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Corporate Earnings Call Transcript
| # | Score | Sentiment | Text |
|---|---|---|---|
| 1 | 0 | Neutral | Thank you, VP of Investor Relations |
| 2 | 0 | Neutral | And I'm joined today by Elon Musk, Zachary Kirkhorn, and a number of other executives |
| 3 | 0 | Neutral | Our Q One |
| 4 | 0 | Neutral | Results were announced at about 03:00 PM |
| 5 | 0 | Neutral | Central Time |
| 6 | 0 | Neutral | In the Update deck, we published at the same link as this webcast. |
| 7 | 0 | Neutral | During this call, we will discuss our business outlook and make forwardlooking statements |
| 8 | 0 | Neutral | These comments are based on our predictions and expectations as of today |
| 9 | 0 | Neutral | 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 SEC |
| 10 | 0 | Neutral | During the question and answer portion of today's call, please limit yourself to one question and one follow up |
| 11 | 0 | Neutral | Please use the Raise End button to join the question queue |
| 12 | 0 | Neutral | But before we jump into Q and A, Elon has some opening remarks |
| 13 | 0 | Neutral | Elon? Thank you, Martin |
| 14 | +2 | Strong Positive | So just a Q One recap model Y became the best selling vehicle of any kind in Europe and the best selling non pickup vehicle in the United States |
| 15 | -1 | Negative | And this is in spite of a lot of challenges in production and delivery |
| 16 | +2 | Strong Positive | So it's a huge credit to the Tesla team for achieving these great results |
| 17 | 0 | Neutral | It is worth pointing out that the current macro environment remains uncertain |
| 18 | 0 | Neutral | I don't think I'm telling anyone anything people don't already know, especially with large purchases such as cars |
| 19 | +1 | Positive | And while we reduced prices considerably in early Q One, it's worth noting that our operating margin remains among the best in the industry |
| 20 | +1 | Positive | We've taken a view that pushing for higher volumes and a larger fleet is the right choice here, versus a lower volume and higher margin |
| 21 | +2 | Strong Positive | However, we expect our vehicles over time, will be able to generate significant profit through autonomy |
| 22 | +1 | Positive | So we do believe we're like laying the groundwork here, and then it's better to ship a large number of cars at a lower margin and subsequently harvest that margin in the future as we perfect autonomy |
| 23 | +2 | Strong Positive | This is an extremely important point |
| 24 | 0 | Neutral | Let's see, regarding the Cyber truck, we continue to build alpha versions of the Cybertruck on our pilot line for testing purposes |
| 25 | +1 | Positive | It's a great product, and we're completing the installation of the volume production line at Giga, Texas |
| 26 | 0 | Neutral | And we're anticipating having a delivery event, a great delivery event, probably in Q Three |
| 27 | +1 | Positive | As with all new products, it'll follow an S curve, so production starts out slow and then accelerates |
| 28 | 0 | Neutral | So the Cyber truck is no different |
| 29 | +1 | Positive | There's tremendous amount of demand for the product |
| 30 | 0 | Neutral | Obviously, it is, my view, a fantastic product, a hall of famer |
| 31 | 0 | Neutral | But as with all new products, it takes time to get the manufacturing line going |
| 32 | 0 | Neutral | And this is really a very radical product |
| 33 | -1 | Negative | It's not made in the way that other cars are made |
| 34 | 0 | Neutral | So let's see |
| 35 | +1 | Positive | With regard to megapac, we're making great progress |
| 36 | +2 | Strong Positive | Our energy storage deployment reached nearly four gigawatt hours in Q One |
| 37 | +2 | Strong Positive | This is by far the strongest quarter ever, and this growth was achieved thanks to the ongoing ramp at our mega factory in Lathrop, California |
| 38 | 0 | Neutral | There's still some way to go to reach the photo run rate of 40 gigawatt hours per year |
| 39 | +1 | Positive | And then we additionally announced the start of a new megafactory in Shanghai |
| 40 | +2 | Strong Positive | As we've expected, the stationary storage growth actually will significantly exceed the vehicle growth |
| 41 | +2 | Strong Positive | Regarding autopilot and full self driving, we've now crossed over 150,000,000 miles driven by full self driving beta, and this number is growing exponentially |
| 42 | +2 | Strong Positive | This is a data advantage that really no one else has |
| 43 | 0 | Neutral | Those who understand AI will understand the importance of data, of training data, and how fundamental that is to achieving an incredible outcome |
| 44 | 0 | Neutral | We're also very focused on improving our neural net training capabilities, as is one of the main limiting factors of achieving pool autonomy |
| 45 | 0 | Neutral | So we're continuing to simultaneously make significant purchases of Nvidia GPUs and also putting a lot of effort into Dojo, which we believe has the potential for an order of magnitude improvement in the cost of training |
| 46 | 0 | Neutral | And Dojo also has the potential to become a sellable service that we would offer to other companies in the same way that Amazon Web Services offers more web services, even though it started out as a bookstore |
| 47 | +2 | Strong Positive | So I really think that the Dojo potential is very significant |
| 48 | +1 | Positive | In conclusion, we're taking a view that we want to keep making and selling as many cars as we can |
| 49 | 0 | Neutral | Despite this being an uncertain macro environment |
| 50 | +1 | Positive | This is a good time to increase our lead further, and we'll continue to invest in growth as fast as possible |
| 51 | 0 | Neutral | Once again, I'd like to give a huge thanks to Altez employees worldwide for doing an incredible job again |
| 52 | 0 | Neutral | And yeah, super appreciated |
| 53 | 0 | Neutral | Thank you very much |
| 54 | 0 | Neutral | And Zach has some remarks as well |
| 55 | 0 | Neutral | Yeah |
| 56 | 0 | Neutral | Thanks, Martin |
| 57 | +1 | Positive | I want to start by congratulating the Tesla team for record vehicle production and deliveries, and I also want to congratulate our energy storage team for record volumes as well |
| 58 | 0 | Neutral | There's three main points I want to make |
| 59 | +1 | Positive | First, automotive gross margin and operating margin reduced sequentially, but as Elon mentioned, these remain at healthy levels |
| 60 | 0 | Neutral | In particular, automotive gross margin was impacted by a few factors since our discussion on the last earnings call, which include additional action taken in the second half of the quarter to improve vehicle pricing and Onetime items, most notably, warranty adjustments on older SNX vehicles, as well as increased deferred revenue for certain autopilot features |
| 61 | 0 | Neutral | As we transition technologies, progress on vehicle cost reduction continued in Q One, with meaningful improvements on logistics and the beginnings of some commodity cost reductions starting to be realized per unit costs for Austin and Berlin improved as well, driven by record volumes |
| 62 | -1 | Negative | However, these factories still provide a margin headwind and will likely continue to do so until after we reach and stabilize at our intended volumes |
| 63 | 0 | Neutral | Note that Q One was our third quarter in our multi quarter plan to move to a more regionally balanced mix of build and deliveries |
| 64 | 0 | Neutral | As I've mentioned previously, this results in lower deliveries and production within a quarter due to a higher volume of cars in transit at the end of the quarter, and has an associated impact on quarter ending free cash flows |
| 65 | 0 | Neutral | This was particularly prevalent in Q One for S and X as we begin exporting cars for international deliveries |
| 66 | +1 | Positive | Second, our storage business is starting to take shape, and this is exciting to see after many years of investment and focus |
| 67 | +2 | Strong Positive | This business is growing as a percentage of the businesses of the company's revenue and reached its highest level yet in Q One, driven by an increasing rate of deliveries for our Megapack products |
| 68 | +2 | Strong Positive | We are also making progress on storage profitability, generating our highest gross profit yet in the quarter |
| 69 | 0 | Neutral | Third, I want to reiterate the philosophy by which we are operating the business this year |
| 70 | +1 | Positive | Our approach is to grow volumes as quickly as possible in both our vehicle and energy businesses |
| 71 | +1 | Positive | We plan to continue to invest heavily into our future plans, which include the Cyber truck next generation platform inhouse self production energy storage business, and our Autonomy and AI enabled products |
| 72 | +1 | Positive | And we plan to do this while keeping the business financially healthy and industry leading |
| 73 | +1 | Positive | To accomplish this, we need to remain focused on cost efficiency and working capital, and in particular, unwinding the strategic inventory buildup left over from the Pandemic |
| 74 | 0 | Neutral | I want to conclude by thanking the Tesla team again, as well as thanking our suppliers and our customers |
| 75 | 0 | Neutral | Thank you very much |
| 76 | 0 | Neutral | And let's go to investor questions on, Say |
| 77 | 0 | Neutral | The first one is, what is the process to make Auto pricing adjustments? What variables do you consider? How frequently do you review pricing? Do you want to take that Elon, or do you want me to take it? My apologies |
| 78 | 0 | Neutral | Sorry, I was on mute |
| 79 | 0 | Neutral | Yeah, I think this is not something that we can really talk about |
| 80 | 0 | Neutral | It's just we do our best to evaluate the production, output, macroeconomic conditions, and we make a decision |
| 81 | 0 | Neutral | Unless it's something you'd like to add, Zach? I think that's right |
| 82 | 0 | Neutral | I mean, as a team, we review where we stand globally on a weekly basis and certainly can't get into the details of the reasons why certain decisions are made |
| 83 | 0 | Neutral | But it is something that's very actively managed by a subset of the leadership team |
| 84 | 0 | Neutral | Thank you |
| 85 | 0 | Neutral | The second question is, do you still believe Tesla Energy will be bigger than Auto, and when will you provide more formal guidance on Megapac and overall Tesla energy? Yeah, I should just clarify bigger than Auto from the standpoint of total gigawatt hours deployed |
| 86 | 0 | Neutral | So it's possible automotive revenue may be higher, but gigawatt hours, I think, will be probably higher with stationary storage |
