Tesla continues to add miles driven on FSD Beta at an incredible pace
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Tesla's relentless pursuit of full self-driving (FSD) technology and the broader implications of its AI initiatives garnered a lot of attention during the 2023 third-quarter earnings call - and for good reason. While the term "game-changer" is often thrown around, autonomous vehicles are worthy of that title.
FSD Beta 11.4.7.3 Gets Released
Yesterday Tesla released its latest FSD Beta, v11.4.7.3, internally to some of its employees. However, just a day later, we're now seeing this newest beta go out to some customers.
This latest update appears to only include bug fixes to FSD as the release notes remain the same as v11.4.7.2. However, as Tesla continues fixing bugs with FSD Beta in these latest builds, we may see an iteration of v11.4.7 go into the main production builds, which currently include a slightly older build of FSD Beta, v11.4.4.
Milestones in FSD Beta
Tesla vehicles have now covered a staggering 0.5 billion miles using FSD beta, underlining a significant data repository the company has been collecting. This treasure trove of real-world data is pivotal for refining and enhancing AI-driven systems.
To expedite AI training and realize FSD targets, Tesla has activated a 10,000 GPU cluster of H100s. This impressive infrastructure is operationalized at a speed that sets industry benchmarks.
Understanding FSD Version 12
Musk unveiled insights about FSD version 12, an "end-to-end AI." He explained the concept of "photon in, controls out," comparing the mechanism to human optics. This perspective reflects Tesla's drive to emulate human-like decision-making in its vehicles.
Terming Tesla's AI system as a "Baby AGI" (Artificial General Intelligence), Musk emphasized the system's necessity to operate and comprehend reality, signifying a more profound philosophical approach to AI-driven autonomy.
Revised FSD Pricing: A Strategy Unveiled
Tesla's recent decision to adjust the FSD price downward raised eyebrows. However, Musk clarified that this price is a "temporary low," hinting at future escalations in pricing commensurate with the system's value and advancements (FSD price history).
With other automakers, like Mercedes, stepping into the autonomous driving arena and accepting associated liabilities, Tesla delineated its position. The company highlighted Tesla's system's superior adaptability and versatility, drawing attention to its commitment to safety and legal considerations.
International Expansion Challenges
Tesla's strategic decision to limit the Neural net path planning system to North America currently stems from wanting to perfect the system before navigating rigorous global approval processes. The company's approach is to prioritize quality and safety over rapid, global deployment.
In a rare moment, Musk said, "I apologize it's not in those countries, but we keep plenty of ways to make it better. And it needs to drive such that it exceeds the — even unsupervised, significantly exceeds the probability of entry of a human or significantly better, a lower probability of entry than a human by far. I think we're tracking to that point very quickly."
Musk was explicit about the transformative role of AI and FSD in Tesla's future. Achieving autonomous vehicles and creating humanoid robots could potentially skyrocket Tesla's valuation, marking it as the preeminent company on a global scale.
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Following the recent departure of longtime deputy Omead Afshar, Elon Musk has stepped up to personally oversee Tesla’s sales operations in North America and Europe, according to a new report from Bloomberg, which cites people familiar with the matter.
This is a big shake-up that places Elon directly in charge of fixing Tesla’s sales slump in two key markets. The move has come as Tesla reported nearly on-the-ball deliveries for Q2 2025, hitting 384k deliveries, against a consensus street estimate of 385k deliveries.
New Leadership Structure
According to the report, Afshar’s former responsibilities are being divided between Elon and Senior VP Tom Zhu. Elon will now directly oversee the sales organizations in the US and Europe. As part of this change, Troy Jones, Tesla’s VP of North America Sales, will now report to Elon.
Tom Zhu, who is based in China, will continue to manage sales in Asia while also taking on the critical new responsibility of overseeing global manufacturing operations. Leadership of Tesla’s factories in Fremont, California, and Texas will now report to Tom. Tesla Energy’s factories will still report to Michael Snyder, VP of Energy and Charging.
