“I see a path. I’m not saying it’s an easy path but I see a path of Tesla being the most valuable company in the world by far.” – Elon Musk
In this article we’ll look at how Tesla’s value is immense, as what Tesla is building will improve efficiency in all areas of human life, and do it at scale, making it affordable. Elon Musk outlined much of this is in this Shareholder meeting, so although he did not make mention of Master Plan 3, this was a big progress report on Master Plan 3.
Elon’s conversation focused on manufacturing at scale, AI, and robotics. Note: This is the January 29, 2025, Tesla Annual Shareholder Earnings Call.
Elon is More that Doubling Investments in Tesla
“Doubling is not even enough. We made many critical investments in 2024 in manufacturing, AI and robotics that will bear immense fruit in the future.” – Elon Musk
When discussing Tesla’s Full Self-Driving (FSD) technology, Elon emphasized its market impact, saying, “I think the interest level from other manufacturers to license FSD will be extremely high once it is obvious that unless you have FSD, you’re dead.”
The Misconception of Easy Production vs. the Reality
Elon: “Yeah, prototypes are trivial basically. Prototypes are easy, production is there for many years. The problem is there’s like those who have never been involved in production or manufacturing somehow think that may — once you come up with some eureka design, that you magically can make 1 million units a year, and this is totally false. There needs to be some Hollywood story or where they show actually the problem is manufacturing.”
Hollywood Does Not Make Movies Like This, But They Should
Elon: “I’ve never even heard of one (Hollywood story that shows how to win at manufacturing). It just doesn’t fit the narrative. The Hollywood thing is like some lone inventor in a garage goes EUREKA! And suddenly, it files a patent, and suddenly, there’s millions of units. And like I’m listening to the guys, we’re missing really 99% of the story. One percent is — a product is 1% inspiration, 99% perspiration. Hollywood shows you the 1% inspiration and minus — but forgets about the 99% perspiration of actually figuring out how to make that initial prototype manufacturable and then manufacture at high volume such as reliable, low cost, consistent, and doesn’t break down all the time and that is 100 times more difficult at least than the prototype.”
Austin, Texas Will Experience Unsupervised Full Self-Driving as a Paid Service in June
“In fact, it could drive you. It’s a self-driving wolf.” – Elon Musk
Elon’s timeline was a surprise for many, as he plans to initially launch unsupervised FSD in Austin in June. For me personally, it makes sense. I live in Austin, use FSD everyday, it works astonishingly well!
“We’re going to be launching unsupervised full self-driving as a paid service in Austin in June.” – Elon Musk
Elon: “And I am like — setting up for what I think will be an epic 2026 and a ridiculous ’27 and ’28, ridiculously good. That is my prediction. As you know, very few people understand the value of self-driving and our ability to monetize the fleet. Some of these things I’ve said for quite a long time, and I know people have said, Well, Elon, the boy who cried like a wolf like several times. But I’m telling you, there’s a damn wolf this time and you can drive it. In fact, it could drive you. It’s a self-driving wolf.
For a lot of people, like their experience of Tesla Autonomy is like if it’s even a year old, if it’s even two years old, it’s like meeting someone when they’re like a toddler and thinking that they’re going to be a toddler forever. But obviously not going to be a toddler forever. They grow up. But if their last experience was like, Oh, FSD was a toddler. It’s like, well, it’s grown up now. Have you seen it? It’s like walks and talks. And that’s really what we’ve got.
And it’s difficult for people to understand this because human intuition is linear as opposed to what we’re seeing is exponential progress. So, that’s why my No. 1 recommendation for anyone who doubts is simply try it. Have you tried it? When’s the last time you tried it? And the only people who are skeptical, the only people who are skeptical are those who have not tried it.”
When addressing a question about discussions with other auto companies regarding the licensing of Tesla’s FSD, Elon explained there is interest.
Interest in Tesla’s Autonomous Tech
Elon: “Yeah. What we’re seeing is at this point, significant interest from a number of major car companies about licensing Tesla full self-driving technology.”
