FSD Beta numbers and everything else revealed at Tesla's Q2 earnings call

By Dan Burkland
Tesla produces its 2 millionth vehicle at Fremont/Nevada
Tesla produces its 2 millionth vehicle at Fremont/Nevada
Tesla

Yesterday Tesla held its second quarter earnings call. Although Elon Musk has previously said he wouldn't be on earnings calls in the future, he did make this one.

As with previous earnings calls, plenty of data and statistics were revealed relating to production, future products, and FSD Beta.

Below is a recap of the entire event, including the Q&A session. The recap was originally posted to dburkland.com.

You can also listen to the earnings call below. The call begins at the 11 minute mark.

Opening remarks from Elon Musk

  • Unique quarter for Tesla due to Shanghai shutdown
  • Production records achieved in Fremont & Shanghai
  • Set up nicely for record breaking 2nd half of 2022
  • Past years have thrown several force majeure at Tesla yet the team continues to overcome
  • Giga Berlin Production Ramp continues with 1000 cars / week in June, Giga Austin to follow with the same number in the next few months
  • Still making cars w/ 2170 cells in parallel and important to note they aren’t dependent on 4680s and will still hit their production numbers 
  • FSD Beta deployed to over 100,000 owners
  • 5-6 years ago they set out to be the best manufacturer in the world
    • Pro-manufacturing mindset has given them a competitive edge
  • Currently make the largest castings in the world
  • As a result of improved manufacturing processes in Berlin & Texas, Tesla has reduced body welding robot count by 70% per unit of capacity
    • Body shop is roughly 3x smaller as it would be otherwise
    • New vehicle bodies are lighter, cheaper, and quieter thanks to reduction in NVH
    • Another level of simplicity and improvements are coming with Cybertruck (as well as future products coming down the road)
  • Intelligent seat belt tensioning based on vision system recently released, first in the industry to do this
    • Can also adjust the airbag deployment as well
    • Delivered via OTA update
    • Will have profound impact on passenger safety
    • Compatible for all HW3-equipped Teslas
  • Cybertruck
    • Production still expected to start middle of 2023
    • “Best product ever” -Elon
  • FSD Beta
    • Planned to be released to all North American customers by end of 2022
    • FSD will then be released to other geos such as Asia and EU soon after pending regulatory approval

Opening remarks from Zach Kirkhorn

  • Made substantial progress in almost every area of the business
  • New production records reached in existing factories and new ones actively ramping
  • Highest solar production volumes in years
  • Temporary shutdown had noticeable impact to vehicle margin
    • Factory ramping also associated with negative impact on vehicle margin
  • Inflation, commodities, and logistics continue to be headwinds
  • Resource constrained on Powerwall and Megapack which should be resolved in the 2nd half of 2022
  • Austin & Berlin operating costs are going down as production ramps up
  • Tesla sold 75% of Bitcoin holdings 
    • They did so as they were uncertain when COVID lockdowns in China would end
    • As a result they wanted to maximize cash position
    • They are still interested in Bitcoin and have not yet sold any Dogecoin
  • Highest operating margins ever at 14.6%
  • Still targeting 50% of growth and still within reach

