Elon’s OverviewTesla has started work on building a new facility in Texas for Cybertruck/Semi productionTesla Solar is now the lowest-cost solar roof in the United States, with a lowest-price guarantee ($1.49/watt with a tax credit)Tesla introduced the first production car with more than 400 miles of electric range (Model S now has a 402-mile EPA range, even at highway speeds)Full Self-Driving: support for traffic lights and stop signs released, testing software for interactions and city streets — software is “profoundlybetter than people expect,” Elon gets to work with almost no interventions even with construction and other obstaclesProfitable quarter overallNext 12-18 months: three new factories, Cybertruck, Semi, Roadster, Full Self-Driving“Hardcore engineering” on autonomy and manufacturing
Financials4th consecutive quarter of profitabilityCost-saving on COG’s and operating systemAutomotive gross margin reduced from 22% to 18.7% due to shutdownsQ2 savings passed on to customers2020 credit revenue roughly double that of 2019Production-constrained in energy businessCash flow increased to highest level of $8.6 billion
Questions from investorsCompact vehicle of some kind as well as a higher capacity vehicle on the roadmap, with a “long way to go for Model 3 and Y as well as Cybertruck”Asset increase of Full Self-Driving to be the most valuable for Tesla, add 5x utilityMore productivity and entertainment apps will be added in the futureFull Self-Driving worth “at least $100,000 per car” per ElonTraffic lights, stops, turns coming to FSD later this year“The smartest people don’t realize AI can be much smarter than them”10,000% more engineering required for the factory than the product itselfTesla is focused on manufacturing, and designing unique production lines
“Far more opportunity for innovation in manufacturing than the product itself”
Additional questions from onlineLong-term Tesla Energy will be roughly the same size as Tesla AutomotiveSustainable vision: solar and powered by windMission of Tesla is to accelerate sustainable energyReal limitation on Tesla growth is cell production at an affordable price, to be discussed in detail on Battery DayExpanding battery business with LG, Panasonic, possibly othersTesla Semi production to include a lot of tech Tesla engineers have been dreaming ofRange of almost 300 miles with an iron phosphate pack on Tesla Semi“Please mine more nickel” – Elon’s plea to battery companiesNew standard for EPA range on electric vehicles will be 300 milesWorking super hard on insurance, think of the current version as 0.9Tesla Insurance will ultimately use data from individual vehicles (with the permission of customers) to assess premiumsTesla Insurance coverage will be provided for vehicles in the ride-hailing network
Analyst questionsModel Y was profitable last quarter, slightly more expensive than Model 3 to produceSourcing supplies/parts locally lowers costs at international factoriesThe business isn’t managed with the expectation that regulatory credits will continueContinued decline in the cost of producing vehiclesPossible to go way beyond industry margins while still having the cars be affordable to more and more people (almost everyone with autonomy)Important to make the cars affordable, “what bugs me most is our cars are not affordable enough”Okay if profitability is 1-2%, the goal is to make Tesla’s cars as affordable as possibleDemand “definitely” not a problemBattery Day likely to take place within the next three months
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