All Tesla vehicles shipping today include full self-driving hardware, with the potential to make an estimated $30,000 per year on the company’s upcoming ride-hailing taxi network.Only company producing their own cars, batteries, and full self-driving hardware which will result in the most profitable autonomous taxi on the market. Large number of overseas deliveries were moved to Q2 due to logistical issues.Tesla believes it will have the top-selling pre-owned cars in the world. (Only Used Tesla is the premier source for buying and selling used Tesla’s, and we expect to expand to meet global demand.) Customers willing to pay more to get a Model 3 than any other car, with global sales just beginning. Model S and X have a “significantly more advanced powertrain” with an improved suspension and charge rate, as well as other minor improvements and a significant increase in range that didn’t necessitate making changes to the battery pack. New loyalty program: all current Tesla owners who order a Model S or X Performance model will receive a free $20,000 Ludicrous upgrade.
Semi, Model Y, Roadster, Powerpack, and Solar Roof version 3 coming soon.Quarter-ending cash balance expected to increase at this point, was negatively impacted by Tesla paying off a $920 convertible bond.
Model 3 gross margin decreased slightly to 20% following price adjustments and Standard Range variants, which has been offset by improvements in labor cost.April will have largest amount of deliveries in the first month of a quarter for the company.Battery storage growth rate will become a significant source of Tesla’s revenue over time.“Much more cost efficient” solar product that Tesla will detail next week.New insurance program offered by Tesla which will be “much more compelling than anything else out there.”Semi prototypes “working very well,” and have been used to deliver some Model 3’s.Current owners will get the FSD computer in about 2-3 months when features are ready that require it.Model Y vehicle production will be in either California (Fremont) or Nevada (Gigafactory), with all tooling that’s required already ordered and no delays expected.“Strong demand” for all three vehicles, with Standard Range Plus being an “incredibly compelling vehicle” that’s “affordable to the top 40% of income-earners in the U.S. and Europe.”Right hand drive Model 3 being released this year.Demand expected to “return to normal” in Q2.Only 3.5% of Model 3 trade-ins come from Model S, indicating customers are keeping their Model S or trading it for a Model X. Or, Model S owners are selling their vehicles privately and receiving top value.“Over 50% of orders are for Long Range variants,” with a $50k average sale price for Model 3.$500 million in debt capital raised for upcoming Shanghai Gigafactory.Instead of building cars in batches to deliver to various markets, Tesla will balance the vehicle deliveries throughout the quarter to ensure quicker delivery.Tesla will continue to maintain and add stores in high-traffic areas for prospective customers to take test drives and buy merchandise while encouraging sales to be completed online.No comment on future price changes. (We do anticipate to see price adjustments when the tax credit is cut in half again on June 1st.)
Cost reduction programs in place.Full self-driving option becoming more popular over time.Upgraded S/X powertrain significantly reduces cost.Goal is to make cars as affordable as possible, with the $35,000 Model 3 to remain in the lineup off-menu for the foreseeable future.
Other key takeaways from the earnings report:$702 million loss for Q1 2019, with $2.2 billion in cash reserves.Model 3 remains the top-selling premium car in the U.S., with 69% of trade-ins coming from non-premium cars indicating a broader consumer response.Tesla will be able to produce a “robotaxi” that can travel a million miles on a single battery pack for under $38,000. (All Tesla’s are built to last a million miles; however, battery packs currently do need to be replaced after 300k-500k miles.)Model S and X are built to order, while Model 3 is produced in batches then matched to orders.360,000-400,000 vehicle deliveries expected this year, with a targeted gross margin of 25% on all vehicles.
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