Record results, 7M vehicles produced, expanding energy storage, and advancing Full Self-Driving (FSD) toward human-level safety by 2025. Key products like the Cybertruck and Robotaxi remain on track, emphasizing affordability and sustainability.
Key Takeaways:
- Record Financial Results: Tesla achieved record-breaking revenues and profits in Q3 2024, driven by strong growth in the automotive and energy sectors.
- Leadership in Autonomy: FSD technology continues progressing, with Tesla targeting human-level safety in autonomous driving by mid-2025.
- Focus on Affordability and Scalability: The launch of affordable EVs and expansion of energy storage capacity highlight Tesla’s commitment to accessibility and sustainability.
- Future-Ready Vision: Tesla’s advancements in AI, robotics, and energy storage position it as a global leader in the transition to sustainable energy and transportation.
Prepared Remarks by Travis Axelrod – Head of Investor Relations
Travis Axelrod opened the Q3 2024 earnings call by highlighting Tesla’s impressive performance amidst a challenging global environment. Tesla achieved record-breaking results across its automotive and energy sectors, demonstrating resilience and the ability to innovate under pressure. Axelrod noted that Tesla’s focus on scaling operations and advancing technology has solidified its position as a market leader.
He reminded listeners that forward-looking statements discussed during the call are subject to risks and uncertainties, as outlined in Tesla’s filings with the SEC. He praised the Tesla teams worldwide for their contributions to these milestones, underscoring the collective effort required to maintain Tesla’s competitive edge.
Key Updates from Elon Musk – CEO
1. Record Achievements Amidst Industry Decline
Despite a broader industry decline, Elon Musk highlighted Tesla’s success in delivering record EV units in Q3 2024. Global automotive order volumes fell year-over-year, yet Tesla produced its seven millionth vehicle, showcasing its operational efficiency and commitment to scaling manufacturing. Musk noted that Tesla’s profitability sets it apart from competitors, with no other EV company or EV division of traditional automakers operating profitably.
According to Musk, this achievement reflects the immense dedication and skill of Tesla’s teams. He emphasized the importance of focusing on innovation and efficiency to maintain this competitive advantage.
2. Energy Storage Expansion
Tesla’s energy storage business saw explosive growth, driven by strong demand for the Megapack and Powerwall products. The Lathrop Megapack factory has reached a 40 GWh annual run rate, while the Shanghai factory will add 20 GWh in early 2025. Musk described the energy business as “growing like wildfire” and integral to Tesla’s broader mission of enabling a sustainable energy future.
This expansion diversifies Tesla’s revenue streams and positions the company as a leader in renewable energy solutions. With these advancements, Tesla is poised to play a pivotal role in the global transition to sustainable energy.
3. Autonomy and Full Self-Driving (FSD)
The October 10 event showcased Tesla’s autonomous advancements with live demonstrations of fully autonomous vehicles. Tesla’s Cybercabs, operating without manual controls, transported thousands of passengers without any incidents during the event. Musk noted that this was a significant milestone for Tesla’s Full Self-Driving (FSD) technology.
Version 12.5 of FSD has shown substantial improvements in miles-per-intervention, and Version 13, expected in early 2025, will further enhance performance. Tesla predicts that its FSD technology will surpass human-level safety by Q2 or Q3 2025, which could redefine the public perception of autonomous vehicles.
4. Cybertruck and Robotaxi
Tesla is on track to ramp up Cybertruck production, with volume production expected in 2026. Musk reaffirmed Tesla’s ambitious goal of producing 2–4 million Cybertrucks annually. The Cybertruck’s unique design and innovative manufacturing processes are key differentiators in the market.
The Robotaxi, slated for production in 2025, is designed for cost-per-mile efficiency. Musk described it as a revolutionary product that will make sustainable transportation more accessible and affordable. It has the potential to transform urban mobility and drive widespread EV adoption.
5. 4680 Battery Cells
Progress in Tesla’s 4680 battery cell production is accelerating, with cost-competitiveness nearing industry-leading levels. Musk stated that the 4680 cells are poised to become North America’s most affordable and efficient option. While Tesla continues to source external cells to meet demand, its internal production capabilities are expected to be crucial in scaling EVs and energy storage.
Musk praised the 4680 team’s efforts to improve efficiency and reduce costs, emphasizing the importance of innovation in maintaining Tesla’s competitive edge.
6. Ride-Hailing Services
Tesla is testing ride-hailing services with employees in California and plans to roll them out to the public in Texas and California by 2025, pending regulatory approval. This initiative highlights Tesla’s ambition to enter the ride-hailing market and underscores its commitment to redefining transportation through autonomy and affordability.
Financial Performance and Business Strategy
1. Overview by Vaibhav Taneja – CFO
Vaibhav Taneja provided an in-depth analysis of Tesla’s financial performance. The company generated $6.3 billion in operating cash flow, with year-over-year growth in automotive revenues. Despite a reduction in average selling prices (ASPs) due to financing incentives, Tesla maintained strong margins, particularly in the energy sector.