Analyzing Tesla’s Hardware
Elon: “What we’ve generally said is the best way to know what to do is take one of our cars apart. And then you can see where the placement of the cameras are, what the thermal needs are of the Tesla AI inference computer.”
Optimus Development Timeline
Elon: “With regard to Optimus, obviously, I’m making these revenue predictions that sound absolutely insane, I realize that. But they are — I think they will prove to be accurate. Now with Optimus, there’s a lot of uncertainty on the exact timing because it’s not like a train arriving at the station for Optimus. We are designing the train at the station and in real time while also building the tracks.”
Production Goals for Optimus:
Elon: “The normal internal plan calls for roughly 10,000 Optimus robots to be built this year. Will we succeed in building 10,000 exactly by the end of December this year? Probably not, but will we succeed in making several thousand? Yes, I think we will. Will those several thousand Optimus robots be doing useful things by the end of the year? Yes, I’m confident they will do useful things.”
Feedback Loop for Optimus Development
Elon: “Those Optimus in use at the Tesla factories for production design 1 will inform how we will change for production design 2, which we expect to launch next year.”
The Immense Scaling of Optimus
Elon: “And our goal is to ramp up Optimus production faster than maybe anything has ever been ramped, meaning like aspirationally in order of magnitude, ramp per year. Now if we aspire to an order of magnitude ramp per year, perhaps, we only end up with a half order of magnitude per year. But that’s the kind of growth that we’re talking about. It doesn’t take very many years before we’re making 100 million of these things a year if you go up by let’s say, a factor by 5x per year.”
How Tesla Solved Challenges in Developing Optimus
Elon: “But we do need to be — this is an entirely new supply chain, it’s entirely new technology. There’s nothing off the shelf to use. We tried desperately with Optimus to use any existing motors or any actuators, sensors. Nothing worked for a humanoid robot at any price.”
Custom Design for Optimus
Elon: “We had to design everything from physics-first principles to work for a humanoid robot and with the most sophisticated hand that has ever been made before by far. Optimus will be also able to play the piano and be able to thread a needle. I mean, this is the level of precision no one has been able to achieve. And so, it’s really something special.”
Future Value of Optimus to Tesla
Elon: “So, yes. And my prediction, long term, is that Optimus will be overwhelmingly the value of the company.”
Additional Statements on Optimus
Elon: “Optimus is not design-locked. So, let’s say like we’re designing the train as it’s going to — we’re redesigning the train as it’s going down the tracks while redesigning the tracks and the train stations.”
Vision for Optimus
Elon: “I’d like it to be the beginning of next year but maybe it’s more like the middle of next year,” (referring to the launch of an enhanced version of Optimus)
Elon: “The current line that we’re designing is for roughly 1,000 units a month of Optimus robots. The next line would be for 10,000 units a month. The line after that would be for 100,000 units a month.”
Elon: “I think probably with Version 2, it is a very rough guess because there’s so much uncertainty here, very rough guess that we start delivering Optimus robots to companies that are outside of Tesla in maybe the second half of next year, something like that.”
Elon: “But like I said, this is such an exponential ramp that it will go from no one’s receiving humanoid robots to these things like coming out like crazy. We can’t build enough. We’re always going to be in the — we can’t build enough situation. Demand will not be a problem even at a high price.”
Elon: “And then I said like, once we start — once we’re at a steady state of above 1 million units a year, I think the production — I’m confident at 1 million units a year, that the production cost of Optimus will be less than $20,000.”
Elon: “If you compare the complexity of Optimus to the complexity of a car, so just the total mass and complexity of Optimus is much less than a car. So, I would expect that at similar volumes to say the Model Y, which is over 1 million units a year, that you’d see Optimus be, I don’t know, half the cost or something like that.”
Elon: “What the price of Optimus is a different matter. The price of Optimus will be set by the market demand.”
Utility of Autonomous Cars
“Once that car is autonomous, my rough estimate is that it is in use for at least a third of the hours per week, so call it, 50, maybe 55 hours of the week.” – Elon Musk
Current Utilization of Passenger Cars
Elon: “So, a car goes — a passenger car typically has only about 10 hours of utility per week out of 168, a very small percentage.”
