what Tesla said today... $TSLA

everyone kevin here so here's a complete breakdown of what we learned

from the tesla earnings call so it's a summary of it the first elon musk came

out talked about uh the highest demand that

we have ever seen for vehicles at a tesla that

the model 3 at tesla is on pace to produce 250

000 vehicles uh current well it's actually producing 250

000 vehicles at its current rate and its rate will be at 500

000 model 3s per year next year so that rate of production from model 3s

is expected to double the model 3 currently one of the best or

actually the best selling uh premium sedan in the world

but expecting the model y elon said this to become the best selling vehicle of

any time next year but more likely by 2023

beating all other cars or trucks great progress on

a full self-driving we'll talk more about that later elon talked about some

of the challenges about how you need a very powerful computer

using only 70 to 80 watts talked about the how important of a step it is to

eliminate the crutch of having radar as a tool that you use to sort of

back up your uh visual or vision systems

in the autonomous systems so elon wants a superhuman

stereo video autonomous system that can basically look at eight cameras

35 frames per second data all at the same time and then with

context of all the cameras coming together at the

same time be able to label what's going on surrounding the vehicle and make

decisions without the use of a radar or certainly

lidar the word lidar wasn't even mentioned

once on the call he talked a little bit about some difficulties regarding this

also talked about some of the difficulties regarding the model s and x

about how there were more challenges than expected remember they're

completely tearing out the inside redoing the inside they're doing the new

battery new drive units new internal electronics playstation 5

level infotainment system and that they've had lots of issues the

elon musk also touched on and i thought this was a

little bit weird but basically what they're doing is

because they're not done with some of the s and x's the first ones that

they're producing are probably the new model s's they're

kind of backing them into the yard and then putting them back into the factory

to kind of keep making modifications to them i have to say that struck me as

a little odd their goal is to produce uh 2000 s and

x's per week potentially as high as 224 to

2500 s and x's and that these when they are done

will be superior vehicles and they expect to get to volume

uh soon they expect to start deliveries next month of the s

the x will come later with new deliveries and uh that they hope to get

to full volume on the snx by next year that puts them on pace for somewhere

around uh let's see if we do two 52 weeks times uh

2000 that puts us around 100 4 000 vehicles uh on the low side per

year for s and x's that'll certainly help the average of vehicle

selling prices go up substantially and on the high side we expect

potentially as many as 130 000 s and x's to be produced and built

on a financials obviously there was a big impact

on profits the big line here so that you can do some math was that

200 million dollars of extra loss was baked into quarter one revenue

or quarter one expenses into their costs of goods solds and

automotive revenues or i'm sorry automotive expenditures due to the s x

re-ramp the retooling cost 200 million dollars

and that's not even to mention the lack of revenue

and despite this automotive gross margins still went up so in my opinion

that's really good news but tesla after hours after this

earnings call is settling down about 1.3 i'm sorry

2.33 percent uh most folks not too excited about how the earnings call went

though this particularly in my opinion was a very strong

moment here uh and uh the candlesticks did start agreeing

uh at uh at the time of this reveal as well uh they also indicated that

research and development expenses increased because of their continued

development on the 4680 cells the new battery packs

artificial intelligence and the s and x retooling so it looks like you've got

some operating expenses going into the snx

process itself like the the factory line retooling but

then also our research and development expenses going into the snx so a lot of

extra expenses here they talked about trimming about 10 off

their bitcoin position but they talked about how they do plan

to still invest in bitcoin for the long run and

convert uh more of their vehicle purchases from

bitcoin into uh bitcoin that they hold for the long

run they did sell 10 they said that this was just for

liquidity purposes that they want something that they can easily buy and

sell through on the dojo supercomputer elon musk went

into a very detailed explanation here and i kind of

gave you a little summary already with that eight camera

simultaneous labeling that's where they want to get to in the future

remember we've done this before on this channel you know those matterport 3d

scans that i show you on this channel i love matterport i love the technology

metaport does this as well where they scan a place and then their artificial

intelligence starts automatically labeling oh okay i think this is a smoke

detector oh that's a door okay that's this or whatever that's

going to be huge for insurance purposes right public company ghvi

well it's a smack merger but anyway elon is trying to do this

on the fly so like in real time as a car is moving and then have a

system be able to automatically label okay that's a kayak on top of a car

that's a truck on top of another truck and be

able to label these things but these things are

challenging and so we gave some examples about how basically they're writing the

software that's trying to start auto labeling and

that trainers then go through and fact check no that's

not a donkey that's a car or whatever and then when they make

those edits they actually help train the system even more

but basically they expect that dojo in the future could potentially even be

