Tesla Q1 Earnings: Robotaxi in 2024, Cybertruck in 2023, Record profit

By Gabe Rodriguez Morrison
Tesla continues to simplify the manufacturing process
Tesla continues to simplify the manufacturing process

Financial Results

Tesla just reported first-quarter results for 2022 and beat analysts' expectations on the top and bottom lines. Despite factory shutdowns, inflationary pressures and semiconductor chip shortages, the automaker delivered 310,000 vehicles, up 81% YoY.

Revenue also rose 81% to $18.6 billion from $10.39 billion a year ago, thanks to higher average car prices and increased vehicle sales, the company said.

For the period ending March 31, 2022, Tesla reported $3.22 earnings per share. Since posting a record profit, shares have risen as much as 6% in after-hours trading.

Tesla vehicle deliveries since 2018
Tesla vehicle deliveries since 2018

Challenges This Quarter

In its letter to investors, Tesla said supply-chain problems and raw-material prices costs have increased “multiple-fold”.

"Our own factories have been running below capacity for several quarters,” Tesla said in its shareholder deck. The company did not give detailed guidance on deliveries going forward, but said it expects 50% annual growth on a multi-year basis, and warned that supply chain constraints are likely to continue through 2022."

Tesla said that a spike in COVID-19 cases caused a temporary shutdown of the Shanghai factory and shortages in the company’s supply chain.

Tesla had its most profitable quarter
Tesla had its most profitable quarter

“Although limited production has recently restarted, we continue to monitor the situation closely,” the company said.

The ramp-up in the newer Texas and Berlin gigafactories will also depend on supply-chain obstacles, Tesla said.

“Factory ramps take time, and Gigafactory Austin and Gigafactory Berlin-Brandenburg will be no different.”

The company also stated it would release its Full-Self Driving to all U.S. customers that opted for the $12,000 package “before the end of this year.”

Energy

Tesla’s solar deployments dropped by 50% YoY to 48 MW this past quarter. The company deployed 846 MWh of battery storage systems, up 90% YoY, but down from the previous quarter. The company said declines in solar deployments were caused by supply chain constraints on certain components.

Insurance

Tesla says they are the 2nd largest insurer of Teslas in the state of Texas, and could be the largest by the end of next quarter. Tesla is now a fully integrated provider of insurance in the states (list of states) where they have released their insurance product.

Cybertruck and Robotaxi

On the earnings call, Elon confirmed Cybertruck production to begin in 2023 and a vehicle built for autonomy, without a steering wheel or pedals to be produced in 2024 which would be "a massive driver of Tesla's growth."

Elon also reiterated his stance on Tesla's optimus robot, saying that it has more potential opportunity than the car business over time.

When asked about raw materials and scaling to extreme size, Elon stated that Lithium mining is the limiting factor to production. He later said that "Tesla will likely need to help the industry on this."

When asked about the future of EV affordability, Elon stated that the robotaxi will provide the lowest cost per mile of transport ever, a 5x-10x reduction, making it accessible to everyone. Based on their projections, it appears that a robo taxi will cost less than a subsidized bus/subway ticket.

Earnings Overview

Twitter user @DBurkland put together this overview of everything that was discussed during the earnings call.

Opening remarks from Zach Kirkhorn

  • Per unit vehicle costs increased due to inflation, raw material costs, and supply chain constraints
  • Slight shift towards more profitable vehicles like the Model Y
  • Energy business continues to be impacted by macro conditions more than vehicle business (chip constraints)
  • Achieved record operating margin over 19% amidst construction of 2 new factories (Giga Berlin & Giga Texas)
  • Tesla has reduced debt (excluding product debt) to nearly 0
  • Lost 1 month of build volume lost due to COVID-related shutdowns at Giga Shanghai (will dramatically affect Q2 delivery numbers)
  • Inefficiencies of ramping process at Giga Berlin & Texas will affect bottom line
  • Tesla still believes 50% YoY growth w/ vehicle production in 2022 is still achievable

