Tesla's Earnings Call Recap - HW3 Upgrade, Unsupervised FSD, FSD V14 and More

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If you missed Tesla’s 2024 Q4 earnings call or just want to review everything that was shared, don’t worry - we’ve got you covered. Below is a list of all the key points made during the call, which includes the popular Q&A session with Elon Musk and other executives. We broke down the information into several categories for easier reading.

If you prefer, you can also listen to Tesla’s earnings call on demand.

Overall Finances

• Tesla’s total revenue increased 2% year-over-year in Q4, to $25.7B.

  • Tesla saw growth in Energy Generation, Storage, Services, and Other product/service groups

  • Tesla saw growth in vehicle deliveries

  • Tesla had higher regulatory credit revenue (likely due to pressures from credits ending soon)

  • Reduced Model S, 3, X, and Y average sales price (ASP), leading to increased sales

    • Attractive financing options, including 0% financing, spurred additional sales

• Tesla’s operating income decreased 23% YoY in Q4, down to $1.6B

  • That is an overall margin of 6.2%

  • Reduced vehicle ASP impacted margins

  • Increase in operating expenses driven by AI and other R&D projects

  • Income increased in:

    • Energy Generation, Storage, Services, and Other categories

    • Lower cost per vehicle, including lower raw material costs

    • Higher regulatory credit revenue

• Tesla has $36.6B in free cash, cash equivalents, and investments. This is an increase of $2.9B over last year, primarily the result of $2B in positive cash flows.

Production, Revenue, COGS

• Energy storage production has grown YoY since 2023

  • Growth came from both Megapack and Powerwall

  • Growth is supply-constrained - Tesla can’t produce them fast enough - both residential and commercial customers are ordering quickly

• Tesla delivered over 2 million vehicles in 2024, a new record for production and deliveries (likely includes used or other types of vehicles since total new vehicle deliveries were at almost 1.8m in 2024)

  • The lowest amount of un-delivered vehicles this year ever, very few vehicles sitting on service center/delivery lots

  • The Model Y was once again the best-selling vehicle of 2024 - of any kind

  • Tesla’s current constraint for production is battery packs

    • Making progress in addressing that constraint

    • Progress should improve drastically next year and the years after for battery pack production

• Tesla grew in volume in China greatly, even though it faces extreme competition in the country

• Overall cost per car is down to below $35,000 per vehicle.

• All factories will start producing the new Model Y next month

  • This rapid and unprecedented change could result in an impact on production

  • Margins will be impacted due to launch-related costs for Q1 and Q2

• The referral program had an impact on cost and will continue to do so as the program continues

• Tesla doesn’t expect margins for service, but service remains GAAP-positive

New Products

• Several new products in 2025

  • 1st half of 2025 - More affordable model is still coming

  • Per dollar basis, Tesla has the most compelling lineup

    • Best software in the business, capable of autonomy

    • Prices comparable to the mass market, products compared to premium competitors

• Optimus could potentially launch for commercial use in 2026.

Looking Forward

• Tariffs

  • Uncertainty, focusing on localizing supply chains

  • Tariffs are very likely, will have an impact on business and profitability

• AI is the biggest driver in cost

• Tesla increased CapEx by $2.4B

  • Focused on improving CapEx efficiency, using a targeting manner to get immediate benefits

  • Build out of Cortex accelerated the rollout of FSD V13

  • $5B in AI-related CapEx

  • 2025 CapEx expected to be flat

  • Focus of critical investments will be on manufacturing, AI, and robotics.

    • These are expected to bear fruit in 2026, 2027, and 2028.

• 2025 will be a pivotal year for Tesla

  • Lots of investments continue to be made

  • Setting the pace for the next phase of growth

  • Tesla is focusing on maximizing volumes and doubling down (or 10x) on Autonomy and real-world AI.

• Elon sees a path for Tesla to be the most valuable company in the world by far - it is a difficult but achievable path

  • The path means Tesla will be worth more than the next top 5 companies combined

  • This will be due to autonomous vehicles and autonomous robots

    • Tesla began laying the groundwork in 2024

    • Tesla will begin building the manufacturing lines in 2025

    • “Epic 2026 and ridiculously good 2027 and 2028” - Musk

  • The future will be coming very fast, the inflection point for human history (autonomy/AI)

FSD and Autonomy

• Tesla has achieved exponential progress in FSD

  • People don’t realize how good FSD is, and many people have no experience with it

  • Those with previous experience need to try it again - it has improved drastically over the last year

    • Last year’s experience was with a toddler - this year’s experience is with a grown-up

• Passenger cars have 10 hours of utility per week - out of 168 hours a week.