| 87 | 0 | Neutral | If you just look at what's needed to transition the world to a sustainable energy economy, there is more stationary energy storage needed than there is mobile energy storage |
| 88 | +2 | Strong Positive | And we are seeing growth of our stationary storage well in excess of automotive |
| 89 | +1 | Positive | So that is in line with expectations |
| 90 | 0 | Neutral | Yeah |
| 91 | 0 | Neutral | And on the guidance part of the question, and maybe, Martin, we can combine this with the next question, which is on guidance for margins |
| 92 | 0 | Neutral | Just have a single comment there |
| 93 | +1 | Positive | I think we will get to the point where we as a company provide guidance on the storage business |
| 94 | 0 | Neutral | I say storage is a combination of both the megapac business and the powerwall business |
| 95 | 0 | Neutral | Relative to total revenues of the company, it's still fairly small |
| 96 | -1 | Negative | And the business has a lot of volatility currently, both in terms of volumes as well as financials, just given the small volumes and kind of diversification of the customer pool there |
| 97 | +1 | Positive | But as this business grows and smooths out, I don't think we're that far away from it |
| 98 | 0 | Neutral | I think including these volumes on our day two production and deliveries release is something that we'll start doing and then we can talk more formally as a business about our expectations over the coming year |
| 99 | 0 | Neutral | I think it'll be a few more quarters before we get there |
| 100 | 0 | Neutral | Thank you |
| 101 | 0 | Neutral | The next question, as you said, was already answered |
| 102 | 0 | Neutral | So let's go to the battery question |
| 103 | 0 | Neutral | Just one other thing I wanted to mention on margin |
| 104 | +2 | Strong Positive | While we're not providing specific guidance there just to set expectations of where we think this business will go in terms of margins, probably generally in the ballpark of what we've seen historically on the vehicle business, we generally look to mid 20% gross margins for any program that we launch |
| 105 | 0 | Neutral | And so we're we're not there yet on this business, but that's what we're working towards |
| 106 | 0 | Neutral | We're hopeful to get there later this year, but that's not a promise, that's an aspiration |
| 107 | 0 | Neutral | Thank you |
| 108 | 0 | Neutral | The next question is how well are 46 80 cells meeting the expectations described on the battery day? How long will it be until the cells meet those goals? True |
| 109 | 0 | Neutral | Yeah |
| 110 | 0 | Neutral | So on battery day, we established a cost down roadmap through 2026, across five areas of effort |
| 111 | 0 | Neutral | There was the cell design |
| 112 | 0 | Neutral | We discussed anode cathode materials, the structural pack concept, and the cell factory itself |
| 113 | +1 | Positive | We've been making progress across all these aspects since then |
| 114 | +2 | Strong Positive | For the cell factory, the Texas 46 80 factory we are partway through building and commissioning and installing and operating will be 70% lower capex per gigawatt hour than typical cell factories when fully ramped in line with what we described on battery day |
| 115 | +1 | Positive | And we're continuing to further pursue densification and investment reduction opportunities in future factory buildouts like in Nevada |
| 116 | +2 | Strong Positive | On the cell design, we're in production with not only the first generation tablet cell we unveiled on battery day, but a second, more manufactured version in Texas today |
| 117 | 0 | Neutral | On the cathode material side, we have a number of activities underway per the battery day roadmap for lithium, our Corpus Christi lithium refinery breaks ground this May |
| 118 | +1 | Positive | Our goal is to start commissioning portions of the facility for the end of the year |
| 119 | 0 | Neutral | The refinery uses the sulfate free spodamine refining process with reduced process costs, no acid or caustic reagents lower embodied energy and actually produces a beneficial byproduct that can be repurposed in construction materials |
| 120 | 0 | Neutral | We discussed all of these concepts on battery day |
| 121 | 0 | Neutral | Same with cathode precursor |
| 122 | 0 | Neutral | We successfully demonstrated a lower process cost zero waste water precursor process that we described on battery day at both lab and pilot scale and are on the detailed design phase for incorporating this technology into the front end of our Austin cathode facility |
| 123 | 0 | Neutral | On cathode production, we are 50% equipment and 75% utilities installed at our new cathode building in Austin with our goal to begin dry and wet commissioning this quarter and next quarter with a target to produce first material before the end of the year |
| 124 | +2 | Strong Positive | Structural Pack we saw big improvements with pack manufacturing with the 46 80 cell and the structural pack concept 50% lower Capex and 66% smaller factory for the same output in gigawatt hours per year |
| 125 | +1 | Positive | We do believe structural as a concept is a good one |
| 126 | 0 | Neutral | It's simpler |
| 127 | 0 | Neutral | We'll continue to structurally load the cells and use the pack at the floor of the vehicle while iterating the design to closer to B level execution of this A level architecture in future programs and zooming out |
| 128 | 0 | Neutral | For the 46 80 team, Q One was all about cost and quality |
| 129 | +1 | Positive | We made significant improvements in both areas |
| 130 | +2 | Strong Positive | In Texas, production increased 50%, quarter over quarter, through yields increased 12% and Cato peak rate increased by 20% and through yields improved by 20% altogether |
| 131 | +2 | Strong Positive | The team accomplished a 25% reduction in Cogs over the quarter and we are on track to achieve steady state cost targets over the next twelve months and going forward for the rest of the year |
| 132 | 0 | Neutral | The priority one is yielding cost for the 46 80 program as we steadily ramp production ahead of Cyber Truck next year |
| 133 | 0 | Neutral | Thank you very much |
| 134 | 0 | Neutral | The next question is what do you anticipate 2023 automotive gross margins? X credits will be at the company's current pricing levels |
| 135 | 0 | Neutral | Yeah, I can start off on this one |
| 136 | -1 | Negative | This is a difficult environment to make a projection like this |
| 137 | 0 | Neutral | There's a lot of macro uncertainty |
| 138 | 0 | Neutral | There's also headwinds and tailwinds |
| 139 | 0 | Neutral | And this is basically a question, I think, that's asking about our viewpoint on where costs will go within costs |
| 140 | 0 | Neutral | There's a set of costs in which we do control the set of costs in which we're kind of subject to what's going on in the macro world |
| 141 | 0 | Neutral | Within the bucket of things we control |
| 142 | 0 | Neutral | Most of the cost down that we're working on is around ramping our Austin factory, stabilizing that and then doing the cost optimization work once we get to our intended volumes there |
| 143 | 0 | Neutral | A part of the cost journey in the Austin factory is, as Drew mentioned, the 46 80 cell which is an input into our Austin cogs |
| 144 | 0 | Neutral | And so, as the 46 80 program improves over the course of the year on cost, as Drew mentioned, and then the non cell portion of the factory improves |
| 145 | +1 | Positive | We see a pretty good trajectory in the Austin facility |
| 146 | 0 | Neutral | A similar story exists in the Berlin factory |
| 147 | 0 | Neutral | It does not have 46 80 as an input, but for that factory, the journey to complete localization is still ongoing |
| 148 | 0 | Neutral | And so over the course of this year, as volume increases, more localization occurs |
| 149 | +1 | Positive | We do see a good path to cost reduction in the Berlin factory as well |
| 150 | 0 | Neutral | In existing factories too |
| 151 | 0 | Neutral | We talk about this on every call, so I don't need to rehash it |
| 152 | +1 | Positive | But the expectation is that every existing factory improves all of their key metrics, and we continue to see the progress there |
| 153 | 0 | Neutral | There's also a handful of other costs in which we have influence, but the philosophy here is that we're aggressively going across every cost bucket that we can within the world, that we don't control the two major costs, there being logistics, which fortunately, is moving in our favor |
| 154 | 0 | Neutral | And I think our supply chain team has done a great job both on logistics optimization and taking advantage of reduced spot rates where they can |
| 155 | 0 | Neutral | So thank you to our supply chain team |
| 156 | 0 | Neutral | And then there's the commodities world, which has been a huge page point in our cost structure over the last, say, two years or so |
| 157 | -1 | Negative | And we're still kind of at the maximum of paying for commodities in our cost structure |
| 158 | 0 | Neutral | Maxed out in the second half of last year |
| 159 | +1 | Positive | We did start to see in Q One a little bit of improvement |
| 160 | +1 | Positive | We think there'll be a little bit more improvement in Q Two |
| 161 | -1 | Negative | Lithium has dropped a lot |
| 162 | +1 | Positive | It's worth mentioning that the price of lithium has dropped significantly |
| 163 | 0 | Neutral | Yeah |
| 164 | 0 | Neutral | And that's the piece that we expect to see more impact from |
| 165 | 0 | Neutral | In Q two |
| 166 | +1 | Positive | Generally, as a company, we do expect commodity prices to come down and have a more meaningful impact in the second half of the year |
| 167 | 0 | Neutral | Yeah, so this is our approach, how that nets out |
| 168 | 0 | Neutral | I mean, just a lot of risk, and we'll have to see how the year progresses |
| 169 | 0 | Neutral | Thank you |
| 170 | 0 | Neutral | The next question is how has global order intake tracked since the most recent round of price cuts? I think the overall thing we can say is that orders are in excess of production |
| 171 | 0 | Neutral | Thank you |
| 172 | 0 | Neutral | And maybe the last question from investors |
| 173 | 0 | Neutral | Can you give updated specs and pricing for Cybertruck and any new features that will make it to production? Well, I think we'll save that for the Cybertruck handover, which will hopefully be around the end of Q Three this year |
| 174 | +1 | Positive | And one thing I am confident of saying is that it's an incredible product |
| 175 | 0 | Neutral | It's a hall of Famer, I think, and a product like this only comes along once in a long while, so people will not be disappointed at all |
| 176 | +1 | Positive | It's amazing |
| 177 | 0 | Neutral | Great |
