Replace: 4/23/24 6:45 PM: The decision has ended, and the toplines are that Tesla is (within the minds of its management) absolutely an AI and robotics firm — the automobiles are simply means to a robotaxi finish. “If somebody doesn’t suppose Tesla’s gonna clear up autonomy,” Musk himself mentioned, “I don’t suppose they need to be an investor within the firm.” The $25,000 automobile is possibly coming, although it’ll come after a collection of efficiencies to be present in current manufacturing traces, and Musk mentioned that he’s actually not all that important to Tesla attaining its targets. With that, it’s been a pleasure posting for you all, and I’m off for the night time.
Tesla’s first-quarter earnings name for 2024 is tonight, and it’s shaping up to be a tough one. The inventory is nosediving, and buyers desperately need Elon Musk to proper the ship — and, in doing so, restore their confidence within the firm’s continued skill to generate returns.
Traders are involved with revenue margins, supply figures, and the ever-present rumor of the entry-level mannequin’s cancellation. Tesla has already put out the foremost announcement of the Mannequin 3 Efficiency at present, which doesn’t bode properly for the earnings name itself — what’s the corporate hiding behind all that media flash?
Whereas the Mannequin 3 announcement seems to have righted Tesla’s inventory value in the intervening time — although it could merely be buying and selling flat on market uncertainty main into the upcoming name — analysts seem torn on the corporate’s trajectory. Nasdaq quotes 12-month value targets from analysts as starting from $310/share all the best way down to only $22.86. Functionally, primarily based on a present value of $144.92, that’s a double or nothing guess. General, estimates level to a slight rise over the subsequent 12 months.
As extra opponents enter the EV area — and accomplish that with higher and higher automobiles — Tesla is hitting a watershed second. Demand for EVs could enhance, notably as ICE engines are phased out and regulatory buildings encourage the shift to electrification, however demand for Teslas could not. Will the corporate preserve its dominance within the EV market, or will extra conventional automakers win out?
We’ll be tuning in to Tesla’s investor name at 5:30 PM Japanese, and reside reacting right here to all of the statements, questions, and investor issues. Will Musk clarify away the corporate’s points sufficiently, or will shares proceed to tumble when the market bell rings tomorrow morning? Let’s discover out collectively.
Replace: 4/23/24 5:35 PM: We’re reside! Pull up a chair and your slide deck, let’s get this factor began. We’re starting with opening marks from Elon Musk, beginning by speaking in regards to the $25,000 entry-level automobile, which he claims will probably be constructed on the identical manufacturing traces as the prevailing fashions.
Replace: 4/23/24 5:39 PM: Musk is speaking up the newest semi-autonomous software program, and doubling down on his dedication to robotaxis and a pc vision-only method. People can drive with only a pair of eyes, nevertheless it’s not fairly the identical for automobiles. Possibly if you wish to give them a number of million years of evolution, they may determine it out.
Replace: 4/23/24 5:41 PM: Automobile margins are down, and one mitigating measure being proposed is a discount in prices for FSD — making it cheaper to purchase and use. Tesla continues to be banking arduous on software program superiority, maybe as a consequence of realizing how tough {hardware} superiority actually is, however Tesla’s software program isn’t meaningfully higher than the competitors. It bites off extra, certain, however can it chew it?
Replace: 4/23/24 5:42 PM: The corporate is trying into efficiencies in capex, making higher use of cash that’s already been spent on actual objects. These financial savings, apparently, will probably be reinvested into AI. Once more with that precedence.
Replace: 4/23/24 5:42 PM: Manufacturing of 4680 cells is outwardly ramping up, with the hope of at all times outpacing Cybertruck manufacturing. Given how the previous couple of months have gone for the Cybertruck, that ramp could also be very, very shallow.
Replace: 4/23/24 5:42 PM: Musk is speaking Optimus now, anticipating gross sales by the top of subsequent 12 months. He thinks it may be greater than your complete automobile enterprise, and doesn’t see a most dimension for that market. For these of you who didn’t main in enterprise, meaning he sees no restrict on the sum of money that individuals will probably be keen to spend on robots. Yep. No most quantity in any respect.
Replace: 4/23/24 5:45 PM: Musk: “Different autonomous automobile firms have been reducing a path via the regulatory jungle … that’s truly fairly useful.” Wild what occurs whenever you collaborate with regulators slightly than thumbing your nostril at them.