  • An autonomous car would be of utility for 55 hours a week - about 1/3rd of the week

  • Autonomous vehicles are useful for both cargo and people delivery

  • No incremental cost change, just a software update to enable 5x utility

  • Largest asset-value increase in human history

  • Bigger than anything else in its history - bigger than the first car, the roadster, the Model 3, the Model Y

  • Launch of Unsupervised FSD will be a turning point - true, real-world AI that actually works

  • No company in the world is as good as Tesla at real-world AI

FSD Going Global

• FSD works very well in the US, but over time it will work just as well everywhere else

  • Europe is a challenge due to regulation

    • Netherlands presents FSD to EU in May, expected to be approved EU-wide then. Won’t happen sooner than May

    • Unsupervised FSD in Europe could be even further away

  • China is another challenge - won’t allow training videos to leave China, and US won’t let training be done in China

    • Tesla is using public videos of Chinese streets on the internet to train Chinese FSD

    • Bus lanes in China are one of the biggest challenges there due to restrictions based on time, etc - automatic tickets for being in the wrong lane in China

• Q4 Safety Report

  • Continual year-over-year safety improvements for those using FSD

  • People go to manual driving to check their phone so that they don’t strike out/get beeped at - and then go back to FSD

    • Significantly less safe than just being on FSD

  • Tesla is getting to the point where FSD is an order of magnitude safer - already 8.5x safer than a human driver

FSD V14

• FSD V14 will be another significant step

  • Cortex launched at Giga Texas, which is a significant help in training FSD, and Tesla will continue expanding it

  • Tesla will need 10x the current compute to make Optimus fully useable (a thousand times more complex and a thousand times more use cases than FSD)

  • Tesla will spend the money on training compute over time, it won’t suddenly spend $500B on compute tomorrow

  • The cost of training is dropping dramatically with time

• FSD V14 will focus on improving neural nets, working with auto-regressive transformers

  • Model size and context size will continue to grow and scale up

  • Context size is restricted by on-board memory, and will require optimization

  • Audio support to be further expanded and become relevant in V14

  • Data from tricky edge cases gathered by the fleet will help V14 make better decisions

Unsupervised FSD

• Unsupervised FSD in Austin, Texas, in June 2025, as a paid robotaxi service.

  • Already happening at Fremont, will be happening at Austin soon, and other factories later

    • Cars know what lane they need to go to for pickup/delivery

    • They drive from the line to their spot and do it reliably every day, thousands of times a day

    • Teslas will be in the wild, with no driver, as of June

  • Tesla’s solution is generalized - doesn’t require high-precision maps.

    • Tesla is starting with Austin to make sure everything is ok and to test the waters, to ensure the safety of the general public and those in the cars

  • More cities will come in the future

    • Everywhere in North America by next year

  • Unsupervised FSD is limited by regulatory issues, not technical capability.

  • Tesla’s fleet will be using Unsupervised - you won’t be able to bring your own vehicle to Austin and enable it just yet.

    • Robotaxi fleet will be available to be ride hailed and Tesla will charge for it.

    • Tesla is still working on the experience - the app, arrival, payment, billing, exiting the vehicle, etc.

    • In 2026, owners will be able to add their vehicles to the Unsupervised FSD fleet.

    • Tesla needs to be confident that the probability of injury or accident is extremely low before they allow eyes-off / Unsupervised FSD on customer vehicles

• Unsupervised FSD will also happen in California this year - in fact, in many regions of the US this year.

  • Austin is Tesla dipping their toes into the water to confirm it works and is safe.

  • Tesla is aiming for a safety level significantly above the average human driver

    • Standard is very high, if there is even one accident, it will get worldwide headlines, even though 40,000 people die in car accidents every year

  • Hold-back is an excess of caution

• How many times did you have to intervene for definite safety reasons?

  • Don’t compare to feeling like you had to intervene - Tesla is close to eliminating critical safety interventions being normal. They’re already very rare.

Hardware 3 - Replacement Confirmed

• Elon confirmed HW3 will need to be replaced - it will be replaced for free for those who previously purchased FSD outright.

