarters but I I think that if you can
• 207:30 - 208:00 zoom out and look at a 12 to 24 month time frame the likelihood that the software contribution to Tesla's overall profitability takes a massive tick upwards is super high in in my view and even higher now than you know I think at the beginning of this call like the number of things that we had confirmed that really point in that direction are just uh you know basically
• 208:00 - 208:30 undeniable Bonkers well there let me see do I have any other mini nuggets we may have missed oh yeah the Tesla semi uh basically they said the demand is off the hook any driver demands they wanted bad the vehicle it's a pleasure to drive it's safe it's comfortable and it's much easier to drive too so they said the semi is is a commodity of total cost of ownership with ridiculous demand which
• 208:30 - 209:00 has been proven by the DHL and Pepsi use case so the question is how fast can they scale that I think I was a little bit disappointed that they won't start really ramping the Sparks of area location until second half of next year did you guys see that too yeah I did but they said pilot builds in the second half of 2025 and then actually working on scale production in 2026 yeah but the fact that Europe wants to get
• 209:00 - 209:30 their hands on it too again just like Mega packs unlimited demand that's super interesting I think that's it from my side crazy cool poor Roadster people though still uh being left out to dry the cherry on top of the icing on top of the cake which which is dead right the focus is sustainability so I hope B understood that yep yeah but definitely no solid timelines he said oh we're we're almost done finalizing the design
• 209:30 - 210:00 it's like okay we have no concrete timelines but that is okay you know I I think the thing about the Roadster is it it exists to make the semi- program look fast this is true yeah and Peter Peter the comment regarding the flying car they keep hinting at that well he already has one that's the you know there's already a roadster flying in space so
• 210:00 - 210:30 true I guess orbiting technically but uh yeah you know the the um that first call too where he he was or the first question where he was just talking about the you know the fact that like all these are going to be um Robo taxis and that's really the focus I think that really is the fundamental takeaway and the thing that everyone should be focusing on yes like semi matters energy ramp is super
• 210:30 - 211:00 exciting but I mean like the real meat and potatoes is is what's going on with autonomy and it's I I really love the way that he framed it by comparing to like the data rate that that weo has and that kind of feedback loop it's something we all know being the Nerds that that we are but I just I feel like you need to keep like pounding the the table on on that for for Wall Street to get it but I don't I suspect they won't until we start actually getting to the point where like there's a consensus of
• 211:00 - 211:30 everyone that like I just don't intervene anymore and I don't think we're there I don't think we're really even close to there yet at least from a how many orders of magnitude do we need to get to um maybe em it is in in his Hardware 4 cyber truck um in in his particular location but I mean yeah we're still seeing issues all the time on both Hardware 4 and three vehicles right now I did yeah I just want to come back to that point actually about their you know hok's comments on developing
• 211:30 - 212:00 you know the bleeding edge of development for FSD is going to move to Hardware 4 or ai4 and that makes a ton of sense but that they can then backport that software to Hardware 3 and I think for the foreseeable fure future that back porting is totally feasible and it's going to happen I think the further and further down the line we get the longer it will take to do uh the work to make that stuff backwards compatible to Hardware 3 but this is 100% in line with
• 212:00 - 212:30 the expectations that I've had for what this would look like and then you know you can if you think about how much capex is involved in doing that free upgrade to an FSD you know like a a hybrid an AI three board with a ai4 chip on it in millions of vehicles like that's really expensive it totally makes sense it's
• 212:30 - 213:00 absolutely feasible to do but think about how much money you can spend optimizing the software to just make the software work on Hardware 3 before you're willing to spool up an entire chip line to make these millions of chips can actually install these weird retrofit computers cuz the ai4 computers are not directly compatible like that's not a an easy swap that you can do and
• 213:00 - 213:30 uh so they're going to have to if they have to upgrade those computers that's a custom upgrade that they're going to have to design and produce at scale and then you know do these installs on and so that's you know a pretty significant amount of and so that makes it like if that's what you're looking at having to do well yeah it makes sense to spend quite a bit of engineering effort to actually just make the software work on the existing Hardware 3 platform if
• 213:30 - 214:00 that's possible and elon's right it may not be possible we don't know I think um the my reading of the tea leaves is that that's more like like it's probably a 60 to 70% chance that Hardware 3 will still be able to achieve better than human safety rating and that those Hardware upgrades won't actually be necessary um but you know if it is then Tesla will solve it they'll build those chips they'll put them in the cars and because you know when you're looking at that car
• 214:00 - 214:30 could earn hundreds of thousands of dollars over the course of its lifetime its useful Lifetime and it's going to cost you on average you know maybe $3,000 to put that new computer in the car well of course you're going to do that so this is the most obvious outcome I think that could possibly have uh been revealed it's just nice to hear it officially said by Elon and AOK and Tesla because you know there's so much
• 214:30 - 215:00 fud around this that people invent a lot of very unlikely hypothetical scenarios that they think is going to happen that were totally not going to happen yeah I I did think that was a great answer um both as a customer and as an investor you know like we think it'll work we're going to you know try to squeeze as much juice out of Hardware 3 if possible but frankly just we can't know the answer to that so I love the the honesty um but if if not then here's what we'll do and and I do think you
• 215:00 - 215:30 know they wouldn't need to retrofit for everyone I think they would only need to retrofit for those who purchased FSD or wanted to contribute their Hardware 3 vehicle to the robot taxi Network right which will probably be a lot yeah so probably would be but I think Tesla probably wouldn't be on the hook to to do that unless you actually op to buy FSD so then if you let's say you're one of the these you you know like a 2021 model y or something like that that didn't buy FSD and all of a sudden you say oh shoot this is this makes sense to
• 215:30 - 216:00 me I'll buy FSD now for $88,000 maybe in the future it's a little bit more than that well I'm sure that $8,000 would more than cover Tesla's cost for the install so it would still make economic sense for them at that point absolutely yeah I totally agree so all right other nuggets did we miss anything else no actually I just finished writing a substack it's going to go out right now that has everything summarized so while I'm talking I'm multitasking that's magic yeah so it was
• 216:00 - 216:30 a great show I want to thank you both thank you Hans great meeting you as well Matt really appreciate all the insight and EMT as well and Nico I think it was a very good good match and let's keep the good juju going and hope everybody like we we've had 22 months to stack this puppy and it's I I still pinch myself every day my dream would be for it to stay at 200 bucks for the next year and then rotate crypto into it but yeah that
• 216:30 - 217:00 may not happen looks like the barn has left the stable or the the horse has left the stable I'm TI y yeah anyway thank you all appreciate you guys and I hope to see you soon yeah have a great evening cheers see do you press the stop buttton