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Beezhan Tulu, FullSelfDrive365 @fsdat365 on x 2889 followers
Created: 2025-07-24 01:30:57 UTC
Tesla Q@, 2025 Transcription. Introduction and Opening Remarks
The call begins with Travis Axelrod, Head of Investor Relations, introducing the team including Elon Musk and Vaibhav Taneja. They announce Q2 results and caution about forward-looking statements, referencing SEC filings. Questions are limited to one per person with a follow-up, using a raise-hand feature.
RoboTaxi Launch and Expansion
Elon Musk highlights the successful launch of RoboTaxi in Austin, offering unsupervised rides to paying customers. The service area has expanded and is expected to grow significantly soon, surpassing competitors. Regulatory approvals are being sought for launches in the Bay Area, Nevada, Arizona, Florida, and other areas, aiming to cover half the US population by year-end, subject to safety validations. The fleet and operations are projected to grow at a hyper-exponential rate. In Q&A, it's noted that over XXXXX miles have been operated in Austin with no safety-critical incidents, and expansion to other cities like San Francisco is underway, starting with supervised rides if needed.
Vehicle Sales and Market Performance
Model Y became the best-selling car in several countries (Turkey, Netherlands, Switzerland, Austria) and remains the global top seller. Autonomy, even supervised, is a major selling point. Sales in Europe and China are expected to rise once supervised FSD approvals are obtained, with progress in the Netherlands for EU-wide rollout and efforts to unblock in China. Within the US, FSD experience will improve with reduced attention requirements and upcoming software updates. Production of a lower-cost model started in H1 2025, but ramp-up is delayed to Q4 due to focus on maximizing US deliveries before IRA credits expire. All vehicles are autonomy-capable, setting a new safety standard (10x safer with FSD).
Full Self-Driving (FSD) and Autonomy Improvements
Significant software enhancements are planned, including a 10x increase in parameter count despite hardware challenges like memory bandwidth. Supervised FSD adoption has increased, with a XX% rise since V12 launch and a XX% penetration increase with V12/V13. FSD trials and prompts are being used to educate users. Unsupervised FSD for personal use is expected by year-end in select US geographies, with extreme caution on safety. Cars are already driving autonomously from factories to docks, and full autonomous deliveries to customers in Austin and Bay Area are targeted by year-end.
Tesla Diner Launch
The Tesla Diner in LA has received worldwide attention and is described as a "shiny beacon of hope" in an urban landscape, praised for its unique experience.
Energy Storage Business
Energy growth is strong despite tariffs and supply challenges. Mega Pack capacity is expanding with upgrades, and Q2 saw record Powerwall deployments. Battery demand is seen as gigantic, potentially doubling US energy output by enabling 24/7 power plant operation. Industrial storage is key for AI and data center growth. However, the "big bill" repeals consumer credits by year-end, impacting residential storage demand and profitability. Pipeline remains diversified, with growth in data centers and standalone projects; US manufacturing investments (LFP cells by year-end, new Mega Factory in 2026) aim to mitigate tariffs. Deployments will vary quarterly, but a strong H2 is forecasted.
Optimus Humanoid Robot Development
Optimus design is evolving, with Version X described as exquisite and flawless, featuring all necessary degrees of freedom. Prototypes expected in X months, production starting early 2026, aiming for a million units/year within X years (shocked if not at 100,000/month in XX months). It applies car AI techniques (neural nets for limbs/sensors) and emphasizes Tesla's lead in real-world AI and inference efficiency. Optimus is predicted to be the biggest product ever, transforming from rare to commonplace. Currently performing factory tasks like walking offices and serving at the diner; external sales timeline tied to production ramp, with revenue contribution expected in 2-3 years but material impact later due to initial negative margins.
AI Leadership and Technology
Tesla is highlighted as the best in real-world AI, outperforming competitors like Waymo despite fewer sensors, with top intelligence density (intelligence per gigabyte). Dojo X expected at scale (~100K H100 equivalents) next year; AI5 chip in volume production end-2026, potentially needing nerfing for export restrictions. Convergence planned for Dojo X and AI6 chips for use in cars/Optimus and servers. xAI's Grok is the smartest overall AI but at terabyte scale, contrasting Tesla's smaller, efficient models. No discussion on xAI using Dojo; Tesla-xAI division: xAI focuses on superintelligence, Tesla on real-world AI, aiding recruitment without overlap.
Financial Results and Impacts
Q2 automotive revenue up XX% sequentially (despite XX% delivery growth) due to higher ASP from new Model Y, improving margins despite $300M tariff hit (2/3 in auto). Energy margins improved with higher-profit deployments; services margins rose from supercharging/insurance. OpEx grew from AI investments (employee costs, depreciation); capex >$9B for year on manufacturing/AI. Free cash flow $146M; Bitcoin mark-to-market gain $284M. Near-term challenges from "big bill" (IRA repeal end-Q3, zero emission penalties reducing credits revenue) and tariffs, but AI/robotics/energy position for long-term. Total revenues impacted by lower credits; incentives rolled out but to be pared back.
Regulatory and Policy Changes
The "big bill" repeals $XXXXX IRA EV credit end-Q3, prompting urgency for US orders (limited supply). Emission penalties reduced to zero, lowering regulatory credit sales/revenues. Adverse impacts on energy (early expiration of solar/storage credits), but solar projects expected to continue due to necessity and no alternatives. Tariffs increasing costs (~$300M Q2, fuller impact ahead), managed through US manufacturing.
Q&A on Hardware, Design, and Future Events
No retrofits for Hardware X until unsupervised FSD achieved on Hardware X. Design studio details kept confidential, but exciting products in works; company transforming to post-autonomy era, with new master plan upcoming. xAI investment not discussed here; shareholder proposals encouraged. Potential in-depth AI/Optimus/chip discussion at shareholder meeting, with robots on stage; no AI Day soon due to competitor copying, but aids recruiting.
RoboTaxi Economics and Scaling
Cybercab (optimized for autonomy) targets sub-30 cents/mile cost (gentle ride, efficient design, auto-maintenance via Optimus). Existing fleet higher (~50 cents) but competitive. Material financial impact expected end-2026. Scaling costs funded initially from balance sheet, then debt-financed once recurring revenues established. Non-Tesla vehicles in network possible next year after safety validations (e.g., tire checks), but focus first on Tesla-controlled fleet.
Pricing and Demand Strategy
Pricing used to drive growth while keeping free cash flow positive, but in transition: losing incentives globally, early autonomy stages. Possible rough quarters (Q4-Q2 2026) ahead, but compelling economics post-autonomy scale. Lower-cost models aim not to hurt revenue/margins but increase affordability; leasing to fleet for income (next year) dramatically boosts effective affordability.
Tesla and xAI Relationship
Efforts divided: xAI on terabyte-scale superintelligence models (recruiting those uninterested in Tesla); Tesla on smaller real-world AI. No competition; xAI genesis from engineers preferring ASI over joining Tesla/OpenAI/Google.
XX engagements
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