Opening remarks from Elon Musk

  • Record deliveries and production even with many headwinds
  • Even with COVID shutdowns in Giga Shanghai Elon believes they still have a shot at 60% YoY growth for 2022
  • Two new factories opened in Q1 and exponentially ramping (Giga Berlin & Giga Texas) with higher production volumes achievable by end of this year
  • Just crossed 1m units in the last year however long way to go as Tesla aspires to produce 20m units per year (only 5% towards their goal)
  • Elon never more excited for Tesla and their future then he is now
  • Robotaxi
    • Highly optimized for autonomy (no steering wheel or pedals)
    • Numerous other innovations
    • Fundamentally optimized for lowest fully considered cost per mile, accounting for everything (very powerful product)
    • Expect to reach volume production of Robotaxi in 2024
  • CyberTruck
    • On track for volume production in 2023
  • Optimus
    • Elon surprised people weren’t more excited for this but he thinks folks will fully understand its capabilities & impact will be greater than FSD or vehicle businesses
  • Energy
    • Battery & solar production will improve as supply chain issues are resolved

Q&A

FSD Development Progress

  • Elon has never seen more false dawns than with the development of FSD. Real world AI has to be solved for (nobody has solved yet) and with our roads designed for humans, NNs & cameras have to be solved in a way that is on-par with (and exceeds) the capabilities of humans. Elon still believes they will deliver on FSD in 2022. Best way to realize this is participate in FSD beta program and experience it for ourselves as they’ll be expanding the program later this year. Still targeting new FSD release cadence of every 2 weeks.

Giga Shanghai Shutdown

  • Production is coming back with a vengeance and Elon expects weekly production records to be broken as they work to catch up. Still possible to match / exceed Q1 numbers however Q3 & Q4 are expected to be record quarters in terms of production. Elon believes Tesla will easily be able to produce 1.5m vehicles this year.
  • It’s important for new factories to target limited configurations during ramp and that is why both Giga Berlin & Giga Texas are hyper-focused on producing the Model Y.
  • Ramp period (5k per week) takes typically 9-12 months from start of production however it’s possible for Tesla to ramp sooner based on their experience.

Price Increase

  • Elon says it is understandable that there are many folks questioning price increases especially amidst record profitability however the price increases are there to account for an increase in raw materials costs and potential supply chain constraints in the future (since vehicle deliveries are a year out).

State-based Dealership Laws

  • Tesla would love federal-based laws that allows direct sales across the country however congress is not willing to take up this sort of legislation at this time (so Tesla is approaching it on a state-by-state basis)

800V Battery Architecture

  • Tesla is not ignoring the reality that they can go to a higher voltage however there is not any compelling reason to change at this point
  • Going from 400V to 800V might save them $100 per vehicle (however requires changing all of the backend infrastructure)
  • Switching to 800V might make sense down the road however Tesla needs to increase vehicle volume to absorb the cost of moving from 400V to 800V first
  • For larger vehicles where higher power on the battery side and/or charging side is required (where current requirements go up), savings can be seen by increasing voltage as it would reduce semiconductor needs (and thus save $)
    • Tesla is considering different voltages for CyberTruck and Semi
    • For 3, Y, and Robotaxi they see no need to switch

4680 Batteries

  • Tesla is working in all areas that they described during the battery day event and making good progress
  • Going to take several years to achieve the cost savings and performance numbers they described during battery day
  • 4680 structural pack will be competitive with the best alternatives later this year and exceed the best alternatives next year
  • New chemistries hinted at however will be included in 4680 production later on
  • Based on Giga Texas factory construction, the 4680 production equipment cost 5x less than what it would have been with other battery cell designs
    • Cost model well understood, rate and yield will be better understood as they ramp over next few years
  • Giga Berlin will transition to 4680s from 2170s later this year
  • Giga Texas has the capability to produce non-structural pack for 2170s (mitigation)
    • Volume production for 4680s in Giga Texas targeted by end of Q3, for sure Q4
    • Sizable cell inventory thanks to Giga Shanghai shutdown and allows them to be more deliberate in 4680 development (gives them some breathing room during ramp)
    • 4680 production not a risk to achieving vehicle production target in 2022 however would be in 2023

Raw Materials Required To Scale

  • Tesla needs to think about tonnage of Nickel, Iron Phosphate, Graphite, Separators, Electrolytes for the world as a whole
  • Then take action on limiting factors that get in the way of the advent of a sustainable energy future
  • Tesla is thinking about mining & refining Lithium is a current limiting factor and responsible for cost growth per cell as of late (single biggest on a percentage basis)
  • Lithium only makes up only 2-3% of a Li-Ion cell (5kg per car)
  • Cathode (Nickel & Iron Phosphate) is the heaviest in terms of cost and raw materials composition of a battery cell
  • Exciting announcements on the raw materials topic in the months to come, Elon hinted to a follow up call / event
  • Tesla committed to recycling at all cell factories, recycling 50T per week in Reno (ramping to 150T) which is putting materials right back into their Cathode supply chain
  • As they are building new vehicles at new factories, Tesla is recycling everything they can from a raw materials perspective
  • Tesla figured out they can recycle cast aluminum wheels from retired ICE cars and throw it into their aluminum melting pot and use for vehicle body production for 3 & Y
  • Half of Tesla’s products were LFP-based in Q1 2022 which shows how nimble they are regarding battery chemistry
    • Also looking at other cathode options to give Tesla further agility
  • Some of the challenges with Lithium market are not related to supply & demand fundamentals (frustrating to Tesla)