| 178 | 0 | Neutral | Thank you very much |
| 179 | 0 | Neutral | And let's go to analyst questions |
| 180 | 0 | Neutral | We'll start with Alex Potter from Piper Sandler |
| 181 | 0 | Neutral | Alex, go ahead and unmute |
| 182 | 0 | Neutral | Can you hear me? Yes |
| 183 | 0 | Neutral | Okay, perfect |
| 184 | 0 | Neutral | So first question was on Lathrop |
| 185 | +1 | Positive | Obviously, it's great to see the growth there |
| 186 | 0 | Neutral | Just wondering when you think that facility might be closer to full utilization |
| 187 | 0 | Neutral | Are you just sort of deliberately working your way up the S curve there? Demand obviously isn't the limitation |
| 188 | 0 | Neutral | So what are the steps, I guess, to unlocking full utilization there? Sure, there are some classic factory ramp aspects of what's going on in Lathrop |
| 189 | 0 | Neutral | We actually have two phases of the capex there |
| 190 | 0 | Neutral | We phased some of the General Assembly parts of the facility, but in addition, we also have ramps with our suppliers that we are following |
| 191 | 0 | Neutral | So both on the cell side and on the power electronics side |
| 192 | 0 | Neutral | And we will see that unlock in the latter half of this year with both those inputs |
| 193 | 0 | Neutral | So the overall facility was phased with the second phase of traffic coming online towards the end of this year |
| 194 | 0 | Neutral | Okay, great |
| 195 | 0 | Neutral | And then I guess my second question is on your ability to serve other markets out of Shanghai |
| 196 | 0 | Neutral | Obviously, the facility in Berlin should be opening up your ability to, I guess, allocate more vehicles to Southeast Asia, Australia, other areas |
| 197 | 0 | Neutral | I'm just wondering what other regions you think you're maybe not yet serving effectively |
| 198 | 0 | Neutral | What are your timelines for addressing some of those gaps in your regional exposure? Thanks |
| 199 | 0 | Neutral | Yes, that's a good question because there are still many parts of the world that we do not yet serve with respect to vehicles especially |
| 200 | +1 | Positive | So we do expect to open up new markets around the world |
| 201 | 0 | Neutral | And while those markets are not necessarily individually gigantic, they do add up to if you add up a whole bunch of markets, they do collectively sum up to something significant |
| 202 | +1 | Positive | So it's high time that Tesla offered its cars to the rest of the world, and that is something that we intend to do |
| 203 | 0 | Neutral | Thank you very much |
| 204 | 0 | Neutral | Let's go to the next analyst, George from Canaccord |
| 205 | 0 | Neutral | Go ahead and amute |
| 206 | 0 | Neutral | Hi, thanks for taking my question |
| 207 | 0 | Neutral | I was wondering first if you could discuss your FSD take rates and whether you've seen any significant positive or negative change there |
| 208 | 0 | Neutral | And also, given that you've reduced the prices for your vehicles, do you think you need to do that for FSD as well? Thanks |
| 209 | 0 | Neutral | I'll decline to answer the details on the FSD take rate, but it's a tricky pricing question because the value of a car that is autonomous is enormous |
| 210 | 0 | Neutral | So in a way, the price right now is an option value on an autonomous vehicle, and that value is ultimately and be very significant for those that are using the FSD beta |
| 211 | +1 | Positive | I think you can see the improvements are really quite dramatic |
| 212 | 0 | Neutral | There'll be a little bit of two steps forward, one step back between releases for those trying the beta |
| 213 | +2 | Strong Positive | But the trend is very clearly towards full self driving, towards full autonomy and I hesitate to say this, but I think we'll do it this year |
| 214 | 0 | Neutral | So that's what it looks like |
| 215 | 0 | Neutral | Yeah |
| 216 | 0 | Neutral | Thank you |
| 217 | 0 | Neutral | Maybe on the dramatic change we've seen in EV related commodity prices, do you think it's a reflection of any recent overcapacity in mining and refining, or is that sort of a coincidence indicator on global EV demand? And how do you expect those prices to kind of track over the next several quarters? Thank you, and I wish I had a crystal ball |
| 218 | 0 | Neutral | To answer your question, I don't know if we can provide a question that would have any value, really |
| 219 | 0 | Neutral | I think we're in uncertain times and if somebody's got a crystal ball they can lend me, I really like to borrow it |
| 220 | -1 | Negative | But these are uncertain times |
| 221 | 0 | Neutral | My guess is economics told me weather for about a year or so and then roughly twelve months and and then this is my guess |
| 222 | -1 | Negative | I'm it's just pure speculation |
| 223 | 0 | Neutral | Stormy weather for about twelve months and and then provided there are not no major geopolitical wild cards that show up, things start getting sunny around spring next year |
| 224 | 0 | Neutral | The only thing I would say on the EV materials markets, they're not all super liquid |
| 225 | 0 | Neutral | And some of them, for example, like less than like single digit percentage of the market is actually traded on the spot market |
| 226 | 0 | Neutral | And not only are they not super liquid, storage isn't particularly facile for all of the materials |
| 227 | 0 | Neutral | So small mismatches in supply and demand drive, like large price wings |
| 228 | 0 | Neutral | Not really real price wings, but just like temporarily large price wings |
| 229 | 0 | Neutral | So it's hard to read into those price wings |
| 230 | 0 | Neutral | I don't know |
| 231 | 0 | Neutral | Carnival? You want anything? Well, this is carnival |
| 232 | -1 | Negative | We are seeing, as Elon mentioned, quite a bit of softening in the lithium carbonate market |
| 233 | 0 | Neutral | This was six months ago, we were trading at like $85,000 a ton, and today's spot price is about 26 |
| 234 | -2 | Strong Negative | So there's been a dramatic decrease in that |
| 235 | 0 | Neutral | Of course, we were able to take advantage of low lithium pricing earlier on with fixed price contracts, and we find that this is going to be another opportunity moment to basically extend that into the later half of the decade |
| 236 | 0 | Neutral | But at the quantities we're procuring, we're not as impacted by the spot market because we have those contracts in place and we're just going to be going and doing more of that |
| 237 | 0 | Neutral | The other thing that's happening is because of the price spike, a lot of the companies that are in this business are becoming more ambitious about finding more upstream resources and exploring locations in Africa as well as South America |
| 238 | 0 | Neutral | So that's also helping the macro situation with pricing |
| 239 | 0 | Neutral | Yeah |
| 240 | 0 | Neutral | On the lithium front, to emphasize the choke point is much more on refining capacity than it is on mining |
| 241 | 0 | Neutral | Lithium is actually very common throughout the world, including in the US |
| 242 | 0 | Neutral | It's just a very common element on Earth is lithium |
| 243 | 0 | Neutral | So it's much more a question of where's the refining capacity and can the refining capacity keep up? That's really what matters more than where is the lithium ore? It's everywhere, basically |
| 244 | 0 | Neutral | I think that same question also extends to refining of the Cathode and to some degree refining of the anode |
| 245 | 0 | Neutral | And this is why at Tesla, we're building our lithium refinery capability, corpus Christi, and our Cathode refinery outside of Austin |
| 246 | +1 | Positive | It's worth noting, I hope other companies do the same thing |
| 247 | +2 | Strong Positive | We'll have by far the most lithium refining capability and the most Cathode refining capability in North America, I think probably more than everyone else combined by a lot |
| 248 | 0 | Neutral | So can other people please do this work? That would be great |
| 249 | -1 | Negative | We're begging you |
| 250 | -1 | Negative | We don't want to do it |
| 251 | 0 | Neutral | Can someone please, instead of making a picture sharing app, please refine lithium mining and refining heavy industry? Come on |
| 252 | 0 | Neutral | It's fun |
| 253 | 0 | Neutral | It's actually fun |
| 254 | 0 | Neutral | Yeah, exactly |
| 255 | 0 | Neutral | It's real |
| 256 | 0 | Neutral | We're here ready to buy |
| 257 | 0 | Neutral | I just want to emphasize Tesla's not doing this because we want to do it |
| 258 | 0 | Neutral | We have a lot of fish to fry, obviously, but we're doing it because others aren't doing it, and we wish others would do it |
| 259 | 0 | Neutral | Awesome |
| 260 | 0 | Neutral | Thank you very much |
| 261 | 0 | Neutral | Let's go to Emmanuel Rossner from Deutsche Bank |
| 262 | 0 | Neutral | Hey, Emmanuel, can you hear me? Yeah, we can |
| 263 | 0 | Neutral | Perfect |
| 264 | 0 | Neutral | Thank you so much for taking my question, maybe your first question for elon on your pricing strategy |
| 265 | 0 | Neutral | So if I understand your message, you're saying Tesla feels it's worth maximizing the volume, increasing the size of the fleet as fast as you can, because you'll be able to monetize this over the life cycle of the vehicle |
| 266 | 0 | Neutral | Can you be a little bit more specific around ways you would be able to monetize sort of like this existing fleet in the future? Obviously, I think autonomous seems to be a big piece of it |
| 267 | 0 | Neutral | My understanding was that robotaxi would probably be for the next generation vehicle, not the existing one |
| 268 | 0 | Neutral | So I guess in which ways would you monetize it? Sorry, the robotaxi terminology can be a bit confusing because that's sort of like a generic term for our next generation vehicle |
| 269 | 0 | Neutral | And we obviously are working on next generation vehicle |
| 270 | +1 | Positive | It can be very compelling |
| 271 | 0 | Neutral | This is just not the time to talk about it in details product |
| 272 | 0 | Neutral | So we internally call it robotaxi |
| 273 | +2 | Strong Positive | But really all of the vehicles that have hardware Three, which is the vast majority of our fleet, we believe will achieve full autonomy |
| 274 | 0 | Neutral | So they will be a robot, like a model Three or model Y would be a robotaxi, a robotic taxi |
| 275 | 0 | Neutral | So yeah, that's to the best of our knowledge, that we believe the current hardware can achieve full autonomy |
| 276 | 0 | Neutral | Understood |
| 277 | 0 | Neutral | And then maybe a question for Zach |
| 278 | 0 | Neutral | Back on the automotive gross margins |