Projected Increase in Car Utility with Autonomy
Elon: “Once that car is autonomous, my rough estimate is that it is in use for at least a third of the hours per week, so call it, 50, maybe 55 hours of the week. And it can be used for both cargo delivery and people delivery. So, even, let’s say, people are asleep but you can deliver packages in the middle of the night or resupply restaurants or whatever the case may be, whatever people need at all hours of the day or night.”
Economic Impact of Autonomous Vehicles
Elon: “That same asset, the thing that — these things that already exist with no incremental cost change, just a software update, now have five times or more the utility than they currently have. I think this will be the largest asset value increase in human history. Maybe there’s something bigger but I just don’t know what it is. And so, people who would look in the rearview mirror are looking for past precedent, except I don’t think there is one.”
Everyone Should Try Autonomous Driving
Elon: “So, look, the reality of autonomy is upon us. And I repeat my advice, try driving the car or let it drive you. So, now it works very well in the U.S., but of course, it will, over time, work just as well everywhere else.”
Tesla’s Growth Plans: Batteries
Elon: “Yes, so we’re working hard to grow our annual volumes. Our current constraint is battery packs this year but we’re working on addressing that constraint. And I think we will make progress in addressing that constraint. And then things are really going to go ballistic next year and really ballistic in ’27 and ’28.”
Advancement in Full-Self-Driving (FSD) Technology
Elon: “So, a bit more on full-self-driving. Our Q4 vehicle safety report shows continued year-over-year improvement in safety for vehicles. So, the safety numbers, if somebody has supervised full self-driving turned on or not, the safety differences are gigantic. And people have seen the immense improvement with Version 13, and with incremental versions in Version 13 and 14 is going to be yet another step beyond that, that is very significant. We launched the Cortex training cluster at Gigafactory Austin, which was a significant contributor to FSD advancement.”
Training Infrastructure for AI/Optimus Development
Elon: “And we continue to invest in training infrastructure out of Texas headquarters. So, the training needs for Optimus humanoid robot, are probably at least ultimately 10x of what is needed for the car, at least to get to the full range of useful role. You can say like how many different roles are there for a humanoid robot versus a car? A humanoid robot has probably 1,000 times more uses and more complex things than in a car. That doesn’t mean the training scales by 1,000 but it’s probably at 10x.”
Economic Potential of Optimus Robots
Elon: “Now you can do this progressively, so it doesn’t mean like Tesla’s going to spend like $500 billion in training computer because we will obviously train Optimus to do enough tasks to match the output of robots. And obviously, the cost of training is dropping dramatically with time. But it’s one of those things where I think long-term, Optimus has the potential to be north of $10 trillion in revenue, like it’s really bananas. So, that you can obviously afford a lot of training compute in that situation.”
Investment vs. Revenue in AI Training
Elon: “In fact, even $500 billion training compute in that situation will be quite a good deal. Yes, the future is going to be incredibly different from the past, that’s for sure. We live at this unbelievable inflection point in human history.”
Proof of Concept for Unsupervised FSD
Elon: “So, yes, so the proof is in the pudding. So, we’re going to be launching unsupervised full self-driving as a paid service in Austin in June. So, I talked to the team. We feel confident in being able to do an initial launch of unsupervised, no one in the car, full self-driving in Austin in June. We already have Teslas operating autonomously unsupervised full self-driving at our factory in Fremont, and we’ll soon be doing that at our factory in Texas.”
Operational Details of Autonomous Vehicles at Factories
Elon: “So, thousands of cars every day are driving with no one in them at our Fremont factory in California, that we’ll soon be doing that in Austin and then elsewhere in the world, the rest of our factories, which is pretty cool. And the cars aren’t just driving to exactly the same spot because, obviously, they want to collide at the same spot. The cars are actually programmed with where — with what lane they need to park into to be picked up for delivery. So, the drive from the factory end of line to their destination parking spot and to be picked up for delivery to customers and then doing this reliably every day, thousands of times a day.”