Replace: 4/23/24 5:47 PM: Musk thinks that there received’t be significant regulatory boundaries to AV adoption, supplied knowledge comes out proving they’re safer than human drivers. Wake me up when that knowledge comes out.
Replace: 4/23/24 5:50 PM: The previous pitch of owner-run robotaxis is again. The fleet will probably be managed by Tesla, however house owners will be capable to “lease out” their automobile, with controls over who will get to entry it. Musk refers to machine studying on an ever-increasing fleet as a “flywheel,” that retains shifting by itself momentum, and he makes use of Google Search as one other instance. Not the monopoly, or something, however the flywheel.
Replace: 4/23/24 5:52 PM: Musk desires to make use of your complete fleet — “tons of of hundreds of thousands,” in his thoughts — as a large distributed laptop community. Keep in mind SETI@house? I keep in mind SETI@house. Was it overwhelmingly fashionable? Do folks need different entities utilizing their computer systems for unknown functions? I overlook.
Replace: 4/23/24 5:55 PM: Musk is speaking about inner variations of FSD, which he claims are far forward of the model that’s presently out there to shoppers. These variations apparently can’t be launched as a consequence of their very own quirks, nevertheless it appears the corporate is much more “transfer quick and break issues” internally than it’s to the surface world.
Replace: 4/23/24 5:57 PM: Traders requested for a agency timeline on the entry—stage $25,000 automobile, however the people at Tesla appear reluctant to offer arduous numbers. Rather more dialogue of capex optimizations to introduce new fashions at decrease prices, however not a lot dialogue of when that can occur.
Replace: 4/23/24 5:57 PM: Tesla is now producing 1,000 Cybertrucks monthly, however the focus continues to be on value effectivity. There’s a quick point out of “provider points,” although it’s unclear what that is perhaps.
Replace: 4/23/24 5:58 PM: When requested about different automakers licensing FSD, Musk replied that Tesla is in talks with one different automaker to make use of the FSD software program. Didn’t say who.
Replace: 4/23/24 5:59 PM: The Semi fleet over at Pepsi will probably be expanded “marginally” this 12 months, and the learnings from that fleet will probably be pushed into future vehicles. The Reno manufacturing unit is in progress, however no dialogue about when extra vehicles will roll off the meeting line.
Replace: 4/23/24 6:00 PM: Analyst query time.
Replace: 4/23/24 6:01 PM: First query is about “new fashions,” and whether or not or not they’re truly new. The analyst makes point out of the Mannequin 3 Highland replace, and all of the work and retooling that the facelift took — if future automobiles are to roll off the identical traces, how completely different can they be? Musk didn’t reply.
Replace: 4/23/24 6:01 PM: Second analyst query is about Musk’s private focus, given all the businesses he runs. Musk claims Tesla is almost all of his focus, and he nonetheless desires it to be affluent.
Replace: 4/23/24 6:01 PM: The following query is about 2024 progress, to which Musk basically replied “Sure” — he thinks Tesla will promote extra automobiles this 12 months than final.
Replace: 4/23/24 6:04 PM: Subsequent query is about Chinese language opponents, and the way lengthy it might take one to match Tesla’s automotive {hardware}. Musk replied that Tesla’s gross sales drop in China was lower than that of the Chinese language opponents, and that Tesla is basically an AI firm — not a carmaker. He says that’s the flawed framework to use. “If somebody doesn’t suppose Tesla’s gonna clear up autonomy, I don’t suppose they need to be an investor within the firm.”
Replace: 4/23/24 6:04 PM: Musk claims that FSD V12.3 is important to understanding the corporate. Robotaxis are important to the corporate, Optimus is important to the corporate, and automobiles are extra of a way to that finish.
Replace: 4/23/24 6:08 PM: Analysts are asking about Musk’s aim to get “25% voting management” of the corporate, and whether or not he has a plan to make that occur. Musk responds that he isn’t important to the corporate fixing autonomy — if he had been “kidnapped by aliens,” it might nonetheless occur — simply that he’s the important thing to it occurring extra rapidly. That is an odd method to take when analysts are involved about his lack of focus, to straight inform them that the corporate can obtain its targets with out him. It’s a daring transfer, Cotton. If something, his plan is share buybacks, by the best way.