Tesla achieved record energy margins of 30%, driven by a favorable project mix. Taneja emphasized that Tesla remains committed to reducing costs and improving operational efficiency. The company recorded its lowest cost-per-vehicle in Q3, a milestone that reflects its ability to scale profitably.
2. Cost Efficiency
Tesla’s focus on cost efficiency has been a cornerstone of its strategy. The company continues to invest in AI and computing infrastructure while managing expenses judiciously. By the end of the year, Tesla expects to deploy 50,000 GPUs to support its AI training needs, further enhancing its technological capabilities.
Taneja highlighted ongoing efforts to reduce costs in production processes without compromising customer experience. This includes streamlining operations and leveraging economies of scale.
3. Autonomous Vehicle Regulation
Musk and Taneja advocated for a federal regulatory framework for autonomous vehicles, emphasizing the inefficiencies of state-by-state approval processes. A unified national approach would facilitate faster deployment of autonomous technology, allowing Tesla to scale its FSD and ride-hailing services more effectively.
4. Tesla Roadster
The Tesla Roadster remains a passion project for the company. Musk explained that while progress continues, it has taken a backseat to more impactful initiatives, such as affordable EVs and autonomy. The Roadster’s final design is nearing completion, and Musk assured investors that it would be a “halo product” showcasing Tesla’s engineering excellence.
Technological Advancements
1. FSD Improvements
Tesla’s FSD technology has seen remarkable progress in 2024. Version 12.5 delivered a 100x improvement in miles-per-critical-intervention, while Version 13, expected in early 2025, will achieve a 1,000x improvement compared to early 2024. These advancements position Tesla as a leader in autonomous driving.
Musk emphasized that FSD’s continuous improvement is supported by Tesla’s vast fleet data and advanced AI training infrastructure. These enhancements will be crucial in scaling Tesla’s autonomous ride-hailing and Robotaxi services.
2. Optimus Robot
Tesla showcased significant advancements in its Optimus humanoid robot, focusing on skill and tactile sensing. Optimus is the most advanced humanoid robot under development, equipped with a next-generation hand and forearm featuring 22 degrees of freedom. Musk described Optimus as a long-term growth driver with the potential to revolutionize industries beyond automotive and energy.
3. Integration with xAI
Tesla’s collaboration with xAI has been instrumental in advancing its AI capabilities. While xAI focuses on artificial general intelligence, its work complements Tesla’s efforts in real-world AI applications, such as autonomous driving and robotics. Musk noted that this partnership has contributed to Tesla’s AI training efficiency and overall technological progress.
Vision for 2025 and Beyond
1. Affordable EVs
Tesla is on track to launch a $25,000 robotaxi by 2025. This vehicle, designed without manual controls to maximize cost-per-mile efficiency, represents the next phase in Tesla’s mission to make EVs more accessible. By prioritizing affordability, Tesla aims to drive significant adoption of autonomous EVs.
2. Scaling Energy Storage
Tesla plans to exceed 100 GWh of annual stationary storage capacity, with ambitions to reach terawatt-hour levels in the coming years. This expansion is essential for supporting the global transition to renewable energy and underscores Tesla’s commitment to sustainability.
3. Infrastructure Expansion
Tesla continues to grow its supercharger network, integrating other OEMs into its ecosystem. The company’s lithium refinery, set to begin operations in 2025, will enhance supply chain resilience and reduce reliance on external suppliers. This initiative is part of Tesla’s broader strategy to secure resources for expanding operations.
4. AI and Robotics Integration
Tesla is leveraging AI across its automotive, energy, and robotics divisions to improve efficiency and enhance customer experiences. The company’s advancements in neural networks and real-world data processing position it as a leader in AI-driven innovation.
Closing Remarks by Elon Musk
Elon Musk concluded the call by expressing gratitude to Tesla’s teams for their hard work and resilience in a challenging environment. He reiterated Tesla’s commitment to innovation, affordability, and sustainability. Musk predicted that Tesla’s focus on autonomy, energy solutions, and scaling operations would cement its position as the most valuable company in the world.
Investor Questions Highlights
Affordable EV Rollout
Tesla reaffirmed its plan to deliver an affordable EV model in 2025. The focus remains on reducing costs and increasing adoption by offering compelling value through advanced technology and affordability.
Ride-Hailing Deployment
Public ride-hailing services are expected to launch in Texas and California in 2025, contingent on regulatory approvals. These services will leverage Tesla’s FSD technology to offer seamless autonomous transportation, positioning Tesla as a key player in the ride-hailing market.
Cybertruck and Semi
Tesla is ramping up Cybertruck production, with a target volume production for 2026. The Tesla Semi has also received strong demand due to its superior cost efficiency and performance compared to traditional diesel trucks.
Tesla Roadster
Development of the Tesla Roadster is progressing, with final design tweaks nearing completion. Musk described it as a “cherry on top” of Tesla’s lineup, showcasing its engineering prowess.
Source: Tesla.