Q&A

  • Chinese EV Manufacturers & Software Innovation
    • Elon believes Tesla China is the best EV manufacturer in China
    • Chinese car companies will be a force to be reckoned with going forward
    • Tesla has respect for Chinese automakers but believes they have whats necessary to compete
  • Unified Vector Space
    • Unified Vector Space would be if instead of knitting together dynamic & static objects w/ C++ you knit them together at the NN level (meaning you no longer need to reconcile them in C++ heuristics)
    • Architecturally better way
    • Slight improvement in efficiency of FSD stack and something they want to get to
    • Nirvana situation would be to have surround video auto labeling for all static & dynamic objects as well as surround video inference w/ spacial memory
    • Elon believes they have a unified vector space by the end of 2022
    • Elon is also very confident that Tesla will improve the frame rate as they delete legacy NNs and further optimize the FSD software stack
    • The goal is to get FSD Beta to operate at 36fps for all 8 cameras compared to the current 24 frames which will reduce latency when reacting to a dynamic environment
  • Inflation & Future Price Reductions
    • They do not control so therefore Elon says take w/ grain salt but thinks inflation to decrease by end of 2022
    • Carbon, steel, aluminum, etc are trending down in cost which should see impact later in 2022, early 2023
    • Processing of lithium is insanely costly
    • Elon again encouraging entrepreneurs to enter the lithium business as there are, “software margins”
    • “License to print money” -Elon
  • Bitcoin
    • Cryptocurrency is not something Tesla thinks about a lot according to Elon
    • Main goal is production and addressing climate change by making sustainable energy & transport a reality
  • 4680s
    • Structural pack is a monumental step forward from a physics perspective and is the way to go
    • Gained perspective through entering production w/ structural pack Teslas which proved their hypotheses
    • Cost improvements are thanks to solving technical issues and scale
    • They have saved 4-5kg in mass from the early cast Model Y underbodies since their initial production
    • Plan is to reduce mass of castings and to include more parts (and to adapt vehicle to work better with castings)
    • Cybertruck will be another big step in this area
    • Making progress on 4680 production ramp but continuing to leverage supplier cells (2170s) to ramp Giga Berlin & Texas
    • Total production ramp of 4680 packs to 1000 per week by end of the year (preferably earlier)
    • Q2 @ Kato fully automated powder conveyance for the dry anode electrode tool there unlocking major improvements in production & yields too
    • Production as a result has increased 35% MoM since March and yields throughout factory are already at targets or trending towards them
    • Took learnings from Fremont cell & pack lines and built optimized lines in Giga Berlin & Texas
    • Cell design was revved to unlock higher performance and manufacturing simplicity
    • Lines were fully integrated and insourced additional content
    • As a result new challenges for ramping in Giga Berlin & Texas
    • Last quarter cell equipment was fully installed at Giga Texas and they have since produced their first commissioning car sets of 4680s cells
    • The target for Texas is to begin mass producing 4680 cells in Q3 2022 with the goal of being able to exceed the weekly cell production capacity of the Kato battery plant by end of 2022
    • Priority with 4680s initially is simplicity and scale, Tesla was not aiming to include all of the bells & whistles right off the bat
    • As manufacturing goals are achieved they plan to layer in new material technologies into their structural packs (and increase range as well)
    • Currently in regards to 4680s Tesla’s main focus is to remove low hanging issues that would prevent further production ramp
    • Dry electrode anode & cathode are included in the current 4680 process which makes things harder to ramp (yet they continue to achieve success here)
    • Once mass production achieved they plan to quickly iterate w/ an increase in energy density and overall performance soon thereafter
    • Tesla cell production will continue to compliment production volumes from suppliers
    • Fundamental rate limiter for transition to sustainable energy is rate of li-ion battery pack production
      • Not due to scarcity of raw materials, refining lithium in ultra high purity is quite difficult and requires massive amounts of machinery
      • Super difficult to create anode and cathode
      • Elon believes 2/3 of batteries in the future will be iron phosphate, maybe some with manganese
      • Tesla is actively working with suppliers to ramp as quick as possible
    • Tesla is taking action by building their own Cathode plant at Giga Texas as well as taking the plunge into lithium refinement
  • FSD Development Progress & Andrej Departure
    • While Andrej Karpathy will be missed (recent departure), Elon remains very bullish on current team of 120 people in software / AI group and believes that they will solve FSD by end of 2022
    • No major setbacks or delays in FSD timeline should occur as a result of Andrej’s departure
    • Elon believes they will raise FSD price just before they go to wide beta (targeted for end of 2022)
    • Value of FSD is extremely high and not well understood by most people, Elon thinks its ridiculously cheap if promises of performance materialize
  • Semiconductor Supply Chain Constraints
    • Tesla procures about 1600 unique pieces of silicon from 43 different companies
    • Supply chains are more stable w/ latest generation of chips
    • Chips from the analog & mixed signaling space still remain a challenge from a supply chain perspective
    • Supply chain line of sight continues to match planned outputs for both factories (no constraints)
    • Long term contracts already in place for key battery materials and so there are no concerns about future constraints
    • Tesla does not plan to manufacture their own chips however they continue to work with suppliers to ensure future product goals are achieved
    • Chip shortage forced Teslas to delete redundant chips and update software accordingly (big positive in hindsight)
  • Cybertruck
    • Deliveries to begin by the middle of 2023
  • Vehicle Demand
    • Vehicle demand not an issue for Tesla for the foreseeable future
    • No sizable macro impact on demand
    • Difference between value in money and affordability and why you can’t just keep increasing prices
    • Elon feels that they have raised prices to “frankly embarrassing levels”
      • Supply chain and inflation are main culprits for price increases
      • Elon is hopeful Tesla can reduce prices soon
    • Elon thinks its achievable to produce 40,000 vehicles per week by end of 2022
      • Teslas has already produced 30,000 vehicles per week many times, 40,000 vehicles per week is definitely in reach
      • Plan is to get Giga Berlin & Texas to ramp to 5,000 vehicles per week by end of 2022 and 10,000 vehicles per week by end of 2023
    • Elon reaffirms that Tesla does not have a demand problem but instead a production problem
  • Elon’s Role At Tesla
    • If there is only good news Elon won’t plan to join the future earnings calls
    • Elon is committed to working at Tesla as long as he can continue to help advance the company
  • AI
    • Elon didn’t want to steal thunder from AI day so he will save the news / updates regarding Dojo & Optimus for then

You can follow Dan Burkland on Twitter at @DBurkland.

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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