Tesla’s Autonomous Ambitions
업데이트됨
Musk’s Vision vs. Reality: Tesla’s Path to Revolutionizing Transportation
Tesla recently experienced its best trading day since 2013, with the stock soaring 23% following the release of its Q3 earnings report. While the financial results were solid, investors are largely drawn to Elon Musk’s ambitious vision for autonomy a vision that presents significant challenges but holds substantial potential
Tesla’s rebound in deliveries, higher profit margins, and an unexpected forecast projecting 20% to 30% sales growth for next year reinvigorated investor confidence after a somewhat muted response to the October 10th 'We, Robot' event
The event showcased new products like the highly anticipated Cybercab (robotaxi) and Optimus (a humanoid robot) Despite the excitement, the presentation lacked detailed information, causing Tesla’s stock to decline by nearly 10% the following day
Despite being over 20 years old, the investment appeal of Tesla is still driven more by its future potential than its current state. Musk envisions mass-producing autonomous vehicles and robots, aspiring to make Tesla the largest company globally. Traditional valuation models based on recent performance can’t fully capture this long term vision
Tesla’s journey can’t be understood in isolation
Just three days after the 'We, Robot' event, SpaceX successfully launched its Starship spacecraft for the fifth time. The SpaceX “chopsticks” system successfully caught the Super Heavy booster after liftoff a crucial step toward making the booster completely reusable. This breakthrough could transform space travel by significantly reducing turnaround times and reshaping cost structures.
Elon Musk, at the helm of both Tesla and SpaceX, has a talent for transforming bold ideas into reality. SpaceX’s success in making rockets reusable has drastically reduced the cost of space travel, demonstrating that affordability can drive broader adoption.
This strategy mirrors Tesla’s vision for autonomous vehicles: by creating self-driving cars like the Cybercab, Tesla aims to reshape transportation with similar cost-efficiency principles. However, as with any disruptive technology, the range of possible outcomes is vast.
A balanced perspective considers Musk’s track record while acknowledging that his timelines can often be highly optimistic.
In 2021, Benedict Evans described Musk as “a bullshitter who delivers.” Whether Tesla’s vision for full autonomy will come to fruition remains uncertain, and fully autonomous fleets could still be years away. Nonetheless, Musk’s accomplishments with SpaceX add weight to Tesla’s ambitions, granting him credibility in the eyes of many.
The question remains: Will Musk’s ambitious autonomy vision fully take shape?
Today’s highlights:
- Tesla Q3 FY24 Results
- Key takeaways from the 'We, Robot' event
- Notable quotes from the earnings call
- Insights on Waymo, Uber, and the future of ridesharing
Tesla Q3 FY24 Overview
Tesla’s revenue is primarily generated from three segments
1. Automotive (80% of revenue): This includes the sale of electric vehicles, such as models S, 3, X, Y, and the Cybertruck.
2. Services and Other (11% of revenue): This segment encompasses vehicle services, the Supercharger network, and sales of automotive parts and accessories.
3.Energy Generation and Storage (9% of revenue): Revenue from solar products and energy storage solutions like the Solar Roof and Powerwall.
Key Metrics for Q3 FY24:
-Production: 470,000 vehicles produced (+9% YoY, +14% QoQ).
-Deliveries: 463,000 vehicles delivered (+6% YoY, +4% QoQ), which was slightly below analysts’ expectations of 464,000 and fell short of the Q4 2023 record of 484,000 deliveries. Despite price cuts over the last two years, Tesla’s auto sales growth has leveled off.
Financial Highlights:
-Revenue: $25.2 billion, an 8% YoY increase but fell short of expectations by $0.5 billion.
-Gross Margin: 20% (+2 percentage points QoQ and YoY).
-Operating Margin: 11% (+5 percentage points QoQ, +3 percentage points YoY).
-Adjusted EPS: $0.72, beating estimates by $0.12.
Gross Margin Insights:
-Automotive Gross Margin: 17% (excluding regulatory credits), up from 15% in Q2 and 16% a year earlier. The cost per vehicle dropped to an all-time low of $35,100. Notably, the Cybertruck achieved a positive gross margin for the first time. The automotive segment included $326 million in software revenue.
-Services and Other Gross Margin: Reached 9%, marking the 10th consecutive quarter of positive margins and a new record high.
-Energy Generation and Storage Gross Margin: The highest margin segment at 31%, also hitting a record high.
