Navigating Challenges: Will Tesla Meet Earnings Expectations Amid Chinese Headwinds?

By Kevin Armstrong
Tesla may be facing one of its toughest quarters
Tesla may be facing one of its toughest quarters

As Tesla prepares to release its third-quarter earnings amidst a wave of speculation and market uncertainty, the eyes of analysts and investors are fixed firmly on the EV giant. Dan Levy of Barclays, often a supporter of Tesla, forecasts potential delivery shortfalls, setting the scene for a pivotal report that could influence Tesla's trajectory in the coming quarters.

Potential Hurdles: The China Factor, Model 3, and Cybertruck

The anticipated 455,000 units for the quarter, while substantial, fall shy of the expected 463,000, prompting questions regarding Tesla's ability to meet Wall Street's projections. China, representing a significant portion of Tesla's market, poses a particular challenge. A 31% dip in Tesla's China-made vehicle sales from June to July marks the first decline since the previous December, spotlighting potential hurdles in this vital market.

Model 3 Revamp and Cybertruck

The introduction of the revamped Model 3 generates both opportunities and challenges. The anticipation of a new model may be causing potential buyers to delay purchases, impacting sales globally. This shift in consumer behavior necessitates efficient inventory management to clear out older models and make way for the refreshed Model 3. But just how much does Tesla have to discount the original Model 3? There is still no firm date for the Highland coming to North America.

The upcoming Cybertruck, with over 2 million reservations, represents another variable in Tesla's equation. While many reservation holders may already own a Tesla, many are likely biding their time, holding on to their traditional ICE vehicles as they await the arrival of Tesla's innovative electric truck.

Navigating Challenges: Analysts' Stance and Market Sentiment

Despite these challenges, the analyst community holds a generally neutral view of Tesla. Strategic adjustments in production, pricing strategies, and external factors like the ongoing United Auto Workers strike affecting other automakers could benefit Tesla. While there may be a miss on this quarter, there are likely to be significant numbers ahead. When the new Model 3 and Cybertruck are available, there will be a lot of demand and a lot of deliveries.

With the release of next week's earnings report, Tesla is at a crucial juncture. The China factor, consumer anticipation for new models, and internal strategic adjustments set the stage for a closely watched reveal. The report is more than just a revelation of numbers; it's a litmus test for the company's strategic decisions, market adaptability, and ability to meet growing expectations.

Tesla FSD V12.5 to Enable Sunglasses-Friendly, Nag-Free FSD

By Karan Singh
Not a Tesla App

Tesla has made some significant improvements with FSD 12.4, primarily, the removal of the steering wheel nag under certain conditions. However, there’s a caveat – you can’t wear sunglasses.

According to Elon Musk, FSD v12.5 will introduce support for nag-free FSD, even if you’re wearing sunglasses.

FSD V12.5 is an Upgrade

Ashok Elluswamy, Director of Autopilot Software, also took to X recently to mention that v12.5 is a big improvement to FSD v12.4. While he didn’t mention any specific details, this lines up with some of Musk’s previous comments that each FSD v12 iteration will see major improvements to the FSD model.

Elon also mentioned that while Tesla has a massive fleet of cars, their laser focus on making FSD work, rather than touting every daily achievement – has been their key to making generalized self-driving cars work.

FSD v12 has been pretty much a complete rewrite of the FSD city streets software stack, with drastic improvements over FSD v11. However, certain parts of the software stack haven’t been updated yet. Some features, like the updated highway stack are expected to be in FSD v12.5, which Musk confirmed recently. However, other features such as Park Seek and Banish Autopark, which were expected to arrive with FSD V12.4 are still up in the air.

What about V12.4?

FSD V12.4.3 is currently out to about 5% of the fleet (about 20-25% of FSD users) and hasn’t been pushed out again since about July 10th. Our new auto updating statistics pages can help break this down for folks who are curious.

Update 2024.15.15

FSD Supervised 12.4.3
Installed on 5.4% of fleet
6 Installs today
Last updated: Jul 22, 5:45 pm UTC

Given that it’s been some time since any new vehicles have received V12.4.3, it seems the rollout has been stopped. There could be any number of reasons for this – including software bugs, or a lack of confidence with FSD. Additionally, it could just halted in favor of focusing resources on V12.5.

While we’d love to see more vehicles get v12.4.3, we’re likely to see v12.4.4 or v12.5 being the next big waves of deployments to customers. Either way, early-access testers and Tesla ADAS testers will receive these updates first, and then they’ll roll out to the vast majority of customers once Tesla feels confident there aren’t any major issues. Tesla does all this testing in the name of safety, and it's essential that bug-free versions of FSD are the versions that are rolled out wide.

So, for now, leave your sunglasses on and hang tight for the next FSD update.

Tesla Aims To Launch Cybertruck in Canada After Transport Canada Makes Exception for Steer-by-Wire

By Karan Singh
Not a Tesla App

Tesla has confirmed that they’re aiming to launch the Cybertruck in Canada later this year. Transport Canada recently granted Tesla and the Cybertruck a unique exemption to allow steer-by-wire functionality (h/t Sawyer Merritt).

Steer-By-Wire Exemption

We previously reported that the Cybertruck was facing delays due to a steer-by-wire regulatory issue with Transport Canada. On Friday, July 19th, Transport Canada issued a message stating that they would exempt the Cybertruck, for all its models, from part of Canada’s Motor Vehicle Safety Act, which currently doesn’t permit the usage of steer-by-wire systems.

The period that the exemption begins seems to be immediate – July 19th, 2024, and will last through July 18th, 2029, whereafter regulation should supersede the exemption. In the meantime, Tesla will provide a semi-annual incident report, beginning on January 18th, 2025, including information on steering system malfunctions or failures, as well as corrective measures and customer complaints.

It seems that Transport Canada will also have to be notified every time Cybertruck’s steering software is provided with an OTA update, which could result in some update delays in Canada.

Canadian Cybertruck Soon?

With all this information, it sounds like Tesla is aiming to launch the Cybertruck to Canadian customers sometime relatively soon, as they stated they’re still aiming by the end of the year. There is a good chance that they may begin converting pre-orders to orders once Tesla. Tesla hasn’t commented on which model will be available in Canada, but it wouldn’t surprise us if it’s limited to the Foundation series in Canada in the initial release.

We could expect the first customer Cybertrucks (Roshel Defence and a few private importers notwithstanding), to be on Canadian roads in just a couple of months.

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