| 279 | 0 | Neutral | I think, I guess a few months ago, even after major price cuts, you felt pretty strongly that 20% automotive gross margin was still probably a reasonable floor |
| 280 | -1 | Negative | Obviously, the macro has gone worse and additional price cuts have happened |
| 281 | 0 | Neutral | Is there anything else that has changed in terms of the outlook? Is it just the macro deteriorating? Is it the competitive landscape? Anything else that sort of makes you think differently around the full year? And is there a way, therefore, to frame a floor? Yeah, about half of the miss against that previous conversation last quarter is attributed to adjustments we made in pricing in the second half of the quarter |
| 282 | 0 | Neutral | I guess you could argue that that lowers the floor in a sense |
| 283 | -1 | Negative | We've also made pricing adjustments so far this quarter, so that brings it down further |
| 284 | 0 | Neutral | About the other half of the myth in Q |
| 285 | 0 | Neutral | One was attributed to things that are non, non recurring |
| 286 | 0 | Neutral | So I mentioned these in my opening remarks |
| 287 | 0 | Neutral | The warranty adjustment for cars that were previously produced but not part of the pedigree of cars we're building now, and some autopilot related deferrals as we make some technology changes here, that those deferrals should get recognized once some of the software catches up |
| 288 | 0 | Neutral | So those two things are non repeating |
| 289 | 0 | Neutral | So hopefully that helps answer your question |
| 290 | 0 | Neutral | Yeah, there's really two macro factors that are tricky, the biggest being the interest rate |
| 291 | 0 | Neutral | So if there's a very high Fed rate or interest rates are very high, every time that the Fed raises interest rates, that's equivalent to increasing the price of a car |
| 292 | -1 | Negative | It makes the cars less affordable because people are able to buy cars as a function of what they can afford on a monthly basis |
| 293 | -1 | Negative | It's almost directly equivalent to a price increase |
| 294 | 0 | Neutral | Is any kind of interest rate increase then? The other factor is whenever there's uncertainty in the economy, people will generally postpone big new capital purchases like a new car |
| 295 | 0 | Neutral | This is a natural human reaction |
| 296 | 0 | Neutral | So if people are reading about layoffs and whatnot in the press, they're like, well, they might be worried about they might be laid off |
| 297 | -1 | Negative | So then they'll be naturally a little more hesitant than they would otherwise be to buy a new car |
| 298 | +1 | Positive | Now, this is just the nature of the auto industry, but there will be tremendous amount of pent up demand for new cars |
| 299 | 0 | Neutral | But it goes through cycles |
| 300 | 0 | Neutral | Thank you |
| 301 | 0 | Neutral | Let's go to Ben Kaylo from Baird |
| 302 | 0 | Neutral | Ben, go ahead and unmute |
| 303 | 0 | Neutral | Hey, guys |
| 304 | 0 | Neutral | Elon, when you talk about many fish to fry, you talked about Dojo being a product that you can sell outside of Tesla |
| 305 | 0 | Neutral | How do we rank all the things you have going on and then in the economic environment? I mean, like heat pumps and everything else that you have going on versus investing in the vehicle business? Or is that not the right way to look at it? I'm not sure I fully understand your question, but I'd look at Dojo as like kind of a long shot bet |
| 306 | +2 | Strong Positive | But if it's a long shot bet that pays off, it'll pay off in a very big way |
| 307 | 0 | Neutral | But potentially you |
| 308 | 0 | Neutral | Know, yeah, potentially in a very, very big way, like, you know, in the multi hundred billion dollar level |
| 309 | 0 | Neutral | But, but the thing that like, you know, still put it in the long shot category, but long shot with a multi hundred billion dollar potential outcome |
| 310 | 0 | Neutral | So it's a bet worth making, but not one you can sort of say like take it to the bank type of thing |
| 311 | 0 | Neutral | Although these days, take it to the bank, it's maybe not as secure as it used to be, so and obviously we're big believes in heat pumps, and that is on our list over time, is to do a really good heat pump for homes and commercial offices and stuff |
| 312 | 0 | Neutral | And we have the technology, it's really good, but it's a backbone item |
| 313 | 0 | Neutral | Our focus is very much on vehicles, autonomy, stationary storage, basically solving sustainable energy and solving autonomy, which would be like solving autonomy if we're able to have a fleet of several million vehicles that with a software update can be potentially worth several times their original value |
| 314 | +2 | Strong Positive | If that happens, and I think it will happen, that'll be the biggest asset value increase in history, I think |
| 315 | 0 | Neutral | Thank you |
| 316 | 0 | Neutral | Pricing |
| 317 | 0 | Neutral | A lot of pundits talk about the pie and losing share or gaining share, but how do you guys look at pricing versus EVs or Ice vehicles? Or does that not come into the equation? Sorry to ask about pricing again |
| 318 | 0 | Neutral | Thank you |
| 319 | 0 | Neutral | No, it's really just like every day we get a daily real time update of how many cars were ordered yesterday, how many cars were produced yesterday |
| 320 | +2 | Strong Positive | If there's a company that's got more real time data than Tesla, I'm not sure there's any company on Earth that has better real time data than Tesla |
| 321 | 0 | Neutral | Except maybe SpaceX Starlink for the other car companies |
| 322 | 0 | Neutral | They will make the cars, send them to the dealers, then the dealers will sell the cars, and then it takes quite a long time for them to get the data back to actually figure out how many cars were sold, whereas we know how many cars were ordered yesterday throughout the world |
| 323 | 0 | Neutral | So our fingers on the pulse is real time and does not have latency |
| 324 | 0 | Neutral | Whereas the other car companies have a lot of latency in their data, as does the government |
| 325 | 0 | Neutral | The government has a lot of latency in their data |
| 326 | 0 | Neutral | So we're just looking at and saying, okay, what does it take to achieve a clearing price for our vehicle production? And then we make a pricing change and we see what happens immediately and adjust course |
| 327 | 0 | Neutral | So we're adjusting course and we're thinking about it literally every day, seven days a week |
| 328 | 0 | Neutral | Seven days a week |
| 329 | 0 | Neutral | I look at that email and so does the rest of the team |
| 330 | 0 | Neutral | We try to make the least dumb decision that we can |
| 331 | +1 | Positive | On balance, I think our decisions are pretty good |
| 332 | 0 | Neutral | Sometimes they'll be dumb, but on average they're, I think, better than the rest of industry |
| 333 | 0 | Neutral | Just to add on the question about EV market share or Ice, this comes up a lot |
| 334 | 0 | Neutral | I think a lot of the public debate is around this concept of EV market share |
| 335 | 0 | Neutral | We don't look at it that way |
| 336 | 0 | Neutral | We look at it as market share of cars |
| 337 | -1 | Negative | It's the car market, not the EV market |
| 338 | +2 | Strong Positive | And actually, the mission of the company requires internal combustion engine cars to be switched over to electric vehicles |
| 339 | 0 | Neutral | So that's what we pay attention to |
| 340 | 0 | Neutral | I've said that last time, too |
| 341 | 0 | Neutral | You guys got to stop looking at it as the Evbe market |
| 342 | 0 | Neutral | How many cars are we selling? Just start looking at it that way |
| 343 | +2 | Strong Positive | All cause will be EVs |
| 344 | 0 | Neutral | It's you know, it's gonna you know, I've said this for a long time, but we'll look back, I don't know, assuming civilization is still around in 20 years, we'll look back on internal combustion engine vehicles the same way we look back on external combustion engine vehicles, which like a steam engine |
| 345 | 0 | Neutral | A steam engine is an external combustion engine vehicle |
| 346 | 0 | Neutral | And there's full of few around |
| 347 | 0 | Neutral | They're kind of quirky and kind of cool collectors items |
| 348 | 0 | Neutral | That's how gasoline cars will be in the future |
| 349 | 0 | Neutral | Thank you |
| 350 | 0 | Neutral | Let's go to Colin Rush from Oppenheimer |
| 351 | 0 | Neutral | Colin, go ahead |
| 352 | 0 | Neutral | Unmute, please |
| 353 | 0 | Neutral | Thanks so much, guys |
| 354 | 0 | Neutral | Can you talk a little bit about how much of the actual cost structure is variable on these vehicles? And if you could give us a range on plus or minus the lithium cost within those contracted volumes that you're seeing |
| 355 | 0 | Neutral | Well, I think, again, we'd really love to have a crystal ball here, but we don't have it |
| 356 | 0 | Neutral | Depending on what time scale you're looking at, most of the car is variable, most car costs variable, probably |
| 357 | +1 | Positive | If I were to guess, I think we will see improved costs from suppliers |
| 358 | 0 | Neutral | Yeah, I think we will |
| 359 | +1 | Positive | That is our expectation |
| 360 | +1 | Positive | We're already starting to see that |
| 361 | 0 | Neutral | Elon, I think you'd mentioned before we anticipated a crash in the lithium prices |
| 362 | 0 | Neutral | And some of that has flowed through by way of lithium carbonate reductions into battery cost |
| 363 | 0 | Neutral | And the same thing will happen with lithium hydroxide |
| 364 | 0 | Neutral | The length of the supply chain matters also because what we're talking about is very far upstream |
| 365 | 0 | Neutral | So by the time it makes it into the battery that it's up in a car, it'll be several months |
| 366 | 0 | Neutral | But beyond just the commodity pricing, as Zach mentioned earlier, we're also very focused on other metrics that make production very efficient |
| 367 | 0 | Neutral | For example, detention and Demerge air expedites |
| 368 | -2 | Strong Negative | I think our air expedites are down 90% |
| 369 | -2 | Strong Negative | Detention and demerge is down 93% from the peaks that can be hundreds of thousands of dollars per vehicle |
| 370 | 0 | Neutral | So we're sort of attacking all vectors and becoming very efficient |
| 371 | 0 | Neutral | Okay, my follow up is really around stationary storage demand on the utility scale |
| 372 | 0 | Neutral | Obviously, there's a gigantic queue for interconnection in the US |
| 373 | 0 | Neutral | And can you talk about the volume of quotation you're seeing at this point around stationary storage for that renewables queue on a global basis and how much of that is converting into actual sales? Drew, do you want to take that? Yeah, that's also not exactly how we look at it, really |