Overall, while Tesla faced some delivery shortfalls and plateauing auto sales, it managed to improve profitability across its segments, with key milestones in cost reductions and positive trends in gross margins.
Tesla’s Margins and Cash Flow Performance
Tesla’s industry-leading margins are driven by three major advantages:
1.Economies of Scale: Achieved through its expansive gigafactories.
2.Direct-to-Consumer Sales**: Tesla sells directly online and through its showrooms, bypassing traditional dealership networks.
3.Low Marketing Costs: Tesla spends very little on advertising compared to traditional automakers.
While Tesla expects its margins to expand over time due to growth in its non-automotive segments and software sales, its automotive margins have been pressured by price cuts in the last two years to sustain demand.
Cash Flow Highlights:
-Operating Cash Flow**: Increased by 89%, reaching $6.3 billion
-Free Cash Flow**: Jumped by 223%, hitting $2.7 billion
These cash flow figures stood out in the quarterly report, demonstrating Tesla’s ability to fund its ambitious plans for autonomy despite heavy investments in AI.
Guidance
1.FY24 Improvement: Tesla now expects slight growth in vehicle deliveries for FY24 (previous guidance indicated “notably lower” growth), implying a record-setting Q4 to make up for a weaker first half. Energy storage deployment is projected to more than double.
2.FY25 Outlook Surprise: During the earnings call, Musk forecasted 20% to 30% delivery growth in FY25, surpassing market expectations. A new, more affordable model is anticipated to launch in the first half of FY25, potentially easing investor concerns about competition.
3.New Product Strategy: The upcoming affordable vehicles in 2025 will be based on Tesla’s existing platform, indicating less dramatic cost reductions than previously suggested. However, the Robotaxi will bring a fresh manufacturing strategy.
Key Takeaways
1.Volumes Rebounded: After a 7% decline in deliveries during the first half of 2024, volumes recovered in Q3. Prices have stabilized, and Tesla’s focus on reducing unit costs contributed to improved automotive gross margins. Management’s priorities remain on unit volume and maintaining low inventory levels.
2.More than Just EVs: Non-automotive segments, such as Energy and Services, accounted for 20% of Tesla’s revenue this quarter, up from 16% a year ago. Likewise, these segments contributed about 20% of Tesla’s gross margin, nearly double from the previous year. As these segments grow, their impact on Tesla’s profitability will become increasingly significant.
3.Operating Margin Gains: Improved by 3 percentage points year-over-year:
-Negative Impact: Price cuts, mainly due to financing incentives.
-Positive Impact**: Lower costs per vehicle, growth in non-auto segments, FSD revenue, increased deliveries, and higher regulatory credit revenue.
4.Free Cash Flow Surge: Doubled sequentially to $2.7 billion. Capital expenditures increased by 43% to $3.5 billion, largely driven by investments in AI infrastructure. Tesla plans to spend over $10 billion on AI this year.
5.Strong Balance Sheet: Tesla maintains a net cash position of nearly $30 billion, which management believes provides ample liquidity to support its product roadmap and sustain positive cash flow margins.
We, Robot’ Event Takeaways
Key insights from the recent announcements include:
- Cybercab (Robotaxi): Tesla introduced the much-awaited Cybercab, a sleek two-seater, but key technical details—such as sensor configurations and processing capabilities—were notably absent. Musk’s decision to forgo lidar technology, a feature commonly used by competitors like Waymo, could potentially raise regulatory concerns about safety and compliance.
1.Optimus (Humanoid Robot): While the Optimus robots were a hit at the event, performing tasks like serving drinks and dancing, this entertaining display overshadowed the reality of how far the technology is from practical use. Reports indicated that the robots were primarily operated by humans, raising questions about their actual autonomous capabilities and readiness for industrial applications.
2.Robovan: A surprise announcement was the debut of the Robovan, a versatile vehicle intended for both mass transit and cargo transport. Its stylish Art Deco-inspired design drew attention, but like the Cybercab, it lacked concrete details or technical insights to convince analysts that the product is close to entering production. The presentation didn’t provide enough information to quell investor skepticism about its feasibility.