  • This will be expensive - but it won’t have a massive impact because less people purchased it outright versus subscribing

• Tesla still working on HW3 in the meantime - V12.6 is a baby V13 and a significant improvement over V12.5.4.2

• HW3 releases will trail AI4 releases for the foreseeable future

Licensing FSD

• Tesla is in discussions with multiple major car manufacturers for licensing FSD

• Tesla is advising companies to take apart their vehicles, and look at requirements

  • Cameras, compute, thermal limitations, capabilities and design

• Tesla will only sign if the volume is very high - otherwise, it isn’t worth it for Tesla due to engineering constraints

  • Cybertruck’s FSD limitations are a direct result of this

• Interest in licensing FSD will become even higher once Unsupervised FSD becomes proven

Optimus

• It is difficult to predict when Optimus will arrive. It is not design-locked for 2025

  • Tesla is building the tracks, re-designing the train, and designing the station in real-time while putting it all together

  • Tesla used all custom parts for Optimus because they couldn’t find anything that met their requirements

  • Constantly improving Optimus - evolving in a good direction

• The internal plan is to build 10,000 by the end of 2025 - but that’s optimistic

  • Tesla will build several thousand at least

  • They will do useful things by the end of the year - at least within Tesla’s factories.

• This is “production design 1”, and use in Tesla’s factories will inform “production design 2” for next year.

• Optimus will ramp faster than anything else they’ve ramped - they’ve previously done half an order of magnitude a year - they want to aim for one full order of magnitude per year

  • 100m per year in the far future

• Most sophisticated humanoid hand

  • Optimus will be able to play piano, thread a needle

  • Extreme level of precision with the hand that no other competitor has gotten close to

  • Other companies can’t produce thousands or millions of units - they can build one-off hand-build units or a few prototypes

  • Other companies have extremely limited real-world experience and data

• Long term, Optimus can be $10-20B in revenue

• More compute means more Optimus, more Optimus means more compute

• Tesla doesn’t intend to begin Optimus sales just yet - Elon was careful not to answer questions related to sales and pricing

  • Tesla wants to use Optimus immediately for the boring/tedious/dangerous tasks around its own factory first

  • This will help training as well, close the loop for improvement

  • Production Version 2 - launches middle of next year

    • Production line to build up to 10K units a month, rather than the current limited production

    • This could be the version that is potentially sold to companies in the second half of next year

    • Likely won’t be sold directly to retail customers

  • The expected ramp is really fast

  • Demand will not be a problem, even at a high price

  • At 1m units of production per year, the production cost will be under $20,000 per unit

    • This is likely several years away

  • Price will be set by market demand

Semi

• Semi Factory just had its roof finished last week

• Mechanical equipment will be installed in the next couple of months

• Late this year comes the high-volume variant of Semi

• Scale production begins end-2025/early-2026

• Will meaningfully contribute to Tesla’s revenue next year

• There is a shortage of truck drivers in America, and people are humans - they get tired and need breaks

  • It is a tough job, and lots of people are leaving the profession rather than joining it.

  • Future logistics problem - autonomy will help to bridge the gap and meet the need for trucking

• Semi will likely be a $12B/year endeavor in the future once the ramp is complete

Energy

• Tesla sees this as a “down-to-Earth” topic - it's real, and it’s happening now

• Storage is a big deal and will become even more important in the future

  • Total demand for electricity storage will grow massively over time

  • Enables far greater energy output to the grid than is currently possible

  • Vast majority of the global grid doesn’t have storage - power plants are designed for high peaks rather than steady energy

  • Lots of storage will help to increase the energy available - by up to 2x what is available now

• Lots of demand for stationary storage, both residential and commercial

• Mega Shanghai is going fast

  • Elon confirms a 3rd Megafactory for stationary storage, but not the location

  • Tesla will NOT rob from vehicle storage to feed into stationary storage, nor vice versa

• Tesla still working on Solar Roof, haven’t given up

  • Core part of the residential product portfolio

  • Is a premium product - like the Model S or Model X - and priced like it

  • New versions of the Solar Roof are being designed and worked on still

  • Best time to put in a solar roof is either on a new home or a house needs a new roof - solar roof makes sense then

  • Combined with Powerwall, it makes owners self-sufficient, even if the grid is off for several days

Other Topics

• LiDAR is still a crutch

  • Tesla has radars in the Model S and Model X - they ship turned off

  • Humans drive without shooting lasers from their eyes - they drive with eyes and a brain.