| 374 | 0 | Neutral | We're not engaged in the interconnection queue |
| 375 | 0 | Neutral | We're focused on ramping megapac as quickly and efficiently as we can, and we have visibility into the pipelines of a variety of different renewable energy and just pure stationary storage developers |
| 376 | 0 | Neutral | And we also develop our own projects and we're being selective and trying to pick the projects that best fit our mission and our objectives |
| 377 | 0 | Neutral | Yeah |
| 378 | 0 | Neutral | Again, this is not a product call, but we'll have something |
| 379 | +1 | Positive | We're making improvements on many fronts, including megapacks |
| 380 | 0 | Neutral | So I think some of those improvements will improve the speed at which you can connect the megapacks to the grid |
| 381 | 0 | Neutral | Thank you |
| 382 | 0 | Neutral | The next question is from Mark Delaney from Goldman Sachs |
| 383 | 0 | Neutral | Yes, good afternoon |
| 384 | 0 | Neutral | Thank you for taking the question |
| 385 | 0 | Neutral | Do you still see 2 million units as an upside case for volume this year? And is the gating factor for reaching 1 |
| 386 | 0 | Neutral | 8 million or 2 million units in 2023 still supply chain, as was mentioned on your last conference call? Or is it more about demand at this point? Well, if you have a crystal bowl, you can lend me back to the crystal ball situation |
| 387 | -1 | Negative | These are volatile times from a production standpoint |
| 388 | +1 | Positive | If things go well, we've got a shot at 2 million vehicles this year, but that is the upside case and we feel comfortable with 1 |
| 389 | 0 | Neutral | 8 and we'll have to see how this year unfolds |
| 390 | 0 | Neutral | That's helpful |
| 391 | 0 | Neutral | Thanks |
| 392 | 0 | Neutral | And then the company had spoken at the investor day and for the past conference calls about opening up its vehicle charging network |
| 393 | 0 | Neutral | Can you speak to some of the feedback you've been getting from both Tesla owners and non Tesla owners and how the ramp of the charging network may progress from here? Thanks |
| 394 | 0 | Neutral | Drew, you want to take it? Yeah |
| 395 | 0 | Neutral | So, as you may have seen, we opened our first V four posts in Europe and our Magic Dock posts in North America and Q One |
| 396 | 0 | Neutral | And that is indicative of the direction we're heading with universal compatibility for all vehicles, no matter where the charge port is, et cetera, in all major markets |
| 397 | 0 | Neutral | And we're going to continue to roll out those sort of improved offerings as we build new stations |
| 398 | +1 | Positive | We're always balancing our ability to serve our own customers with our ability to serve new customers |
| 399 | 0 | Neutral | When doing that, I think we've been able to balance it rather well |
| 400 | 0 | Neutral | For example, in Europe, 50% of all of our of our supercharging stations are open to all EVs, and we've been able to do that without any increase in wait times at all for anybody |
| 401 | +1 | Positive | So we're going to continue to take a similar approach as we do this in North America and China over the coming quarters |
| 402 | 0 | Neutral | Okay, thank you very much |
| 403 | 0 | Neutral | Let's go to Rod Lash from Wealth Research |
| 404 | 0 | Neutral | Hi, everybody |
| 405 | 0 | Neutral | I just wanted to first just follow up on your comments in your letter about leveraging your cost position as others struggle with unit economics and also taking into account the lifetime revenue actually in a way that most other automakers will never see |
| 406 | 0 | Neutral | Just given your service network and supercharging and other attributes, can you just maybe give us a sense of how far you'd be willing to take this? Are there brackets around the range of initial margin that you'd be comfortable with? And again, any color that you might provide on the updated range of margins that you'd expect in the auto business? I think we may have answered this question or tried to answer this question a few times, but it's difficult to say what the margin will be |
| 407 | 0 | Neutral | It depends on what the macroeconomic environment is |
| 408 | +1 | Positive | Like, for example, if the Fed were to lower the rates, that would be super helpful for demand |
| 409 | -1 | Negative | If they raise them, that just raises the interest cost that buyers have to pay to buy a car |
| 410 | -2 | Strong Negative | So it reduces affordability and therefore reduces demand |
| 411 | 0 | Neutral | But if we look past, say, this year, or like could go, you know, sometime next year, middle next year or so, I think things are looking really I think, like I said, we'll bet store if there's some major geopolitical wild card that turns up |
| 412 | +1 | Positive | But in the absence of that, I think I would be very optimistic about middle of next year and the next year |
| 413 | 0 | Neutral | Just to add Elon's comments, just two other points |
| 414 | 0 | Neutral | What's really important for us this year, in addition to just managing the day to day of the business, but is also investing in, as Elon mentions, what 2024 and 2025 will look like |
| 415 | +2 | Strong Positive | And so using the cash generated from the sale of products today and reinvesting that, this is very important for us |
| 416 | 0 | Neutral | I think that what happens to margins over the next couple of quarters only matters in the context of what that means for our ability to reinvest into 2024 and 2025 |
| 417 | 0 | Neutral | And we have a lot of space before that becomes something that we have to revisit our investment plans |
| 418 | +1 | Positive | And so we're planning to keep the business healthy |
| 419 | 0 | Neutral | But I just want to caution folks about reading too much into what happens over the near term here, because we're very focused as a company on making sure that when we exit this macroeconomic situation, this company is positioned in the best possible way |
| 420 | 0 | Neutral | Yeah, exactly |
| 421 | +2 | Strong Positive | Just to elaborate on that point, though, the long term lifetime revenue that you're targeting from each vehicle is massive |
| 422 | 0 | Neutral | So if you took that to the extreme, it would seem that you'd be comfortable with a relatively low initial margin |
| 423 | 0 | Neutral | Am I correct? Misinterpreting that or is that exactly right? That is exactly right |
| 424 | 0 | Neutral | Okay |
| 425 | 0 | Neutral | Normally in a recession, when consumers feel less financially secure, actually price elasticity deteriorates just based on your pulse taking of the consumer do you have a view on elasticity of demand? Well, I can't emphasize enough just fundamental question of affordability |
| 426 | 0 | Neutral | For most people, their ability to buy a car is a function of of can they make monthly payment or not |
| 427 | 0 | Neutral | And, you know, so like I said, if interest rates are really high like they are right now, then in some cases people can't get a loan at all |
| 428 | -1 | Negative | I think probably banks are pretty not leaning forward in providing loans, I expect, these days |
| 429 | 0 | Neutral | So, you know, so that's but like the there there is there is quite a powerful story here when you going back to something I was alluded to a moment ago, or mentioned a moment ago, that Tesla is in a uniquely strong strategic position because we're the only ones making cars that, technically, we could sell for zero profit for now and then yield, actually, tremendous economics in the future, but through autonomy, no one else can do that |
| 430 | +2 | Strong Positive | Not sure how many of you will appreciate the profundity of what I've just said, but it is extremely significant |
| 431 | 0 | Neutral | Thank you |
| 432 | 0 | Neutral | Let's go to Adam Jonas from Morgan Stanley |
| 433 | 0 | Neutral | Hi, everybody |
| 434 | 0 | Neutral | So first, Elon, good luck with tomorrow's launch at Boca Chica |
| 435 | 0 | Neutral | Break a leg |
| 436 | 0 | Neutral | We definitely can't have too much luck in the rocket business, that's for sure |
| 437 | +1 | Positive | That's incredible |
| 438 | 0 | Neutral | So now that you've gotten to know the Twitter architecture kind of intimately, well over the past six months, what can you tell Tesla stakeholders about how an X |
| 439 | 0 | Neutral | comor super app could be potentially accelerative to Tesla's business model? Well, I don't know |
| 440 | 0 | Neutral | I guess it could potentially make it easier to buy cars |
| 441 | 0 | Neutral | We are straying somewhat off topic here |
| 442 | 0 | Neutral | Okay, all right |
| 443 | 0 | Neutral | You know, do I think there's some benefit? I think probably there's some benefit |
| 444 | 0 | Neutral | Yeah, sure, I get it |
| 445 | 0 | Neutral | Elon |
| 446 | 0 | Neutral | So just as a follow up on manufacturing, you're a student of history, and you'll know that back in 1913, henry Ford introduced the moving assembly line in Highland Park, Michigan, and the price of a Model T, which had already been undercutting cars around the time fell another 70 or 80%, and hundreds of rival car companies went bust |
| 447 | 0 | Neutral | Yeah, I'm wondering if history is repeating itself here, Elon, and that the recent pattern of cuts with you is way ahead of the cost curve compared to competition |
| 448 | 0 | Neutral | It seems like it's a calculated strategy, not just in reaction to competition or changing supply demand in the market, but could we catalyze some Darwinian forces in the EV market? Well, we're not trying to take pricing actions in order to be deliberately to deliberately undermine competitors or anything like that |
| 449 | +1 | Positive | We really don't think about competitors that much |
| 450 | 0 | Neutral | We just look at, do people like our cars? How can we make the product better? Can they afford our cars and the things like improving service and whatnot |
| 451 | 0 | Neutral | But like I said, we do have this unique strategic advantage that we're making a car that if autonomy pans out, and we think it will, where that asset actually will be worth a hell of a lot more in the future than it is now |
| 452 | 0 | Neutral | So it is technically possible to sell it at zero profit, but still have the net present value of future cash flows associated with that asset be very significant and service and charging and insurance and all of these other ongoing revenue streams that other companies don't have |
| 453 | 0 | Neutral | Yeah, certainly we want all EVs to succeed too |
| 454 | 0 | Neutral | We just want to say that we're not in like, some malicious attacks to try to discount everybody |