3. Full Self-Driving (FSD) Progress: Elon Musk projected that Tesla’s FSD technology would achieve full autonomy by 2026, with the Cybercab and current models (like the Model 3 and Model Y) spearheading this effort in Texas and California. However, Musk’s history of ambitious FSD promises has been met with ongoing skepticism, and this presentation did little to change that. No new safety data or significant updates were provided to address reliability concerns, leaving regulatory and safety issues unresolved. Tesla still faces significant challenges in proving its FSD capabilities are ready for public use without human oversight and in obtaining regulatory approval at both federal and state levels.
4.Market Reaction: Analysts expressed mixed feelings about the event. While some found the futuristic concepts inspiring, others noted the lack of substantial progress and the vague nature of Musk’s promises. This left investors questioning how close Tesla truly is to achieving its autonomy and robotics goals. For many, the event leaned more towards spectacle than solid evidence of progress.
Shareholder Deck Updates
1.Supercharger Network: Tesla’s Supercharger Network received widespread industry support, with most automakers now adopting Tesla’s North American Charging Standard (NACS). This acceptance is likely to boost Tesla’s Services segment and improve its margins in the long term. The number of Supercharger stations increased by 20% year-over-year to 6,706. Tesla also rehired some of the nearly 500 Supercharger team members who had been laid off earlier in the year, indicating renewed focus on this segment.
2.Market Share: Tesla’s market share remained steady in North America and Europe on a sequential basis, but saw a noticeable improvement in China, signaling stronger competitiveness in the region.
These details paint a picture of a company with promising ambitions but facing significant challenges in bringing its bold visions to reality. Investors will be watching closely for concrete progress and clearer timelines moving forward.
Key Updates from the Earnings Call
Full Self-Driving (FSD) Progress
- Tesla has surpassed 2 billion miles driven using its FSD (supervised) technology, which forms a core part of the company’s data advantage. This milestone underpins Tesla’s long-term autonomy thesis. Additionally, Tesla launched **FSD version 12.5** and introduced the Actually Smart Summon feature, enabling vehicles to autonomously drive to their owners in parking lots.
AI Training Capacity
- Musk shared that Tesla expects to have **nearly 90,000 H100 clusters dedicated to AI training** by the end of the year, enhancing the company’s machine learning capabilities.
Energy Storage Deployments
- Tesla deployed **6.9 GWh of energy storage** in Q3, although this fell short of the record 9.4 GWh achieved in Q2. The 40 GWh Megafactory in Lathrop is ramping up production, reaching 200 Megapacks in a single week. The **Shanghai Megafactory** is set to start shipping Megapacks in Q1 2025 with a run rate of 20 GWh. Tesla noted that energy deployments are inherently lumpy due to factors such as customer readiness and geographic order locations.
Key Quotes from the Earnings Call
Elon on the Cybercab:
- “I do feel confident of Cybercab reaching volume production in ‘26. We’re aiming for at least 2 million units a year, maybe 4 million ultimately.”
Musk envisions the Cybercab becoming a global, high-volume autonomous vehicle service. However, achieving this scale requires overcoming two major challenges: delivering level 5 autonomy at a competitive cost and navigating regulatory approval across regions with varying laws, road conditions, and weather considerations.
- Musk also dismissed the notion of a regular low-cost model, stating, “I think having a regular $ 25,000 model* is pointless.” He emphasized focusing on the Cybercab as a generational leap forward.
Musk on FSD:
- “Our internal estimate is **Q2 of next year** to be safer than human and then to continue with rapid improvements thereafter.”
He expressed confidence that full autonomy could be achieved in 2025 with existing vehicle models, although regulatory hurdles and safety standards remain significant barriers.
On Tesla’s Ridesharing App
- Tesla is already testing a *ridesharing capability* in the Bay Area for employees, with safety drivers currently in place. Musk anticipates launching the service for the public in California and Texas next year, pending regulatory approval. He added, “**I’d be shocked if we don’t get approval next year**,” but acknowledged that regulatory timelines are out of Tesla’s control.
Musk on Optimus:
- “We’re the only company that really has all of the ingredients necessary to scale humanoid robots.” He believes that the *Optimus robot* could become the “most valuable product ever made,” owing to Tesla’s combined AI and manufacturing advantages. However, the product remains at an early development stage and will likely take years to fully commercialize.
On Tesla’s Valuation:
- Musk reiterated his bold prediction: “Tesla will become the most valuable company in the world and probably by a long shot” He argued that Tesla’s strategic focus on future advancements in energy, transport, robotics, and AI sets it apart from competitors who are only targeting short-term trends.