    • Digital equivalent is cameras and a neural net

    • Road system is designed for this, using LiDAR doesn’t help the generalized solution

    • LiDAR is good for a specific solution - which has to be trained neighborhood by neighborhood

    • LiDAR doesn’t work in fog, doesn’t work in inclement weather, and doesn’t make sense on roads

    • SpaceX uses LiDAR, but it's the wrong solution for cars on roads that were made for people

• Real-world AI and the US, next 4 years

  • Talented Americans need to look at making manufacturing cool again in America

  • Move from law, finance, etc, to manufacturing. Too much talent focused on there

• Tesla’s mission of electrifying the world through sustainable transport and energy

  • It’s inevitable that all transport will eventually be autonomous and electric, including aircraft

    • Loss of rebates or changes in policy won’t change that

  • Can’t be stopped, it will eventually happen, just like the internal combustion engine taking over

That’s the complete step-by-step replay of the entire earnings call. It’s a lengthy one, but there was a lot of information shared across all of Tesla’s pillars. There’s a lot to be excited about, from FSD to the next-gen vehicle, Optimus, the Robotaxi network, and more. These next few years will be huge for Tesla and we hope you’ll join us for the ride.

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Tesla Semi Keynote: New Features, 46 Charging Sites, Upgraded Battery & More [VIDEO]

Out of Spec BITS/YouTube

Tesla’s Dan W Priestley attended the Advanced Clean Transportation (ACT) Expo in Anaheim, California, and provided an update on Tesla’s Semi truck program. The presentation covered several key developments on the status of Tesla’s Nevada Semi Factory, refinements to the Semi, and Tesla’s plans for charging and ramping production through 2026.

Let’s dig in and take a look at everything that was captured by the Out of Spec team at ACT Expo. The original video is embedded below if you’d like to watch it.

Semi Factory & Production Ramp

Priestley reaffirmed the timelines mentioned during Tesla’s Q4 2024 Earnings Call that Tesla will scale Semi production in 2026. To achieve this, Tesla has been actively building and expanding the Gigafactory Nevada site, specifically to support the production of the Tesla Semi. The dedicated Semi facility will have a targeted annual capacity of 50,000 Semi trucks.

Following the beginning of production, Tesla will utilize the initial trucks to integrate into its own logistics operations. This will serve as both a final real-world testing ground as well as an opportunity for Tesla to gather data internally. Tesla plans to begin subsequent customer deliveries throughout 2026 as the ramp-up continues.

Reuters also reported that Tesla is hiring over 1,000 new employees at the Semi Factory to begin the rapid ramping of the program.

Semi has already amassed 7.9 million miles with Tesla’s current testing and operational fleets, providing some real-world data and testing. Feedback for the truck has been exceptionally successful, with many drivers praising the Semi’s performance and comfort.

New Tesla Semi Features

Of course, it wouldn’t be a Tesla keynote without showing off some new things. The Semi will be available in 500-mile and 300-mile range configurations, now featuring updated mirror designs and a drop-down glass section to improve visibility and allow easier interaction with external elements—such as control panels at ports, for example.

New Electric Power Take-Off (e-PTO)

The Tesla Semi will also feature a new capability called Electric Power Take-Off, or e-PTO system. Similar to the PTO systems found on other vehicles, this will allow the Semi’s high-voltage battery to power auxiliary equipment at variable voltages. That includes being able to power things like climate-controlled reefer trailers, potentially replacing the noisy and polluting diesel generators traditionally used for this purpose.

Charging and Batteries

Out of Spec BITS/YouTube

Tesla is also working on an updated battery pack design for the final production design of the Semi. This new pack is designed to be more cost-effective to manufacture. The battery pack itself is slightly smaller than before, but the truck maintains the same level of range through efficiencies. Dan also confirmed during his keynote that the battery cells for the Semi will be sourced domestically inside the United States, helping to alleviate potential burdens due to tariffs.

On the charging front, Tesla is using MCS - the Megawatt Charging System - capable of 1.2MW - and designed specifically for Semi. The system uses the same V4 charging hardware found at Supercharger sites but focuses on that larger power output. Alongside a smaller physical footprint, Tesla will be able to configure these V4 cabinets for either dedicated Semi charging or for shared power scenarios with regular Superchargers. Tesla is also working on an integrated overnight charging product, but Tesla isn’t ready to talk about it yet.

46 Semi Charger Sites Coming

The 46 new MCS sites coming soon.

Out of Spec BITS/YouTube

Finally, Tesla has made substantial investments in a public charging network for the Semi. There are currently 46 sites in progress throughout the United States, and plans for significant expansion throughout 2026 and 2027. These sites are strategically located alongside major truck routes and within industrial areas to support long-haul and regional operations. Tesla is aiming to offer the lowest possible energy costs to operators to help incentivize adoption.

This was one of the best updates to the Tesla Semi we’ve received since its initial unveiling. It seems that the Semi will receive a big portion of Tesla’s attention in 2026, while Robotaxi and FSD Unsupervised take the stage this year.