Timeline for Unsupervised FSD in Public
Elon: “It’s pretty cool. Like I said, these Teslas will be in the wild with no one in them in June in Austin. So, what I’m saying is this is not some far-off mythical situation. It’s literally five, six months away, five months away kind of thing.
Approach to Safety and Expansion
Elon: “And while we’re stepping — putting our toe in the water gently at first just to make sure everything is cool, our solution, our sort of solution is a generalized AI solution. It does not require high precision maps of locality. So, we just want to be cautious. It’s not that it doesn’t work beyond Austin. In fact, it does. We just want to put our toe in the water, make sure everything is OK, then put a few more toes in the water, then put a foot in the water with safety of the general public as and those in the car as our top priority.”
Energy Storage as a Critical Asset
Elon: “Regarding energy, energy storage is a big deal and will become — really super important, will become incredibly important in the future. And it is something that enables far greater energy output to the grid than is currently possible because the grids are — the vast majority of the grid has no energy storage capability.”
Impact of Energy Storage on Grid Efficiency
Elon: “So, they have to design the power plants for very high peaks and assuming that there’s no energy storage. Once you have grid energy storage and home-based energy storage, the actual total energy output per year of the grid is dramatically greater than people think. Maybe it’s at least double. This will drive the demand of stationary battery packs and especially the grid-scale ones to and saying basically as much demand as we can possibly make.”
Tesla’s Expansion of Big Battery Production: Shanghai and Another 3rd Factory
Elon: “So, we have our second factory, which is in Shanghai, that’s starting operation, and we’re building a third factory. So, we’re trying to ramp output of the stationary battery storage as quickly as possible.”
Balancing Battery Demand Between Sectors
Elon: “Now there is a challenge here where we have to be careful — that were not robbing from 1 pocket to take to another pocket because for a given gigawatt hours per year of the cell output, does it go into stationary applications or mobile applications? It can’t go both into both so we have to make that trade-off, yes. But overall, the demand for total gigawatt hours of batteries, whether mobile or stationary, that will grow in a very, very big way over time.
For context, Tesla navigates between:
Stationary Applications: These include batteries for energy storage solutions that support homes, businesses, and the grid, particularly vital for managing renewable energy sources like solar and wind, which produce energy intermittently.
Mobile Applications: Here, the focus is on electric vehicles, where batteries are essential for vehicle operation, directly impacting Tesla’s automotive business.
Elon metaphorically described the situation as “robbing from one pocket to take to another,” emphasizing the need for strategy to ensure neither sector suffers from resource scarcity. The decision on where to allocate batteries involves complex trade-offs based on current market demand, potential profitability, and strategic long-term goals.
Significance of 2025 in Tesla’s Timeline
Speaking of the year 2025, Elon said “In fact, I think it probably will be viewed ’25 as maybe the most important year in Tesla’s history.
Tesla’s Dominance in Real-World AI
Elon: “There is no company in the world that is as good in real-world AI as Tesla. I don’t even know who’s in second place. Like you say, like, who’s in the second place for real-world AI? I would need a very big telescope to see them. That’s how far behind they are.”
Tesla’s Q4 and Full Year Earnings Calls from 2021, 2022, 2023 by Gail Alfar
(Austin, Texas) Every quarter I write about Tesla’s earnings calls, and this time I asked Grok to help come up with a headline. I laugh because in this call Elon Musk talked about the growth of cells into a baby. You’ll never guess the funny headline Grok came up with: “Tesla’s Metamorphosis: Elon Musk’s Plan for a Leaner, Meaner, and More Efficient Future”
This first earnings call of 2024 took place on April 23. I am highlighting some of the best and most interesting parts of the call for you. So take a little breather in your busy day. Let’s hang out for a few.
Tesla’s Roadmap
Elon talked, sharing his opening remarks at the start of the earnings call. He shared an inspiring vision for the future of all-electric and autonomous vehicles on earth. Despite facing various challenges, including global EV adoption pressure and other manufacturers’ shift towards plug-in hybrids, he said Tesla remains committed to its goal of electric vehicles dominating the market. Elon highlighted Tesla’s achievements and future plans, emphasizing rapid progress in AI and the expansion of Tesla’s AI infrastructure.