Waymo, Uber, and Rideshare Future
There are two distinct paths to achieving full autonomy
1.Waymo’s Approach: Waymo focuses on highly structured, geo-fenced environments with extensive pre-mapping and sensor-based systems like lidar to ensure safety.
2.Tesla’s Approach: Tesla aims to develop a generalized self-driving system that works with computer vision and AI, relying on its fleet’s extensive data advantage and scaling software improvements. However, Tesla’s reluctance to use lidar technology and regulatory challenges could hinder its timeline for achieving level 5 autonomy.
These differing strategies highlight the varied paths to delivering a future of autonomous transportation, with each approach facing unique technical and regulatory hurdles.
Levels of Autonomy
- Tesla's FSD (Supervised): Tesla’s Full Self-Driving system remains at **Level 2**, meaning it still requires driver supervision to operate. In contrast, **Waymo** operates at **Level 4** in certain cities, where its vehicles can drive without human intervention, albeit under specific conditions.
-Jumping Levels: Musk’s vision for the Cybercab aims to skip from Level 2 to **Level 5 autonomy**, which implies no need for human input at all—a huge leap.
Technology Approach
-Tesla’s Strategy: Tesla relies on a **camera and AI-only approach**, focusing on software and data scalability rather than expensive hardware. Musk’s bet is that advanced software can eventually solve all driving scenarios.
- Waymo’s Strategy: Waymo uses a **hardware-intensive model** with a combination of LiDAR, radar, and cameras**, providing highly precise navigation. However, the reliance on multiple sensors leads to higher production costs per vehicle, around **$200,000** each.
Scaling Challenges
-Waymo’s Limitation: The high cost of Waymo's vehicles has hindered its ability to scale quickly, while Tesla plans to leverage its extensive fleet data to improve its autonomous systems over time.
-Tesla’s Repeated Delays: Despite its aspirations, Tesla’s full autonomy timeline has faced numerous delays. Scaling quickly while achieving robust and safe autonomy remains a significant challenge for the company.
Safety and Regulation
-Waymo’s Approach: Waymo has built trust with regulators by deploying vehicles cautiously in select cities and prioritizing safety, but its operations remain limited geographically.
-Tesla’s Regulatory Hurdles: The Cybercab’s design lacks traditional controls like steering wheels and pedals, raising concerns about regulatory approval. These changes could face substantial scrutiny, particularly if safety standards require features Tesla’s design omits.
Tesla and Uber: Competitors or Partners?
-Potential Partnership: Uber CEO Dara Khosrowshahi found the Cybercab vision "pretty compelling" and didn’t dismiss the possibility of a collaboration. Uber already partners with Waymo to offer autonomous rides in cities like **Phoenix, Atlanta, and Austin**. Khosrowshahi’s openness to partnership means there’s potential for Tesla's Cybercab fleet owners to list their vehicles on Uber to boost earnings.
-Hybrid Model: By leveraging Uber’s vast network, Tesla could quickly gain scale in local markets, especially given Uber’s capability to serve diverse customer needs. This could lead to a hybrid model where Tesla’s autonomous vehicles are available on Uber alongside other options.
Regulatory Challenges: An Obstacle to Elon’s Vision ?
-Waymo’s Critique: Former Waymo CEO John Krafcik criticized the Cybercab, highlighting its impracticality for a large-scale robotaxi business. Waymo’s approach focuses on accessibility and safety with taller vehicles and high-mounted sensors, whereas Tesla’s design was light on crucial technical details.
-Possible Lidar Mandate: Krafcik also noted that if regulators eventually require LiDAR technology for safety compliance, Tesla’s camera-only approach could face a significant setback. Regulatory decisions are beyond Tesla’s control and could fundamentally reshape its autonomy strategy.
-Musk’s Political Maneuvering: Musk’s political activities and controversies could complicate Tesla’s regulatory relations. Building strong connections with regulators is critical, given their power to greenlight or halt the Cybercab’s deployment.
Final Thoughts
The coming years will be pivotal for Tesla as it strives to overcome both techno logical and regulatory challenges. The success of Tesla’s autonomy plans hinges not just on its technological progress but also on its ability to navigate complex and varied regulatory frameworks worldwide. Whether Musk’s bold vision for full autonomy becomes a realityor remains a distant dream will depend on a combination of innovative breakthroughs and the company’s capacity to gain and maintain regulatory approval.