The Tesla Semi has the potential to transform transportation even more dramatically than EVs already have, serving as a testament to Tesla’s mission to electrify the world.

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Tesla’s B-Pillar Sentry Mode Recording Requires HW4, Not Just Ryzen — Breakdown of Spring Update Requirements

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Sentry Mode is an invaluable tool for owners - capable of keeping the vehicle safe and secure even when you’re not around. This is especially true in recent times, with the misguided and unfortunate incidents surrounding Tesla ownership, including damage to Tesla vehicles, showrooms, and Superchargers.

B-pillar Camera Recording and Dashcam Viewer

With the 2025 Spring Update on 2025.14, Tesla is expanding Sentry Mode’s functionality for certain vehicles with some much-needed changes. Sentry Mode and Dashcam can now record footage from the vehicle’s B-pillar cameras. These cameras are located on the side pillars of the vehicle, between the front and rear doors.

This adds two crucially needed viewpoints, making Tesla’s Sentry Mode a truly 360-degree security system. These cameras also provide the best angles for capturing license plates when parked, so they will be greatly appreciated by owners in the event of an incident.

These vehicles are also receiving an improved Dashcam Viewer, which now displays the six camera feeds along the bottom and a new grid view. It also allows users to jump back or forward in the video in 15-second increments.

However, to the disappointment of many owners, not all vehicles are receiving these updates due to the additional processing power needed.

Limited to Hardware 4 Vehicles, Ryzen Isn’t Enough

We have confirmed that Tesla is only adding the additional camera recording and improved Dashcam Viewer on hardware 4 (HW4 / AI4) vehicles. The newer hardware presumably has the additional processing power and bandwidth needed to handle recording and saving the two additional video streams during Sentry Mode and Dashcam.

For the time being, owners of HW3 vehicles are not receiving this feature. This includes all vehicles with HW3, even those with AMD Ryzen infotainment systems. If you’re not sure whether your vehicle has HW3 or HW4, you can refer to our FSD hardware guide.

While there’s no doubt that recording two additional camera streams would be more computationally intensive, we hope that Tesla adds the improved Dashcam Viewer to HW3 vehicles in a future update.

Cybertruck Also Missing Improved Sentry Mode

Surprisingly, and most confusing for many - is the fact that the Cybertruck is also not receiving the improved Dashcam Viewer and B-pillar camera recording with this update. This struck us as odd, especially since the Cybertruck is currently the only vehicle with the improved, more efficient version of Sentry Mode.

Every Cybertruck is equipped with HW4 and AMD Ryzen infotainment units, so this clearly isn’t a hardware restriction. It’s possible the more efficient Sentry Mode is playing a role here due to the infrastructure changes. However, we expect Tesla to address this in a future update and eventually release these features for the Cybertruck as well.

Given the Cybertruck’s high visibility and its status as a frequent target for both positive and negative attention, many owners hoped that the Cybertruck would be one of the vehicles to receive this feature.

Adaptive Headlights

Tesla finally started rolling out its adaptive headlights in North America. While the new Model Y already came with the feature when it was released last month, other vehicles with matrix headlights are now receiving the feature in the Spring Update.

All vehicles with matrix headlights are receiving this feature, which includes the new and old Model 3, first-gen Model Y, and the new Model S and Model X.

If you’re not sure if your vehicle includes matrix headlights, check out our guide. What’s interesting here is that older vehicles that were retrofitted with matrix headlights due to an accident or user replacement are also receiving the adaptive headlights feature.

Legacy Model S & Model X

As with most updates, the older legacy Model S and Model X are not receiving all the features included in this update. Unfortunately, some of the features, which include the Blind Spot Camera on the instrument cluster, Save Trunk Height Based on Location and Keep Accessory Power On are limited to the new Model S and X.

Legacy S and X models will receive the Alternative Trip Plans feature, Avoid Highways (Requires Intel MCU) and the Keyboard Languages feature.

These vehicles are also receiving all the features in the Minor Updates section except for the visualization showing how far the door is opened, which is exclusive to the Cybertruck. These additions include improved music search results, contact photos in the phone app, automatic connecting to hotspots, the ability to show third-party chargers, view Supercharger amenities, and various improvements to music services.

While many users will be disappointed not to receive the B-pillar camera recording and Dashcam Viewer improvements, it’s important to remember that Tesla typically does a great job at bringing features to older vehicles, at least with the Model 3 and Model Y. If a feature isn’t added, it’s usually due to a hardware limitation.

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