Giga Berlin & Texas Ramping related to Giga Shanghai

  • Elon thinks they need to ramp Berlin & Texas faster than Shanghai as they are more experienced now and have learned so much in the simplification of Model Y production
  • Body line for front & rear cast underbody + structural pack is 60% smaller than it would be otherwise in terms of equipment required
  • If you are waiting for the best Tesla ever you will be waiting forever as they are constantly improving

Robotaxi

  • Unveiling event sometime next year, Elon doesn’t want to go into too many details until then
  • Volume production in 2024
  • Sizable investment required to build robotaxi production lines

Prices Over Time

  • Elon wants to make EVs as affordable as possible however this has become very difficult due to inflation (40-50yr high)
  • Likely to continue for remainder of 2022
  • Long term contracts with suppliers have helped Tesla keep costs down longer than expected but eventually they run out
  • 20-30% cost increase from suppliers over last year which is why Tesla has raised their prices
  • Lithium margins are practically software margins right now (Elon encouraging more to get into this business)

CyberTruck

  • Ignoring battery cells Tesla believes the CyberTruck is made of 20-30% less parts than a typical pickup truck

Giga Nevada

  • Room for expansion there and the plan is to expand production at Giga Nevada further
  • Majority of battery cells will be produced at Giga Texas going forward

COVID Shutdowns in China

  • Elon doesn’t think recent COVID shutdowns in China will negatively impact production elsewhere

Elon compensation

  • No plans or talks to increase Elon’s compensation further

3rd Party Access to Supercharger Network in USA

  • Tesla plans to provide 3rd party vehicle access to the entire world and remains committed to that
  • Tesla is pursuing a technical solution to address the difference in charging connector in the US (magic dock)
  • Growth of Supercharger network is being accelerated to match increase in vehicle production 

Tesla Insurance

  • In state of Texas Tesla is the second largest insurer of Teslas and should be #1 in the next quarter
  • Working to get 80% of states access to Tesla insurance by end of year at which point they’ll look to expand to other markets
  • Having realtime feedback for driving habits (safety score program) is proving helpful to Tesla owners w/ Tesla insurance as it directly relates to a lower rate
  • When a crash happens it gives Tesla a new feedback loop to improve vehicle design, reduce costs, etc (End-to-end visibility)

You can also find outlines from previous earnings calls on his website DBurkland.com.

Tesla Semi to have 500 mile range, to be delivered this year

By Jorge Aguirre
Tesla to release the first Tesla Semis this year
Tesla to release the first Tesla Semis this year
Tesla

Tesla's first electric semi-truck will have a range of 500 miles and begin shipping this year, according to a tweet from Elon Musk, founder and CEO. Musk previously said that the model would be on roads in 2023, as well as Tesla's pickup truck, dubbed the Cybertruck. The projected arrival date for the Cybertruck has not changed.

The Tesla Semi Truck, which was unveiled in November 2017, is designed for long-haul trucking. It can go from 0 to 60 mph in 20 seconds when hauling a full load, which is faster than most diesel trucks.

The Tesla Semi Truck's range of 500 miles on a single charge constitutes more than double the range of the current longest-range electric truck on the market, the Daimler eCascadia, which has a range of 230 miles.

Tesla to release the first Tesla Semis this year
Tesla to release the first Tesla Semis this year
Tesla

The Tesla Semi Truck is also significantly cheaper to operate than a diesel truck, Tesla has said. The company estimates that it will cost $1.26 per mile to operate the Tesla Semi, compared to $1.51 per mile for a diesel truck.

Since the company started taking orders for the truck in 2017 some of the most sizable orders have come from the likes of UPS, Walmart, and PepsiCo. The original deposit required with an order was $5,000, which was increased to $20,000 after the event in November 2017.

Tesla to release the first Tesla Semis this year
Tesla to release the first Tesla Semis this year
Tesla

The company has not said how many trucks it plans to produce but based on past statements from Tesla we can expect the price of regular production versions for the 300-mile (480 km) and 500-mile (800 km) range versions to be $150,000 and $180,000 USD respectively.