The Tesla team successfully navigated a tough environment in Q1, with energy storage deployments reaching an all-time high. Elon announced an acceleration in the launch of new models, including more affordable options, that will be produced on the current manufacturing lines. This welcome move is expected to increase vehicle production capacity to over 3 million units.
Regarding Full Self-Driving (FSD) Version 12, Elon expressed confidence in the vision-based approach with end-to-end neural networks as the solution for scalable autonomy. Tesla has reduced the subscription price to $99 per month to encourage more users to experience FSD.
Tesla’s core AI infrastructure is also undergoing significant expansion, with plans to install and commission 85,000 H100 computers by the end of the year. Elon stressed the importance of not only increasing the number of H100s but also ensuring their efficient use for training.
As with many Tesla earnings calls, some of the best information comes after the opening remarks!
Biology Lesson in Tesla Restructuring
You may know that some employees were laid off from Tesla. Nearly 10% of the company. Elon explains the Tesla restructuring using a biology lesson, which most people loved hearing,
“We are not giving up anything that significant that I’m aware of. We’ve had a long period of prosperity from 2019 to now and so if a company sort of organizationally is 5% wrong per year that accumulates to 25% – 30% of inefficiency.
We’ve made some corrections along the way, but it is time to re-organize the company for the next phase of growth. And you really need to re-organize it.
It is just like a human when we start off as one cell and become a zygote, a blastocyst, and you start growing arms and legs and then briefly you have a tail and then you shed the tail and then you’re a baby and you know, you basically have to be different.
The organism of a company is kind of like a creature growing and if you don’t reorganize it for different phases of growth, it will fail and you can’t have the same organizational structure if you’re 10 cells versus 100 versus 1 million versus 1 billion versus 1 trillion.
We humans are around 35 trillion cells, it doesn’t feel like one person but you’re basically a walking cell colony of roughly 35 trillion cells depending on your body mass and about 3 times that number in bacteria.
So, anyway, you’ve got to reorganize the company for a new phase of growth or it will fail to achieve that growth.”
Cybercabs: Ultimate Multitasking Machines – Earn Money While You Sleep and Share Your Ride with a Tap
On the call, Elon explained that in the future, you can add (or remove) your Tesla to the robotaxi network (using Tesla app) when you’re at work and you can choose to share your car with friends or family or 5-star customers only.
The new term “Cybercab” was applied to this vehicle. I think this blends an iconic image (a cab) with the modernistic cyber mystique. This name has a charming vintage feel while also being easy to pronounce. Cybercab rolls off the tongue, while Robotaxi feels more awkward.
Cars will soon work like elevators. You hop in, it takes you where you want, you don’t think twice about it. Tesla will be operating the fleet of Cybercabs and you will be able to decide if you want to have your Tesla inside the fleet for a day or a month or a year.
To help explain the concept, Elon compared it to an AirBNB.
“And something I should clarify is that Tesla will be operating the fleet. So, you can think of like how Tesla, think of it as combination of Airbnb and Uber meaning that there will be some number of cars that Tesla owns itself and operates in the fleet. There will be some number of cars and then there’ll be a bunch of cars where they’re owned by the end user. That end user can add or subtract their car to the fleet whenever they want, and they can decide if they want to only let the car be used by friends and family or only buy five-star users or by anyone at any time they could have the car come back to them and be exclusively theirs like an Airbnb.
You could rent out your guest room or not, any time you want.”
Tesla’s Idle Computing Revolution
Every Tesla car has a computer inside itself that’s capable of computing and inference.
Elon hopes that one day soon you can opt to rent out your Tesla computer to do distributing inference whenever it’s idle, when you’re sleeping, for example.
Elon envisions a future where the fleet of Tesla vehicles could collectively form a massive distributed inference system with their idle computing power. This would allow for efficient use of resources and potentially generate revenue for Tesla owners by participating in tasks like AI model training or other computational tasks. The idea is to leverage the vast number of Tesla vehicles worldwide, harnessing their collective computing power for various AI-related tasks.