| 455 | -1 | Negative | Definitely not |
| 456 | 0 | Neutral | We're like opening up superchargers |
| 457 | +2 | Strong Positive | We've made our patents available for free |
| 458 | +1 | Positive | So we're trying to be helpful here |
| 459 | -1 | Negative | We're not out to just destroy competitors or anything like that |
| 460 | -1 | Negative | We're trying to help competitors, frankly, in any way that we can |
| 461 | 0 | Neutral | Thank you |
| 462 | 0 | Neutral | Let's go to Den Levi from Barclays |
| 463 | 0 | Neutral | Hi, good evening |
| 464 | 0 | Neutral | Thank you |
| 465 | 0 | Neutral | First question, you're ramping supply at Austin and Berlin |
| 466 | 0 | Neutral | So wanted to understand just how critical it is to further increase volume at those plants just to get the vertical integration benefits in the face of the sort of market with some demand questions |
| 467 | 0 | Neutral | And just broadly, historically, you've been operating at the pace at which your supply allows you to produce, as opposed to gauging to demand |
| 468 | 0 | Neutral | Should we generally expect that you're going to continue to produce at whatever the max capacity that you're allowed within your supply constraints, regardless of what the broader economic environment is, just to continue to get that volume out there? Yes |
| 469 | 0 | Neutral | There could be obviously a macro shock that is so severe that people just stopped buying cars for some reason |
| 470 | +1 | Positive | But in the absence of that, we will continue to grow output at a rapid clip |
| 471 | 0 | Neutral | Great, thank you |
| 472 | 0 | Neutral | And then just on the margins associated with Austin and Berlin |
| 473 | -2 | Strong Negative | You mentioned Austin and Berlin have a margin drag until you reach intended volumes |
| 474 | 0 | Neutral | I don't know if you can disclose what those volumes are |
| 475 | 0 | Neutral | Then maybe you could just remind us of what the margin profile of Austin and Berlin will look like versus Shanghai once you get the vertical integration benefits in place |
| 476 | 0 | Neutral | Well, probably one half be quite as good as Shanghai |
| 477 | 0 | Neutral | Shanghai is hard as a very efficient cost structure, obviously our lowest cost structure in the world |
| 478 | +1 | Positive | But we do expect to make significant improvements in Austin and Berlin and continue to make improvements in Fremont as well |
| 479 | 0 | Neutral | We've increased this is Russian, by the way we increased our localization efforts |
| 480 | 0 | Neutral | So that will then drive down days on hand requirements |
| 481 | +2 | Strong Positive | We've made 10% quarter or quarter improvement on days on hand |
| 482 | 0 | Neutral | So we'll continue that path as the localization improves |
| 483 | 0 | Neutral | Okay, thank you very much |
| 484 | 0 | Neutral | And our final question comes from Philip Pushwa |
| 485 | +2 | Strong Positive | From Jeffries |
| 486 | 0 | Neutral | Yes |
| 487 | 0 | Neutral | Good evening |
| 488 | 0 | Neutral | Thanks for taking the question |
| 489 | 0 | Neutral | It's slightly longer term |
| 490 | +1 | Positive | I completely agree with your comments that we should look at Tesla in terms of auto market share, not EV market share |
| 491 | 0 | Neutral | But I'm just wondering, as you build up the market share globally, is there a limit to the direct selling business model as you practice it? And should we think about going forward, you need to look into the agency or using importers to basically develop market share more smoothly, I guess, globally |
| 492 | 0 | Neutral | In other words, is there kind of sell by date for the direct business model as you practice it? Today seems to be working well so far because we hear different feedback from customers who miss the human interaction or unhappy with the service |
| 493 | 0 | Neutral | And I'm just wondering if you're seeing some growth pains in there that would lead you to change |
| 494 | -1 | Negative | You're not seeing that |
| 495 | 0 | Neutral | Well, since we're always going to have some growing pains where at times and it depends on which geography we're talking about, where sometimes service is behind sales, sometimes it's ahead of sales |
| 496 | +2 | Strong Positive | Tesla is growing, I believe, faster than any company in history that makes a large, complex manufactured object |
| 497 | 0 | Neutral | If you're trying to match, it's always difficult to match exponentials |
| 498 | 0 | Neutral | But I think it is helpful to have the feedback loop with service because that means we feel the pain of service, and then we can adjust the design to make the car need less service |
| 499 | 0 | Neutral | And I think that gives us the right incentive structure, because the best service is no service, the car doesn't break |
| 500 | 0 | Neutral | Whereas if you have, say, a dealer network that is reliant upon service as a revenue, then you arguably have a misalignment of incentives where they're making money on service |
| 501 | -1 | Negative | But actually the best thing for the consumer is the car doesn't need servicing |
| 502 | 0 | Neutral | That's front |
| 503 | 0 | Neutral | If I can follow up, have you worked out, I mean, for many of your traditional competitors, a fair amount of profits for them comes from selling spare parts and servicing, and you don't have that in your profit structure |
| 504 | 0 | Neutral | And have you worked out the deficit you have compared to your peers? Yeah, actually, this one's something I could wax on about for a while because really people didn't understand that the best short selling argument against Tesla for the longest time was the fact that Tesla does not have an existing fleet |
| 505 | 0 | Neutral | And that the auto industry |
| 506 | -1 | Negative | The reason incumbents succeed and newcomers fail |
| 507 | 0 | Neutral | The biggest reason is that the incumbents have a large fleet and they're able to sell new cars at close to zero margin and then sell spare parts at a very high margin, sort of razors and blades type thing |
| 508 | +2 | Strong Positive | And so the only way to actually succeed, for a newcomer to succeed is to have a product that is so compelling that people are willing to pay a premium over the incumbent product |
| 509 | -2 | Strong Negative | And in the absence of electrification and autonomy, I don't think a newcomer can succeed |
| 510 | 0 | Neutral | Thank you very much, everyone |
| 511 | -1 | Negative | Unfortunately, that's all the time we have for this quarter |
| 512 | 0 | Neutral | We'll see you again in three months from now |
| 513 | 0 | Neutral | Thank you |
| 514 | 0 | Neutral | All right, hey, everybody, stay tuned here and we'll go through what we heard on that call |
| 515 | 0 | Neutral | Give me a second and I'll adjust the audio |
| 516 | 0 | Neutral | Let me know how it is right now, maybe a little bit quiet, and we'll just go through kind of what we heard on the call |
| 517 | 0 | Neutral | Should be a pretty quick recap as I think we heard a lot of the same stuff as I felt like the same question got asked time and time again |
| 518 | 0 | Neutral | Obviously, analysts wondering about demand, wondering about pricing, wondering about the effect on margins as Tesla goes forward |
| 519 | -2 | Strong Negative | And Tesla basically just saying, hey, we don't really care |
| 520 | 0 | Neutral | We're going to just sell the cars as we can sell them |
| 521 | 0 | Neutral | All right, before I get too far into it, I just want to make sure that the audio is good |
| 522 | 0 | Neutral | Let me close this out |
| 523 | 0 | Neutral | All right |
| 524 | 0 | Neutral | For some reason, I'm not seeing any chats right now |
| 525 | 0 | Neutral | Audio good |
| 526 | 0 | Neutral | Okay |
| 527 | 0 | Neutral | All right |
| 528 | 0 | Neutral | So as I was saying, I think we just heard a lot of the same stuff from most of those questions |
| 529 | 0 | Neutral | I think probably more than half of the analyst questions were relating to what was going on with pricing |
| 530 | 0 | Neutral | It sound like from Tesla's answers, they kind of gave up, I guess, on giving guidance for pricing for margins, rather |
| 531 | 0 | Neutral | So obviously, last quarter, we had talked about last quarter, tesla talked about that 20% automotive gross margin |
| 532 | 0 | Neutral | X credits x leasing |
| 533 | -2 | Strong Negative | It fell below that this quarter, probably to around 18% |
| 534 | 0 | Neutral | Have to go back and calculate those exact numbers |
| 535 | 0 | Neutral | Zach saying half of that missed was due to let me scroll back up here, but half of that missed due to non recurring items, and then half of that basically due to the pricing adjustments that they made in the second half of the quarter |
| 536 | 0 | Neutral | So you've got those pricing adjustments in the second half of the quarter |
| 537 | 0 | Neutral | And then as we move into Q two here, we've already had pricing adjustments |
| 538 | -1 | Negative | So we need to understand that with those pricing adjustments, that's going to continue to lower the possible margin floor |
| 539 | -2 | Strong Negative | So it's not going to be a pretty picture financially for a period of time here |
| 540 | -2 | Strong Negative | But Tesla is telling us that it's just not something that they care about |
| 541 | 0 | Neutral | I think, obviously, Wall Street's reaction to that is probably not going to be super positive, because Wall Street tends to care a lot more about what exactly is going to happen over the next two quarters than what's going to happen two years from now |
| 542 | -2 | Strong Negative | And Tesla is the exact opposite |
| 543 | -2 | Strong Negative | Tesla doesn't really care what happens over two quarters |
| 544 | 0 | Neutral | You pretty much heard Zach say it there |
| 545 | 0 | Neutral | As long as they've got enough capital, as long as the business is financially healthy and they can continue to reinvest as they need to for what they're targeting for future years, they're kind of fine with that, right? Like, who really cares what the exact earnings number is this year, whether that's a couple of billion dollars difference |
| 546 | -1 | Negative | It doesn't make any difference to Tesla, to be honest |
| 547 | 0 | Neutral | It makes a difference to investors and to wall street because people use that as a basis to extrapolate from |
| 548 | 0 | Neutral | But I think the last twelve months have shown us that that is a poor way of modeling the business, because that's what people were doing, right? And me, myself, using sort of the margins that we had at that point in time, in that high 20s range, even crouching into that 30% range, and looking at that and saying, oh, if tesla grows vehicle production by 30% |