Replace: 4/23/24 6:10 PM: Who’s Tesla firing, and what does the corporate danger with out them? Very fascinating query, and the response is that the corporate is reducing in all places. “Any tree which grows, it wants pruning.” The angle is that the corporate is error-correcting for dangerous hires up to now, which is a really fascinating method to have a look at your workers. An worker is Good or Dangerous, and that standing by no means adjustments.
Replace: 4/23/24 6:13 PM: One other analyst desires to learn about FSD licensing, and the way that’s progressing. “I feel it must be apparent that our method is the best method” is Musk’s response. It’s not apparent that Tesla’s vision-only, no-LIDAR method is the best method. “As soon as it turns into apparent that, in the event you don’t have this in your automobile, nobody desires your automobile” is an fascinating assertion to say a couple of characteristic that customers emphatically don’t belief.
Replace: 4/23/24 6:15 PM: Musk thinks it’s potential that Tesla indicators an FSD licensing deal this 12 months, “possibly a couple of.” He doesn’t suppose the characteristic will truly present up on non-Teslas for 3 years, given the work that different OEMs might want to do to their very own autos for implementation.
Replace: 4/23/24 6:18 PM: Can Tesla preserve reducing costs and keep worthwhile? Musk stammered within the affirmative, and it sounds just like the angle from the corporate at giant is to compensate for revenue margins with quantity. It’s the “elementary affordability query,” guaranteeing that people who find themselves “dwelling paycheck-to-paycheck” can afford Tesla automobiles. So, the place’s that $25,000 mannequin? The place’s the $35,000 Mannequin 3?
Replace: 4/23/24 6:20 PM: Subsequent query is about increasing the geofence of FSD, opening it as much as new markets like China. Musk says that FSD works properly no matter market, and that it’s as much as regulatory approval to determine the place the software program can be utilized. He compares the automobile to the common driver taking a trip, which isn’t a heartening assertion to anybody who’s vacationed in Rome. I haven’t, however I hear the visitors is wild.
Replace: 4/23/24 6:23 PM: “We expect Q2 will probably be loads higher,” says Musk. He talks in regards to the logistics of bodily shifting automobiles round, from markets the place they’re made to markets the place they’re wished. He desires the acquisition course of for a Tesla to take “lower than a minute.”
Replace: 4/23/24 6:24 PM: Robotaxis are estimated for use for round a 3rd of the automobile’s time. It nonetheless must cost, be utilized by the proprietor, and – crucially – be cleaned and maintained. If the automobiles are privately owned, who’s on the hook for the prices of cleansing and upkeep? Who pays for charging? These questions will all need to be answered earlier than people will volunteer their non-public automobiles for the fleet.
Replace: 4/23/24 6:27 PM: The staff is speaking once more about compute capability, and the way Tesla will preserve entry to the computer systems in each automobile for use for different duties. If this confuses you, take into consideration the episode of Silicon Valley the place they made a future web run on each good fridge. It’s that, plus some cash for house owners.
Replace: 4/23/24 6:28 PM: One other 4680 ramp query, one other reply tying it to the Cybertruck. When this cell was launched, it was going to chop prices and enhance capability throughout Tesla’s lineup. Now, up to now, it’s all in regards to the truck.
Replace: 4/23/24 6:30 PM: An analyst was given the ultimate query, however couldn’t unmute their mic. Occurs to the perfect of us on Zoom conferences.
Replace: 4/23/24 6:33 PM: The now-final query is about manufacturing efficiencies, and the way they’ll have an effect on future fashions. Tesla claims the concept is to include each helpful studying throughout the lineup, and to hold each effectivity it could possibly discover into the longer term. A followup asks about potential 4680 gross sales to different automakers, to which Musk responded that the market doesn’t actually appear to have the demand in the meanwhile — established opponents have extra capability already, so including one other entrant to the market would solely drive costs down. Musk in contrast the battery market to a “increase and bust,” talked about the shifting regulatory panorama round battery manufacturing, after which moved on to creating enjoyable of the acronym for the Inflation Discount Act. I promise, my man, there are higher causes to make enjoyable of that invoice than its title.
Replace: 4/23/24 6:37 PM: Lastly, Martin Viecha, Tesla’s head of investor relations, is leaving the corporate after seven years. He’s sticking round for a number of extra months, however mentioned he’ll be becoming a member of the subsequent name as an investor slightly than a consultant of the corporate.