For now, we’re unsure whether this is a temporary management structure, if the reporting lines will shift, or if Tesla will either hire or promote a new Senior VP of Sales to cover the duties.
Tackling the Sales Slump
The restructuring is a response to the recent downturn in sales. Analysts estimated that Tesla would deliver approximately 385k vehicles, which they essentially managed to achieve. However, deliveries fell short of production numbers, with Tesla delivering just 373k of the 410k vehicles produced.
This situation is particularly challenging in Central Europe. Europe has been noted as Tesla’s weakest market, according to Elon. Interestingly, Elon previously stated in several interviews over the last few months that there was no demand issue, but it now seems that there have been some issues with growing sales.
With Tesla’s new vehicle registrations across Europe having plunged 37% since the start of this year, and the rollout of the new affordable model, as well as more affordable versions of the Model 3 and Model Y seemingly delayed, there is a lot to do. Some analysts are projecting a second consecutive annual decline in Tesla’s global car sales for 2025.
The Rise of Tom Zhu
A key note in this reshuffle is the return of Tom Zhu to a top global operations role. Tom had previously led the construction and ramp-up of Giga Shanghai and was then promoted to Senior VP of Automotive Operations in 2023. Last year, he was sent back to China to focus on tackling regulatory hurdles with the launch of FSD in China.
His return to overseeing global manufacturing, even while staying in China, is a significant vote of confidence in his abilities. It also comes as Chinese authorities have begun drafting new autonomy guidelines to clear a path for the broader rollout of both Supervised and potentially Unsupervised FSD.
Wrap Up
This major restructuring shows that Elon is once again focused on Tesla and plans to personally tackle the company’s biggest issues. This will require a careful hand, as Elon’s forays into politics have caused self-admitted brand damage. If anyone can turn this around and have the Model Y return as the Best-Selling Vehicle of 2026, having just missed out by a few thousand vehicles to the Toyota RAV4, it is Elon.
Alongside him, Tom Zhu will be responsible for streamlining global manufacturing and ensuring that Tesla is ready to launch their new affordable variants in the near future, which should also make a considerable dent in sales.
Tesla has released its Q2 2025 production and delivery numbers, revealing an improvement in production and deliveries over Q1, but still down from a year ago.
Tesla produced 410,244 vehicles in Q2, nearly equal to their production a year ago, which was 410,831 vehicles. Production for this quarter was significantly up compared to Q1 2025, which only saw 362,615 vehicles produced. While production numbers matched those of a year ago, actual deliveries were down.
Q2 2025 saw Tesla deliver 384,122 vehicles, which was down approximately 59,000 units compared to the same period last year, but up by approximately 48,000 vehicles, or about 14% compared to Q1.
Breakdown by Model
The Model 3/Y segment continues to dominate Tesla’s production profile, accounting for 396,835 units produced and 373,728 delivered in Q2 2025. Deliveries for the “Other Models” category—which includes the Cybertruck, Model S, and Model X—were down compared to the previous quarter, with just 10,394 vehicles delivered, a 20% decline. Compared to a year ago, the drop for these vehicles is even more drastic, with sales being down 52%. Tesla refreshed its Model S and Model X last month with new features; however, the update was much smaller than expected and likely didn’t help much in increasing sales for these vehicles.
Tesla doesn’t break down Cybertruck sales separately, but those deliveries are expected to be down as well.
Tesla noted that 2% of total deliveries this quarter were accounted for under operating lease agreements, consistent with the same quarter last year.
Quarter
Production
Deliveries
Model 3/Y Deliveries
Other Models Deliveries
Lease Share
Q2 2025
410,244
384,122
373,728
10,394
2%
Q1 2025
362,615
336,681
323,800
12,881
4%
Q2 2024
410,831
443,956
422,405
21,551
2%
Context and Market Response
While the numbers exceeded some bearish expectations, the year-over-year delivery drop is Tesla’s second straight quarterly decline. Analysts attribute declining sales to increasing EV competition and reputation issues.
Still, investors found relief in the improved quarter when compared to Q1. The stock rebounded about 4% yesterday on the news.
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