Are you Moonish on Tesla or not?
Tesla recently experienced its best trading day since 2013, with the stock soaring 23% following the release of its Q3 earnings report. While the financial results were solid, investors are largely drawn to Elon Musk’s ambitious vision for autonomy a vision that presents significant challenges but holds substantial potential
Tesla’s rebound in deliveries, higher profit margins, and an unexpected forecast projecting 20% to 30% sales growth for next year reinvigorated investor confidence after a somewhat muted response to the October 10th 'We, Robot' event
The event showcased new products like the highly anticipated Cybercab (robotaxi) and Optimus (a humanoid robot) Despite the excitement, the presentation lacked detailed information, causing Tesla’s stock to decline by nearly 10% the following day
Despite being over 20 years old, the investment appeal of Tesla is still driven more by its future potential than its current state. Musk envisions mass-producing autonomous vehicles and robots, aspiring to make Tesla the largest company globally. Traditional valuation models based on recent performance can’t fully capture this long term vision
Tesla’s journey can’t be understood in isolation
Just three days after the 'We, Robot' event, SpaceX successfully launched its Starship spacecraft for the fifth time. The SpaceX “chopsticks” system successfully caught the Super Heavy booster after liftoff a crucial step toward making the booster completely reusable. This breakthrough could transform space travel by significantly reducing turnaround times and reshaping cost structures.
Elon Musk, at the helm of both Tesla and SpaceX, has a talent for transforming bold ideas into reality. SpaceX’s success in making rockets reusable has drastically reduced the cost of space travel, demonstrating that affordability can drive broader adoption.
This strategy mirrors Tesla’s vision for autonomous vehicles: by creating self-driving cars like the Cybercab, Tesla aims to reshape transportation with similar cost-efficiency principles. However, as with any disruptive technology, the range of possible outcomes is vast.
A balanced perspective considers Musk’s track record while acknowledging that his timelines can often be highly optimistic.
In 2021, Benedict Evans described Musk as “a bullshitter who delivers.” Whether Tesla’s vision for full autonomy will come to fruition remains uncertain, and fully autonomous fleets could still be years away. Nonetheless, Musk’s accomplishments with SpaceX add weight to Tesla’s ambitions, granting him credibility in the eyes of many.
The question remains: Will Musk’s ambitious autonomy vision fully take shape?
Today’s highlights:
- Tesla Q3 FY24 Results
- Key takeaways from the 'We, Robot' event
- Notable quotes from the earnings call
- Insights on Waymo, Uber, and the future of ridesharing
Tesla Q3 FY24 Overview
Tesla’s revenue is primarily generated from three segments
1. Automotive (80% of revenue): This includes the sale of electric vehicles, such as models S, 3, X, Y, and the Cybertruck.
2. Services and Other (11% of revenue): This segment encompasses vehicle services, the Supercharger network, and sales of automotive parts and accessories.
3.Energy Generation and Storage (9% of revenue): Revenue from solar products and energy storage solutions like the Solar Roof and Powerwall.
Key Metrics for Q3 FY24:
-Production: 470,000 vehicles produced (+9% YoY, +14% QoQ).
-Deliveries: 463,000 vehicles delivered (+6% YoY, +4% QoQ), which was slightly below analysts’ expectations of 464,000 and fell short of the Q4 2023 record of 484,000 deliveries. Despite price cuts over the last two years, Tesla’s auto sales growth has leveled off.
Financial Highlights:
-Revenue: $25.2 billion, an 8% YoY increase but fell short of expectations by $0.5 billion.
-Gross Margin: 20% (+2 percentage points QoQ and YoY).
-Operating Margin: 11% (+5 percentage points QoQ, +3 percentage points YoY).
-Adjusted EPS: $0.72, beating estimates by $0.12.
Gross Margin Insights:
-Automotive Gross Margin: 17% (excluding regulatory credits), up from 15% in Q2 and 16% a year earlier. The cost per vehicle dropped to an all-time low of $35,100. Notably, the Cybertruck achieved a positive gross margin for the first time. The automotive segment included $326 million in software revenue.
-Services and Other Gross Margin: Reached 9%, marking the 10th consecutive quarter of positive margins and a new record high.
-Energy Generation and Storage Gross Margin: The highest margin segment at 31%, also hitting a record high.