The concept of distributed computing is not new, but applying it to a fleet of Tesla vehicles is a novel approach that could have significant implications for AI research, development, and deployment.
So, your Tesla can make money for you when you’re sleeping. This is analogous to Amazon’s Web Service which is currently the biggest cloud computing service provider in the world and the most profitable business segment for Amazon. Elon explained, “I think it’s analogous to Amazon Web Services, where people didn’t expect that AWS would be the most valuable part of Amazon when it started out as a bookstore. So, that was on nobody’s radar. But they found that they had excess compute because the compute needs would spike to extreme levels for brief periods of the year and then they had idle compute for the rest of the year. So, then what should they do to pull that excess compute for the rest of the year.
That’s kind of — yeah, monetize it. It seems like kind of a no-brainer to say, OK, if we’ve got millions and then tens of millions of vehicles out there where the computers are idle most of the time that we might well have them do something useful.”
Name any other car that has those potentials and capabilities. Let that sink in.
Elon’s Tesla Future: Increased Involvement
“Tesla constitutes the majority of my work time. I work every day of the week. I’m going to make sure Tesla is very prosperous.” – Elon
Indeed, Elon or any of the executives at the earnings call are not obligated to answer questions. The format of the earnings call is a choice by Tesla. Being able to ask Elon Musk directly if he plans to remain involved in Tesla less in the next 3 years was a question that was asked. Elon is the heart and soul of the company, and Tesla, Inc. is like his own child. Of course, he will stay involved and maybe even increase his involvement. You see, Elon was always deeply passionate about autonomous cars and with this happening now, he is going to show MORE, and not less involvement.
“We are putting the actual auto in automobile.” – Elon
Elon is happy to always allow cars to have a bright future with autonomy at Tesla. If he IS VOTED out of the company one day, he will not support Optimus development which is out of his control because there is a risk that the robot could veer towards malice. For context, a judge in Delaware used her power to take away his shareholder-approved compensation plan. If that compensation is not legally returned to Elon, he will not own enough shares of Tesla to make an impact on Optimus development and he could even be pushed right out of the very company he built as a worst-case scenario.
Autonomy: Tesla’s Future Licensing
In the future, 3 years ahead, the only cars that you will drive will be genuinely smart cars with autonomy. All cars will need to be smart cars or they will not be purchased. At that point, Tesla will license their autonomy software to all other surviving companies. Elon explains,
”Yeah. So, it is a case of having them use the same cameras and inference computer and licensing our software. Once it becomes obvious that if you don’t have this in a car, nobody wants your car. It’s a smart car. I still remember in fact, when Nokia was king of the hill, yeah, and the cellphone is crushing. And then I saw them come out with a smartphone that was a brick with limited functionality. And then the iPhone and Android, people still do not understand that all the phones are going to be that way. There’s not going to be any flip phones. There will be a niche product or home phone.”
My thoughts
Tesla cars need to be affordable to the vast majority of people. Tesla is doing this and this is good news as more and more people will be able to afford to buy a Tesla.
This price is already dropping right before our eyes. For example: My 2024 Model Y is vastly better than my 2022 Y and it cost me less to purchase by around $18,000! The single motor Model Y is only $29K with gas savings and with point of purchase $7500 rebate. An incredible value.
It is indeed exciting that we are headed for an electric vehicle and autonomous future!
Isn’t it crazy that many carmakers are pulling back on their investments in EVs? Only Tesla is investing the most in future growth. This includes their AI programs, production capacity, Supercharger & service networks as well as new product infrastructure.
The future is not only electric but also autonomous. Since the launch of FSD V12 earlier this year, I have personally driven across Austin, Texas over 100 times and V12 is indeed an incredible advancement. I have now produced over 60 FSD Tesla podcast episodes (Gail’s Tesla Podcast), constantly spreading the word to my viewers (in the 100,000’s) about Tesla autonomy. I’ve shown that FSD Supervised is for every driver, no matter their knowledge of tech or their ability to understand how it actually works. In fact, if you want to just say that it works like magic, that’s totally acceptable because that is how I feel about it too!