Tesla's Semi Truck is part of the company's push to electrify the transportation sector, which is responsible for a significant portion of greenhouse gas emissions. Tesla also makes electric cars and SUVs, and it plans to start producing its electric truck next year. Tesla's ultimate goal is to transition the world to sustainable energy.

Tesla to release the first Tesla Semis this year
Tesla to release the first Tesla Semis this year
Tesla

Tesla Semi Event

Tesla unveiled the Tesla Semi and the Tesla Roadster in late 2017. The entire event is below:

Teslas to report real-time data to help with road closures and traffic issues

Future Feature
By Lennon Cihak
Tesla may be building out a feature for vehicle-to-vehicle communication
Tesla may be building out a feature for vehicle-to-vehicle communication
Ian Maddox

Tesla recently wrapped up its 2022 annual shareholders meeting, and CEO Elon Musk hinted at a potentially exciting feature coming to the fleet: vehicle-to-vehicle communication.

Towards the end of the shareholders’ meeting, a gentleman in the audience mentioned how aircrafts use a system called Airborne Collision Avoidance System (ACAS). He elaborated on how ACAS relays an aircraft’s telemetry to prevent a collision.

“Sometimes too much telemetry,” Musk adds and laughs, assumingly referencing the Twitter account that tracks his private jet.

“Do you see Teslas communicating with one another and Dojo turning into some kind of air traffic control for Tesla supply chains and Robotaxi?” adds the gentleman.

Musk answered by saying he hasn’t thought about that before, which is interesting. He added that the goal with Dojo is to be the de facto computer for training the neural net with videos.

“Oh. That’s an interesting idea. I haven’t thought about that,” Musk responds. “Right now our goal with Dojo is to be really good at video training. We have probably the fourth or approaching the third, most powerful computing center in the world for AI training. Our first goal with Dojo is to make it competitive and be more effective at neural net training than a whole bunch of GPUs. We might get there… soonish.”

Musk also added that Dojo is built “from the ground up” to train AI using videos, and building such a computer has never been done before.

This question got Musk’s mind going. He paused for a moment and said there may be some difficulties in getting Teslas to communicate with one another - and it won’t be needed with Full Self-Driving.

“There will be some merits for Teslas to communicate [with] each other, but that won’t be needed for Full Self-Driving at all,” Musk responds. “But for a long time the vast majority of cars will be manually driven, so the value of Tesla-to-Tesla communication is not that high, except for, perhaps, communicating traffic issues, accidents, potholes, and road closures. A Tesla ahead of you has seen a road closure and you get that real-time update to your car so you don’t get stuck in the road closure situation. That’s the stuff that we are working on right now.”

Elon Musk's Answer

In January of 2022, Twitter user and Tesla enthusiast @BLKMDL3 tweeted at Musk asking about this type of feature. “Hey @elonmusk, can we get the air suspension in Model S/X to automatically raise quickly if the car detects a dip in the road ahead and then remember the location for next time?” BLKMDL3 writes. “Would be an awesome feature to have!”

Musk responded with, “Yeah.”

BLKMDL3’s tweet received quite a bit of attention.

Tesla has recently rolled out updates to improve a vehicle’s ability to raise and lower its suspension when arriving at a specific location. This is so the vehicle doesn’t scuff the pavement and cause damage to its underbody.

Since Musk stated that he hasn’t thought about vehicle-to-vehicle communication or how it would be done, we don’t anticipate this feature rolling out anytime soon. However, we can hope that it gets added to the pipeline of upcoming features due to its seemingly positive reception and want for it. This could also increase the safety of Tesla’s vehicles, even though they’re already the safest cars on the road.

It would be nice for vehicles within a 5-10 mile radius to notify one another of a construction zone, or accident, similar to Waze. This would allow the vehicle to reroute to a more efficient route or handle the situation accordingly. Going a step further, it would be exceptionally cool to see snapshots or videos of the upcoming situation by seeing a “hotspot” in maps, similar to how Snapchat shows hotspots, that are recorded via the vehicle’s cameras to more accurately prepare for it. But this may open a can of worms in regards to privacy.

Turning Tesla’s fleet into a mobile social network may go against Musk’s vision. He’s stated before that any user input in the vehicle should be considered an error, so having an interactive feature such as this may not be in Tesla’s deck of cards.

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View the release notes for the upcoming version 2022.24.1.

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Take a look at features that Elon Musk has said will be coming soon.

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