Overall, while Tesla faced some delivery shortfalls and plateauing auto sales, it managed to improve profitability across its segments, with key milestones in cost reductions and positive trends in gross margins.
Tesla’s Margins and Cash Flow Performance
Tesla’s industry-leading margins are driven by three major advantages:
1.Economies of Scale: Achieved through its expansive gigafactories.
2.Direct-to-Consumer Sales**: Tesla sells directly online and through its showrooms, bypassing traditional dealership networks.
3.Low Marketing Costs: Tesla spends very little on advertising compared to traditional automakers.
While Tesla expects its margins to expand over time due to growth in its non-automotive segments and software sales, its automotive margins have been pressured by price cuts in the last two years to sustain demand.
Cash Flow Highlights:
-Operating Cash Flow**: Increased by 89%, reaching $6.3 billion
-Free Cash Flow**: Jumped by 223%, hitting $2.7 billion
These cash flow figures stood out in the quarterly report, demonstrating Tesla’s ability to fund its ambitious plans for autonomy despite heavy investments in AI.
Guidance
1.FY24 Improvement: Tesla now expects slight growth in vehicle deliveries for FY24 (previous guidance indicated “notably lower” growth), implying a record-setting Q4 to make up for a weaker first half. Energy storage deployment is projected to more than double.
2.FY25 Outlook Surprise: During the earnings call, Musk forecasted 20% to 30% delivery growth in FY25, surpassing market expectations. A new, more affordable model is anticipated to launch in the first half of FY25, potentially easing investor concerns about competition.
3.New Product Strategy: The upcoming affordable vehicles in 2025 will be based on Tesla’s existing platform, indicating less dramatic cost reductions than previously suggested. However, the Robotaxi will bring a fresh manufacturing strategy.
Key Takeaways
1.Volumes Rebounded: After a 7% decline in deliveries during the first half of 2024, volumes recovered in Q3. Prices have stabilized, and Tesla’s focus on reducing unit costs contributed to improved automotive gross margins. Management’s priorities remain on unit volume and maintaining low inventory levels.
2.More than Just EVs: Non-automotive segments, such as Energy and Services, accounted for 20% of Tesla’s revenue this quarter, up from 16% a year ago. Likewise, these segments contributed about 20% of Tesla’s gross margin, nearly double from the previous year. As these segments grow, their impact on Tesla’s profitability will become increasingly significant.
3.Operating Margin Gains: Improved by 3 percentage points year-over-year:
-Negative Impact: Price cuts, mainly due to financing incentives.
-Positive Impact**: Lower costs per vehicle, growth in non-auto segments, FSD revenue, increased deliveries, and higher regulatory credit revenue.
4.Free Cash Flow Surge: Doubled sequentially to $2.7 billion. Capital expenditures increased by 43% to $3.5 billion, largely driven by investments in AI infrastructure. Tesla plans to spend over $10 billion on AI this year.
5.Strong Balance Sheet: Tesla maintains a net cash position of nearly $30 billion, which management believes provides ample liquidity to support its product roadmap and sustain positive cash flow margins.
We, Robot’ Event Takeaways
Key insights from the recent announcements include:
- Cybercab (Robotaxi): Tesla introduced the much-awaited Cybercab, a sleek two-seater, but key technical details—such as sensor configurations and processing capabilities—were notably absent. Musk’s decision to forgo lidar technology, a feature commonly used by competitors like Waymo, could potentially raise regulatory concerns about safety and compliance.
1.Optimus (Humanoid Robot): While the Optimus robots were a hit at the event, performing tasks like serving drinks and dancing, this entertaining display overshadowed the reality of how far the technology is from practical use. Reports indicated that the robots were primarily operated by humans, raising questions about their actual autonomous capabilities and readiness for industrial applications.
2.Robovan: A surprise announcement was the debut of the Robovan, a versatile vehicle intended for both mass transit and cargo transport. Its stylish Art Deco-inspired design drew attention, but like the Cybercab, it lacked concrete details or technical insights to convince analysts that the product is close to entering production. The presentation didn’t provide enough information to quell investor skepticism about its feasibility.