(Austin, Texas) In this episode, we will listen to some short clips of Elon Musk talk about Cybertruck and FSD beta progress (from the Tesla Q3 earnings call 2023) towards becoming available globally. All the while we’ll be experiencing a perfect drive during rush hour around Austin.
Safety around cyclists with Tesla AI
One striking portion of this podcast occurs when a bicycle team of at least 6 people moves quickly toward a crosswalk at the very same moment the Tesla (on FSD BETA) is approaching the crosswalk.
Tesla AI safety around bicycles.
The driver (me) hears a warning beep inside the Tesla, but there is no need to disengage. The FSD AI has seamlessly moved in front of the crosswalk while all cyclists safely pass behind the car.
Welcome to my 35th podcast episode, we will listen to some clips from Q3 Tesla earnings call, as well as experience a zero disengagement drive through challenging traffic in atx. Enjoy and have a great night! 🌙 pic.twitter.com/3jecmLUdHr
Gail Alfar, author. Exclusive to What’s Up Tesla – All Rights Reserved. My goal as an author and podcaster is to support Tesla (the most American vehicle manufacturer) and Elon Musk in both making life better on Earth for humans and becoming a space-fairing civilization.
Tesla is doing a lot of good in this world, much of which was shared in the Tesla Q2 2023 Update on July 19, 2023. I hope you enjoy this article, and that it leaves you with optimism & hope for the future!
(Austin, Texas) On Investor Day 2023, Elon Musk and the Tesla team explained how a global sustainable economy is within reach through these six actions:
1. Repower the Existing Grid with Renewables
2. Switch to Electric Vehicles
3. Switch to Heat Pumps in Residential, Business & Industry
4. Electrify High Temperature Heat Delivery and Hydrogen Production
5. Sustainably Fuel Planes & Boats
6. Manufacture the Sustainable Energy Economy
I’m confident that many companies around the world are making progress towards these actions and I believe Tesla is showing and leading the way!
REPOWER THE EXISTING GRID WITH RENEWABLES
Success is imminent in this arena. Thus far, ½ million Tesla Powerwalls have been installed on homes by customers. I personally installed 3 Powerwalls recently and am excited to be a part of what will make Texas become a strong force in the energy economy. I believe that being solid in energy, or defying the odds in these times of climate extremes, means Texas can lead. Last year, I spoke to the ERCOT board of directors in Texas, urging the leadership to do everything they can to promote Virtual Power Plants (VPPs) in Texas. I watched the Tesla Energy team spend years getting to the point where they are now in Texas. Tesla Electric started in Texas and will one day reach to all states.
VPP regulatory challenges are hard, as mentioned during the Tesla Q2 2023 Update, and that cannot and does not stop Tesla Energy from meeting the challenges. The best case for VPPs is they are much cheaper and much faster to respond to grid weakness than traditional fossil fuel peakers.
ENERGY AND SERVICES & OTHER BUSINESSES
Tesla has deployed 3653 MWh of energy storage Megapacks. This is an incredible 222% increase over last year, where 113 MWh were deployed. This is a testament to the incredible work of the Megapack manufacturing plant in Lathrop, California.
The current Tesla Electric pilot program for charging for Model 3 owners will expand to all Tesla owners in Texas later this year.
SWITCH TO ELECTRIC VEHICLES
Image Model Y credit Tesla, Inc.
When looking at the current business, Tesla’s number one priority is investment, and that includes investment AI and capacity expansion. The second top priority is to maximize volume in a way that can support expansion.
Has volume been expanding? Yes, Elon Musk thanked Tesla owners for making the Model Y become a best-seller over cars like the Toyota Corolla. This is important, given Tesla is just getting started with production at scale because Tesla will maximize volume in a way that can support even more expansion. Tesla had the best-ever vehicle production and deliveries in a single quarter, with a total of 466,140 deliveries, and they are just getting started!