| 549 | 0 | Neutral | Even if price come down a little bit, if they're still in that margin range, then these are kind of the earnings expectations that you could put on top of that |
| 550 | 0 | Neutral | But then you get into this year and it's completely different, right? So I think that's what tesla is saying is that, okay, right now we're in a not as strong margin position |
| 551 | 0 | Neutral | But at the end of this, as we continue to scale, which is our sole focus or our primary focus, that's going to improve our cost structure, fundamentally, it's going to improve the way that the business can be operated, even if the margins during this period are a little bit lower |
| 552 | 0 | Neutral | So ultimately it comes down to if you believe that on the other side of this, tesla will be in a better position or if you think that this is kind of the new normal and Tesla is going to continue to have to cut prices, margins are going to continue to decline, and there's no upside later on, whether that upside is through autonomy or continuing to improve the cost structure to the point where prices come back in line, costs come back down far enough that the margin can continue to be in that mid 20s range |
| 553 | 0 | Neutral | You heard Zach talk there about how they think about their products trying to target that mid 20s range |
| 554 | -2 | Strong Negative | So in short, from all of that, I think that it's not going to be a call that's very well received from wall street, because tesla is saying there that we don't care |
| 555 | -1 | Negative | We're going to sell as many cars as we can at whatever price we can |
| 556 | 0 | Neutral | And that's what it is at the end of the day |
| 557 | 0 | Neutral | And elon mentioned a few times that that unlocks potential future revenue from being able to sell autonomous services, to being able to sell supercharging service, other things like that, insurance |
| 558 | 0 | Neutral | So wall street probably doesn't believe in that, right? Like no one trusts elon that they're going to have a robotaxi out at the end of the year |
| 559 | 0 | Neutral | And I think elon reiterated again that that's his best guess |
| 560 | 0 | Neutral | It's been wrong a number of times in the past, but he continues to think that towards the end of this year, there's going to be some full autonomy |
| 561 | +2 | Strong Positive | So under that circumstance, obviously you don't care if you're selling the cars for zero because you can then earn a lot of revenue later on |
| 562 | -1 | Negative | But Wall Street is not going to believe in that until it's happening |
| 563 | -1 | Negative | So in that interim period, it's not going to be great for the stock, I don't think |
| 564 | 0 | Neutral | Obviously things can change, but that's just sort of my perception on how Wall Street is probably going to take the information that we heard today on the call |
| 565 | -1 | Negative | So we are down a little bit more |
| 566 | -2 | Strong Negative | I'm just looking at the stock here and sorry, that kind of jumped around a little bit, but you can see we're down now, down about 5% |
| 567 | -1 | Negative | I think heading into the call we were down around 4% |
| 568 | 0 | Neutral | So it's not like it's a huge swing |
| 569 | 0 | Neutral | I'm actually surprised it's not a little bit more because I don't think that whilst investors probably heard exactly what they hoped to hear, but I think in general, Tesla communicated clearly what they're going to do |
| 570 | 0 | Neutral | So now it's just a matter of, I guess getting through that period of time |
| 571 | 0 | Neutral | So outside of that, obviously, that was the majority of the call |
| 572 | -1 | Negative | I was getting a little bit frustrated at the end |
| 573 | -1 | Negative | I saw a couple comments here saying it looks bad or something |
| 574 | 0 | Neutral | This isn't my normal setup, obviously, so I think part of that is lighting and that's just sort of my demeanor, or not my demeanor, but just kind of how I look, but I'm not sad, just to be clear on that |
| 575 | 0 | Neutral | But just going back through here and we'll see kind of if there's any major comments to call out here |
| 576 | 0 | Neutral | So this is kind of like opening comments from Elon delivery event for Cybertruck potentially towards the end of end of Q Three |
| 577 | 0 | Neutral | So obviously that could change |
| 578 | 0 | Neutral | They still got a lot of work to do before that point, but that's really exciting to hear that reiterated |
| 579 | 0 | Neutral | I think people probably just kind of assume that that'll be a little bit delayed and moved into Q Four, maybe even Q One next year |
| 580 | +2 | Strong Positive | But for Elon to continue to say it's looking good for Q Three, that's super exciting |
| 581 | 0 | Neutral | On the Cyber truck, obviously storage we already talked about in the shareholder recap, so flip over to that if you didn't have a chance to watch that video |
| 582 | 0 | Neutral | We go through all the financials and all the good stuff that we heard from the earnings report or all the information we learned from the earnings report |
| 583 | 0 | Neutral | Zach's comments really talking about things that we kind of know about some materials, cost improvements starting to hit, but not a huge driver this quarter |
| 584 | -1 | Negative | Hopefully that improves in Q Two |
| 585 | 0 | Neutral | But it really sounded like from his comments it's going to be the second quarter or the second half of the year |
| 586 | 0 | Neutral | So again, when we think about the cost changes that Tesla has had this quarter so far, we probably need to be expecting relatively low margins here in the second quarter, probably another sequential decline even with |
| 587 | 0 | Neutral | Continued improvements on costs from Berlin, ramping, austin ramping, improvements on 46 80s, sort of all the stuff there that we've talked about |
| 588 | 0 | Neutral | All right, so process on pricing adjustments, nothing too new there |
| 589 | 0 | Neutral | Will energy be bigger than auto? Total gigawatt hours deployed for energy might be bigger |
| 590 | 0 | Neutral | Kind of interesting because I believe at battery day, tesla had talked about two terawatt hours for automotive and one terawatt hour for energy |
| 591 | 0 | Neutral | So, I mean, that obviously gives us information on revenue |
| 592 | 0 | Neutral | Which business is going to be bigger, it'd be automotive in that case |
| 593 | 0 | Neutral | But it sounds like this is a little bit different than maybe what they had said there with potentially an even higher outlook for energy storage than what we had previously heard |
| 594 | 0 | Neutral | Obviously the opposite, there would be a lower outlook for automotive, but I don't think that is really the case |
| 595 | 0 | Neutral | So guidance for margins, they will provide some margin guidance on energy storage, and we got a little bit of that today saying that over the longer term, they're targeting that mid 20% range |
| 596 | -1 | Negative | So hopefully that helps pull back in expectations a little bit |
| 597 | 0 | Neutral | Obviously there's been a lot of excitement on Twitter about what energy storage margins can be |
| 598 | -1 | Negative | I think I've talked quite a few times on tempering those expectations |
| 599 | 0 | Neutral | So hopefully in this audience, there's nothing too crazy out there |
| 600 | 0 | Neutral | Obviously that should be aided a little bit by the inflation reduction act battery production credits |
| 601 | 0 | Neutral | Unfortunately we didn't get any questions on that, like how that's being reflected, how impactful that was this quarter, at least that I recall |
| 602 | -1 | Negative | So that would have been nice to hear about |
| 603 | 0 | Neutral | But hey, ask about pricing for the fifth time, battery day |
| 604 | 0 | Neutral | So Drew said a lot of stuff |
| 605 | 0 | Neutral | I wasn't able to catch it |
| 606 | 0 | Neutral | He clearly had some prepared remarks on that, and sadly I'm just not fast enough at typing all that stuff out, so we're just going to have to come back to that |
| 607 | 0 | Neutral | But in general, sounds like they're continuing to make pretty good progress on 46 80s, which no surprise given that we had the 46 80 model Y added back to the design studio production in Texas |
| 608 | +2 | Strong Positive | I believe this was for 46 80, increased 50% |
| 609 | +1 | Positive | Quarter over quarter should be still at a pretty low base, but obviously that's a really strong quarter over quarter number |
| 610 | 0 | Neutral | Probably annualizes, like, what, I don't know, 3400% increase year over year after that |
| 611 | 0 | Neutral | Compounds have to do the math on that |
| 612 | 0 | Neutral | But big growth |
| 613 | 0 | Neutral | How do we anticipate 2023 auto gross margin x credits will be? So yeah, just difficult to know |
| 614 | +1 | Positive | Logistics moving in their favor |
| 615 | -1 | Negative | Commodities have been a huge pain point |
| 616 | 0 | Neutral | Again, reiterating still at max pain pretty much, but starting to see that come down |
| 617 | +1 | Positive | They talked about locking in new contracts for lithium as the spot prices have gone down significantly |
| 618 | 0 | Neutral | So feel like it's a good time to sort of renegotiate and lock in those longer term contracts for the the middle and perhaps later part of the although maybe periods of time like this are a little bit painful |
| 619 | 0 | Neutral | It does provide opportunities that realize get realized over time, which again, long term perspective |
| 620 | 0 | Neutral | I think a lot of us understand that, but sadly, it's just not always perceived in that way |
| 621 | 0 | Neutral | So the ramp up two phases for the Lathrop factory, and Drew said that the second phase of the capex would come online towards end of this year |
| 622 | 0 | Neutral | So I wasn't sure if that meant spending in terms of that capex or if that meant the capex that is being spent would come online towards the end of this year |
| 623 | 0 | Neutral | I'm hoping the latter because I think based on where they're at in the ramp already, that would sort of be the timing that makes sense |
| 624 | 0 | Neutral | So we'll see on that |
| 625 | 0 | Neutral | But good to have some commentary on how that ramp might look |
| 626 | 0 | Neutral | So, going to expand to new markets |
| 627 | 0 | Neutral | We've already seen some of that happen, I think most recently with Turkey |
| 628 | 0 | Neutral | So Tesla will continue to do that, FSD take rates |
| 629 | 0 | Neutral | Didn't want to answer that, but again, this is where it started to get into just talking about autonomy and how that's going to add revenue to these vehicles and they can sell them for zero profit if they need to |