3. Full Self-Driving (FSD) Progress: Elon Musk projected that Tesla’s FSD technology would achieve full autonomy by 2026, with the Cybercab and current models (like the Model 3 and Model Y) spearheading this effort in Texas and California. However, Musk’s history of ambitious FSD promises has been met with ongoing skepticism, and this presentation did little to change that. No new safety data or significant updates were provided to address reliability concerns, leaving regulatory and safety issues unresolved. Tesla still faces significant challenges in proving its FSD capabilities are ready for public use without human oversight and in obtaining regulatory approval at both federal and state levels.
4.Market Reaction: Analysts expressed mixed feelings about the event. While some found the futuristic concepts inspiring, others noted the lack of substantial progress and the vague nature of Musk’s promises. This left investors questioning how close Tesla truly is to achieving its autonomy and robotics goals. For many, the event leaned more towards spectacle than solid evidence of progress.
Shareholder Deck Updates
1.Supercharger Network: Tesla’s Supercharger Network received widespread industry support, with most automakers now adopting Tesla’s North American Charging Standard (NACS). This acceptance is likely to boost Tesla’s Services segment and improve its margins in the long term. The number of Supercharger stations increased by 20% year-over-year to 6,706. Tesla also rehired some of the nearly 500 Supercharger team members who had been laid off earlier in the year, indicating renewed focus on this segment.
2.Market Share: Tesla’s market share remained steady in North America and Europe on a sequential basis, but saw a noticeable improvement in China, signaling stronger competitiveness in the region.
These details paint a picture of a company with promising ambitions but facing significant challenges in bringing its bold visions to reality. Investors will be watching closely for concrete progress and clearer timelines moving forward.
Key Updates from the Earnings Call
Full Self-Driving (FSD) Progress
- Tesla has surpassed 2 billion miles driven using its FSD (supervised) technology, which forms a core part of the company’s data advantage. This milestone underpins Tesla’s long-term autonomy thesis. Additionally, Tesla launched **FSD version 12.5** and introduced the Actually Smart Summon feature, enabling vehicles to autonomously drive to their owners in parking lots.
AI Training Capacity
- Musk shared that Tesla expects to have **nearly 90,000 H100 clusters dedicated to AI training** by the end of the year, enhancing the company’s machine learning capabilities.
Energy Storage Deployments
- Tesla deployed **6.9 GWh of energy storage** in Q3, although this fell short of the record 9.4 GWh achieved in Q2. The 40 GWh Megafactory in Lathrop is ramping up production, reaching 200 Megapacks in a single week. The **Shanghai Megafactory** is set to start shipping Megapacks in Q1 2025 with a run rate of 20 GWh. Tesla noted that energy deployments are inherently lumpy due to factors such as customer readiness and geographic order locations.
Key Quotes from the Earnings Call
Elon on the Cybercab:
- “I do feel confident of Cybercab reaching volume production in ‘26. We’re aiming for at least 2 million units a year, maybe 4 million ultimately.”
Musk envisions the Cybercab becoming a global, high-volume autonomous vehicle service. However, achieving this scale requires overcoming two major challenges: delivering level 5 autonomy at a competitive cost and navigating regulatory approval across regions with varying laws, road conditions, and weather considerations.
- Musk also dismissed the notion of a regular low-cost model, stating, “I think having a regular $ 25,000 model* is pointless.” He emphasized focusing on the Cybercab as a generational leap forward.
Musk on FSD:
- “Our internal estimate is **Q2 of next year** to be safer than human and then to continue with rapid improvements thereafter.”
He expressed confidence that full autonomy could be achieved in 2025 with existing vehicle models, although regulatory hurdles and safety standards remain significant barriers.
On Tesla’s Ridesharing App
- Tesla is already testing a *ridesharing capability* in the Bay Area for employees, with safety drivers currently in place. Musk anticipates launching the service for the public in California and Texas next year, pending regulatory approval. He added, “**I’d be shocked if we don’t get approval next year**,” but acknowledged that regulatory timelines are out of Tesla’s control.
Musk on Optimus:
- “We’re the only company that really has all of the ingredients necessary to scale humanoid robots.” He believes that the *Optimus robot* could become the “most valuable product ever made,” owing to Tesla’s combined AI and manufacturing advantages. However, the product remains at an early development stage and will likely take years to fully commercialize.
On Tesla’s Valuation:
- Musk reiterated his bold prediction: “Tesla will become the most valuable company in the world and probably by a long shot” He argued that Tesla’s strategic focus on future advancements in energy, transport, robotics, and AI sets it apart from competitors who are only targeting short-term trends.