— Remember, in Q2-2022 (just 12 months ago), there were a total of 254,695 vehicle deliveries.
To accelerate the switch to EVs, Tesla makes Full-Self driving (FSD) software and hardware available to other OEMs. It is now known that Tesla is in serious talks with another OEM to license their FSD software and hardware. This is exciting news as it means it will make that other carmaker an alluring competitor to other traditional gasoline cars.
SUPERCHARGING AND THE NACS
As you may know, Supercharging in the Tesla Network is a seamless experience. The Tesla Charging standard – or the “NACS” is part of Tesla’s way to help accelerate the EV revolution. Many other automakers have already announced they will adopt the NACS so that their EVs can supercharge in the Tesla Network. This includes Ford, Mercedes, Rivian, Volva, Polestar, and Nissan! You’ll see a level playing field, meaning all EVs will be welcomed.
Q3 is an important time for doing some critical upgrades to all of Tesla’s gigafactories. These upgrades will mean that production rates will improve dramatically.
Elon explained the real-time pulse updates he gets. He said there are challenges in increasing interest rates, making it important to therefore decrease the price of the car to make up for increased interest rates.
ROBOTAXI
Elon Musk carefully explained that “Every car may be worth 5X as much as today due to autonomy.” He compared Robotaxi to Airbnb and discussed a step-change in history.
Elon Musk on vehicle order intake: “Demand has roughly tracked production, which is what we aim for; we have real-time demand and real-time production data.”
Lars Moravy of Vehicle Engineering said there’s a misconception about giga castings, which are in Model 3 and Y. Giga casting is 3X faster and much cheaper. Collision repair is in a closed (in-house) loop so when collisions occur, inserts can be replaced in the castings and this is done often and easily.
Elon commented that the referral program is and will continue to be effective. He also said that many people (potential customers) are not breaking even every month, and macroeconomic conditions are impossible to control. He’s correct, I have spoken to many people who struggle every day to meet bills. Elon is well aware of this and thankfully is engineering solutions for people.
Giga Texas 4680 battery cell production increased by 80% in Q2 over Q1. The Giga Texas team produced over 10M cells, there was a beautiful image shared of the team by the Tesla X account.
Tesla is creating a unique Cybercell to bring energy density and cost improvements. Drew Baglino, SVP of Powertrain and Energy Engineering at Tesla, said Tesla is scaling their Cybercell 4680 battery for use in Cybertruck.
Elon Musk has been key to Cybertruck’s engineering and development, walking the production line and driving it around Austin, Texas. He said Cybertruck is the first truck that we’re aware of that will have four doors, over a 6-foot bed, and will fit into a 20-foot garage. So, it’s sort of biggest on the outside, but it’s even bigger on the inside.”
In more good news, Tesla has seen a reduction in pricing, across the across-the-board for all commodities, such as nickel, cobalt and graphite. This is good not only for Tesla but also for many other companies involved in the transition to a sustainable energy economy.
CONCLUSION
Finding ways to power our world with sustainable energy is necessary for maximum happiness for humanity.
While short-term stock fluctuations are fun to play with, that’s like candy in a candy shop. The serious meat is accelerating the transition to a world economy that is powered by sustainable energy. That’s why this article is about what progress is being made towards Master Plan 3, as communicated by Elon Musk and Tesla leadership at the Q2, 2023 Update.
I am rooting for a continued switch to heat pumps in residential, business & industry, the electrification of high-temperature heat delivery and hydrogen production, and sustainably fueled planes & boats.
Giga Texas Cybertruck Production Line, Image Credit Tesla, Inc.
Elon Musk recommends people follow @fintwit_news on X and look at the analysis by ARK Invest. Article by Gail Alfar, please credit accordingly.
Welcome back to my blog. It’s been 12 months since I first rented a shared office space to start “What’s Up Tesla.” I am committed to doing more to support the mission of Tesla and Elon Musk, as there is a long road ahead. In the coming year, I’ll keep dedicating time to this blog and my Podcast as we watch Tesla move with success through uncertain times and prove they are the only OEM that will thrive in 2023 and beyond.
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