| 630 | 0 | Neutral | Which Elon had already previously said that on a Twitter space, I think, back in December |
| 631 | 0 | Neutral | So maybe it's new for people that only listen to the earnings calls, but Elon's philosophy on that has been clear for a while |
| 632 | -1 | Negative | So that's why I was again a little bit frustrated why this question keeps getting asked |
| 633 | 0 | Neutral | Because Tesla has said many, many times what their strategy is, including on the call, robotaxi stuff, margin stuff, dojo, multi hundred billion dollar level business |
| 634 | 0 | Neutral | Okay, I don't know that we kind of expected it to maybe have that sort of a potential |
| 635 | 0 | Neutral | We've talked about the AWS sort of potential there for Dojo potentially moving into that type of a service for Dojo with AI training |
| 636 | -1 | Negative | But obviously Tesla still seems like they've got a decent chunk of a ways to go on Dojo, and Elon still viewing it as a little bit of a long shot of a bet |
| 637 | 0 | Neutral | But he was a little bit more positive, I think, or has been a little bit more positive on Dojo in recent months |
| 638 | 0 | Neutral | I think there was maybe on the Q Three call or something |
| 639 | 0 | Neutral | He kind of seemed like it was almost being written off at that point, but seems to progress a little bit since then, at least in terms of the commentary |
| 640 | 0 | Neutral | Heat pumps, pricing |
| 641 | 0 | Neutral | Again, we get orders |
| 642 | 0 | Neutral | Obviously this can lead into a whole conversation on if Tesla should be doing other things other than the pricing adjustments to try and increase those order rates |
| 643 | 0 | Neutral | As Elon really saying, pricing is a function of the order rates |
| 644 | 0 | Neutral | So if that's the case, there are other things that can be done to help those order rates other than just pricing |
| 645 | 0 | Neutral | So obviously, that can be another conversation for another time |
| 646 | 0 | Neutral | Cost structure? Stationary storage 2 million |
| 647 | -1 | Negative | Nothing really too new in there |
| 648 | +1 | Positive | The analyst questions had been getting a little bit better |
| 649 | -2 | Strong Negative | But I gotta say, I'm super disappointed this time around |
| 650 | 0 | Neutral | I mean, come on |
| 651 | -1 | Negative | So, unfortunately, we just didn't quite get enough or we didn't quite get the information, I think, that we could have gotten from this call |
| 652 | 0 | Neutral | That's probably the extent of it |
| 653 | -1 | Negative | So just not a lot of learnings |
| 654 | -2 | Strong Negative | But I guess what we learned is that Tesla is going to continue to just keep cutting prices as much as they feel like they need to to drive those orders to clear their production |
| 655 | 0 | Neutral | So I guess we'll kind of wrap it up there |
| 656 | 0 | Neutral | I'll just take a quick look and see if people had some questions here |
| 657 | 0 | Neutral | So I'm seeing one here |
| 658 | 0 | Neutral | That is good |
| 659 | 0 | Neutral | If FSD is repeatedly promoted as a revenue stream, do I feel it's fair to investors to not provide take rates? So I actually do think it's fine because we can work in the math, right? It's not some huge range where we're not sure if it's, like, 80% or, like, 10% |
| 660 | 0 | Neutral | It's obviously much closer to that 10% range just based off of margins and average selling prices |
| 661 | 0 | Neutral | So we don't have to worry too much about what the exact take rate is |
| 662 | 0 | Neutral | I don't care if it's 10% or 20% necessarily |
| 663 | 0 | Neutral | It doesn't really affect anything |
| 664 | 0 | Neutral | It's very clear that FSD as a product is still something that needs to be developed to unlock the full value of it |
| 665 | 0 | Neutral | So once that value is unlocked, then obviously the take rate is going to increase |
| 666 | 0 | Neutral | So the take rate today doesn't matter |
| 667 | 0 | Neutral | And I think that's why Tesla just says it's almost like why are you even asking? Right? It's a question that if you're asking it, you're probably not thinking about it in the correct way or in the way that at least Tesla is thinking about it now |
| 668 | 0 | Neutral | Obviously it'd be nice to know and it, like, easier to model stuff, but I don't think it's really that important |
| 669 | 0 | Neutral | What's important is, can tesla actually make the progress on it that they want to, and think that they can make that's much more of an important question? Just looking through chat again to see if there are other questions |
| 670 | 0 | Neutral | So, in general, I mean, I shared a lot of my thoughts before in the Shareholder and Earnings Letter |
| 671 | 0 | Neutral | I'll just kind of reiterate a couple of key points |
| 672 | 0 | Neutral | I think |
| 673 | +2 | Strong Positive | Obviously really good progress on the energy storage business |
| 674 | +2 | Strong Positive | Excited to see that tremendous progress sequentially and year over year |
| 675 | 0 | Neutral | I think they were maybe up, like, what, 50% or something sequentially, perhaps even a little bit higher than that |
| 676 | +2 | Strong Positive | And up 360%, year over year |
| 677 | +1 | Positive | That's Phenomenal |
| 678 | +1 | Positive | So a lot of things to be excited about there |
| 679 | 0 | Neutral | With the energy business |
| 680 | 0 | Neutral | Obviously, the big concern, though, is going to be on automotive margins, as we had talked about |
| 681 | 0 | Neutral | So I think the number of questions asked on that make it clear what people are worried about |
| 682 | -1 | Negative | And I don't think Tesla gave much reassurance on that |
| 683 | 0 | Neutral | So I'm not expecting this to be a super fun quarter for the stock pending what else happens? Okay, well, I suppose we can wrap it up, then |
| 684 | 0 | Neutral | So thanks to everyone that tuned in |
| 685 | 0 | Neutral | I definitely appreciate you joining |
| 686 | 0 | Neutral | As we can see, there the stock |
| 687 | 0 | Neutral | Yeah |
| 688 | -2 | Strong Negative | Continuing to fall |
| 689 | 0 | Neutral | So again, I don't think it's super surprising based on what we heard on the call |
| 690 | -1 | Negative | It's not what Wall Street wants to hear |
| 691 | 0 | Neutral | Whether that's everyone left to make their own decision on that |
| 692 | 0 | Neutral | If you've got a long term view, it's not super important |
| 693 | 0 | Neutral | And Tesla does |
| 694 | -1 | Negative | But that being said, as tesla goes through this period, there's not going to be super high confidence in the business returning to the profitability that it once had until we see things change |
| 695 | 0 | Neutral | Right |
| 696 | 0 | Neutral | So just kind of is what it is for now |
| 697 | 0 | Neutral | I know that's not, like, the most exciting thing, but just kind of where we're at |
| 698 | 0 | Neutral | I know |
| 699 | 0 | Neutral | I said I was going to wrap it up |
| 700 | 0 | Neutral | I just want to make sure that no other thoughts come to me in the meantime |
| 701 | 0 | Neutral | Yeah |
| 702 | -2 | Strong Negative | I mean, I feel like there's going to be comments that I'm super disappointed in this |
| 703 | 0 | Neutral | And I think that's, again, just, like, part of how I look |
| 704 | -1 | Negative | But actually, I'm actually not really that disappointed in this |
| 705 | 0 | Neutral | I think this is, like, obviously turned into some huge, controversial thing in the Tesla world, like whether or not Tesla should be doing advertising |
| 706 | 0 | Neutral | And it's actually shocking that that no analysts ask about this, because it's, like, literally a key point in all of their questions that they're asking |
| 707 | 0 | Neutral | Like, why are you not asking at all about if there are other things Tesla can be doing to help generate demand? Since that's the focus of all your questions? So super weird that that was not a part of it |
| 708 | 0 | Neutral | But I think it's a fair question to be asking |
| 709 | -1 | Negative | I think Tesla is talking about having this amazing data, but has not taken the opportunity to even try this out |
| 710 | 0 | Neutral | I don't think anyone that is in favor of advertising is saying, like, hey, you need to be doing advertisements like Ford does, where it's just like a truck driving around |
| 711 | -1 | Negative | That's not what people are asking for |
| 712 | 0 | Neutral | I think people are looking for something that tells people, like, hey, this is actually what the price of a Tesla is |
| 713 | 0 | Neutral | Because you probably didn't know this |
| 714 | +2 | Strong Positive | There's the $7,500 tax credit |
| 715 | 0 | Neutral | You probably didn't know this |
| 716 | +2 | Strong Positive | You can save $1,000 a year in gas |
| 717 | 0 | Neutral | You probably didn't know this |
| 718 | 0 | Neutral | There's thousands of charging stations |
| 719 | 0 | Neutral | There's probably one within, like, 50 miles of you, if not closer |
| 720 | 0 | Neutral | So I Think That's What People Are Asking For, and I Think That Kind of makes sense, but at the same time, on the other end of the argument, it is, I think I don't know if like, noble or that's not really the right word |
| 721 | 0 | Neutral | I can't really think of the right word, but there is something to be said for being so focused on getting affordability as attainable as possible |
| 722 | 0 | Neutral | And obviously, although advertising costs don't add to cost of production, it's a cost of the business |
| 723 | 0 | Neutral | So I think there is something to be said about that |
| 724 | 0 | Neutral | And obviously there's a little bit of cachet that comes with not having ever advertised |
| 725 | 0 | Neutral | So I don't know |
| 726 | 0 | Neutral | I didn't mean to start down this path, but we'll talk more about that in future days because that's going to continue to rage as a conversation, especially with just the commentary that I think was shared on the call today |
| 727 | 0 | Neutral | So that is where we're wrap it up for today |
| 728 | 0 | Neutral | As always, thank you for listening |
| 729 | 0 | Neutral | Make sure you subscribe and sign up for notifications |
| 730 | 0 | Neutral | You can also find me on Twitter at tesla podcast and we'll see you tomorrow for the Thursday, April 20 episode of Tesla Daily |
| 731 | 0 | Neutral | Hopefully we see a starship launch as well |
| 732 | 0 | Neutral | Everyone make sure to check that out if the launch does happen tomorrow, so we'll see on that |
| 733 | 0 | Neutral | But until then, hope everyone has an enjoyable, evening |
| 734 | 0 | Neutral |