Waymo, Uber, and Rideshare Future
There are two distinct paths to achieving full autonomy
1.Waymo’s Approach: Waymo focuses on highly structured, geo-fenced environments with extensive pre-mapping and sensor-based systems like lidar to ensure safety.
2.Tesla’s Approach: Tesla aims to develop a generalized self-driving system that works with computer vision and AI, relying on its fleet’s extensive data advantage and scaling software improvements. However, Tesla’s reluctance to use lidar technology and regulatory challenges could hinder its timeline for achieving level 5 autonomy.
These differing strategies highlight the varied paths to delivering a future of autonomous transportation, with each approach facing unique technical and regulatory hurdles.
Levels of Autonomy
- Tesla's FSD (Supervised): Tesla’s Full Self-Driving system remains at **Level 2**, meaning it still requires driver supervision to operate. In contrast, **Waymo** operates at **Level 4** in certain cities, where its vehicles can drive without human intervention, albeit under specific conditions.
-Jumping Levels: Musk’s vision for the Cybercab aims to skip from Level 2 to **Level 5 autonomy**, which implies no need for human input at all—a huge leap.
Technology Approach
-Tesla’s Strategy: Tesla relies on a **camera and AI-only approach**, focusing on software and data scalability rather than expensive hardware. Musk’s bet is that advanced software can eventually solve all driving scenarios.
- Waymo’s Strategy: Waymo uses a **hardware-intensive model** with a combination of LiDAR, radar, and cameras**, providing highly precise navigation. However, the reliance on multiple sensors leads to higher production costs per vehicle, around **$200,000** each.
Scaling Challenges
-Waymo’s Limitation: The high cost of Waymo's vehicles has hindered its ability to scale quickly, while Tesla plans to leverage its extensive fleet data to improve its autonomous systems over time.
-Tesla’s Repeated Delays: Despite its aspirations, Tesla’s full autonomy timeline has faced numerous delays. Scaling quickly while achieving robust and safe autonomy remains a significant challenge for the company.
Safety and Regulation
-Waymo’s Approach: Waymo has built trust with regulators by deploying vehicles cautiously in select cities and prioritizing safety, but its operations remain limited geographically.
-Tesla’s Regulatory Hurdles: The Cybercab’s design lacks traditional controls like steering wheels and pedals, raising concerns about regulatory approval. These changes could face substantial scrutiny, particularly if safety standards require features Tesla’s design omits.
Tesla and Uber: Competitors or Partners?
-Potential Partnership: Uber CEO Dara Khosrowshahi found the Cybercab vision "pretty compelling" and didn’t dismiss the possibility of a collaboration. Uber already partners with Waymo to offer autonomous rides in cities like **Phoenix, Atlanta, and Austin**. Khosrowshahi’s openness to partnership means there’s potential for Tesla's Cybercab fleet owners to list their vehicles on Uber to boost earnings.
-Hybrid Model: By leveraging Uber’s vast network, Tesla could quickly gain scale in local markets, especially given Uber’s capability to serve diverse customer needs. This could lead to a hybrid model where Tesla’s autonomous vehicles are available on Uber alongside other options.
Regulatory Challenges: An Obstacle to Elon’s Vision ?
-Waymo’s Critique: Former Waymo CEO John Krafcik criticized the Cybercab, highlighting its impracticality for a large-scale robotaxi business. Waymo’s approach focuses on accessibility and safety with taller vehicles and high-mounted sensors, whereas Tesla’s design was light on crucial technical details.
-Possible Lidar Mandate: Krafcik also noted that if regulators eventually require LiDAR technology for safety compliance, Tesla’s camera-only approach could face a significant setback. Regulatory decisions are beyond Tesla’s control and could fundamentally reshape its autonomy strategy.
-Musk’s Political Maneuvering: Musk’s political activities and controversies could complicate Tesla’s regulatory relations. Building strong connections with regulators is critical, given their power to greenlight or halt the Cybercab’s deployment.
Final Thoughts
The coming years will be pivotal for Tesla as it strives to overcome both techno logical and regulatory challenges. The success of Tesla’s autonomy plans hinges not just on its technological progress but also on its ability to navigate complex and varied regulatory frameworks worldwide. Whether Musk’s bold vision for full autonomy becomes a realityor remains a distant dream will depend on a combination of innovative breakthroughs and the company’s capacity to gain and maintain regulatory approval.
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