used by others but keep in mind we did see toyota bail

on that rumor that we saw a few months ago that

toyota might want to partner with tesla to use tesla's autonomy system

but recently bailed on that my assumption they bailed on that tesla

talk because the toyota instead today bought

lyft's self-driving uh products which i didn't even know that lyft had a

self-driving product on solar roof they say that demand is

still in excess of uh what they can produce there was some uh there

was a question about why is it that people are getting

much you know being asked to basically pay double for the roof

elon musk kind of talked this up as uh being uh

more of an issue with people's roofs that elon's going or the you know the

staff's going to a roof and they're like come on man like your roof is totally

rotted out it's going to cost twice as much to do

this keep in mind i have had this experience with tesla myself not on the

solar roof but on the solar panels basically i asked for a panel they come

out and the roof in my opinion looks fine not leaking i've had my roof

certified by licensed roofers they do tune-ups on my rental properties tesla

will go out and go you know this is we just don't want to put a

20-year solar panel on this roof we want you to replace the roof or we want you

to replace half the roof or whatever and then they give me a fat sort of

contractor estimate that they can they can subcontract to tesla probably

get some some decent amount of profit from doing that

by you know taking a little bit of a spread between for that referral purpose

but uh yeah that is uh that's been a common issue with with tesla is you kind

of getting the uh uh the uh up charge a bill from the

contractors but that is the nature of construction as

well so on one hand i don't blame them i mean they don't want to get suckered

into uh you know putting their panels or even

solar roof on top of crap lumber or whatever

but um and on the retrofit panels they put a 20-year

panel on you know a roof that only has five years left uh you know i get it

that could create some problems anyway in those cases elon musk says

they just refund deposits okay fine a big thing about the solar

discussion though was uh about simplifying the installation of a

solar panels and so this was a little tricky i'm gonna make this as simple as

possible and honestly i think the easiest way to

explain the uh what elon musk is talking about

when it comes to the the why elon musk wants

the solar battery pack included in the solar system

is just by doing a very quick rudimentary explanation here

so generally if somebody wants solar panels on the roof

and they have a main circuit panel over here and you want to add

solar panels on the roof you're going to have something known as an inverter that

gets installed and then generally you need a few

breakers free in the panel which when you need a few breakers free

in the panel to power that or to connect with that inverter

you have to do a lot of rewiring inside of that main panel

and so what they're doing instead is saying well if we have a power wall

and we install a power wall so we'll just go ahead and put pw here for

powerwall well we're going to have an actual

panel over here for the for the power wall and what we're going to do is we're

just going to feed all of the circuits that are supposed to

be backed up by the uh that are that are wiring

through this panel we're going to splice off those go into

this sub panel and then the power wall is going to go

over here so all of a sudden you have a very very simple way

to install solar where you don't have to screw around with rewiring the panel

because you're trying to jam some new breakers in there

what you're really doing is you're just routing off of the main

into this new sub panel and letting the power wall feed

those circuits keep in mind the power wall does not have to feed

every single circuit in the house just whatever circuits either

the system was designed for so that's my overly simplifying not an electrician

here understanding of a simplified uh you know

explanation here on on what's going on so in other words

uh elon musk is basically saying look it's much easier for us to install the

power walls on every solar system on top of that we make much more money

and that's also a very good motivation now elon musk did give a

long-winded explanation about how having batteries and houses is actually really

important because people are using more

electricity because they have electric vehicles now

and we have bad weather that can cause more issues and more outages and more

strain on systems basically elon musk is saying yo we

putting power walls in now with our solar panels like it or not okay is that

freaking simple all right we already talked about the

coin no new announcements on like dogecoin or whatever

all right then we get to this this crash in texas okay this crash in texas folks

this was this explanation was the most garbage explanation they could

have possibly come up with but i think we have a conclusion here as

to what roughly they said so uh and i tweeted this as

well so roughly our understanding is that

auto steer which is basically autopilot when you don't have the full

self-driving auto steer would have only accelerated

on the road where the accident happened to 30 miles per hour this implies given

that the car burst into flames which you do not expect to happen at 35 mile or 30

miles an hour this implies the car was not on auto

steer so it probably means somebody launched the car like let's go zero to

60 let's go because again remember what i said with that

fiery crash i'm expecting it to reveal that this car

was going at least 50 to 60 miles an hour

if not even 70 to 80 miles an hour but at least 56 so when i had 30 i initially

got a little concerned uh confused uh we re-listened and

re-thought about what was said uh and uh so that's where the 30 mile an

hour limitation come from uh so this does imply that the car was

traveling faster without auto steer on we did not get an

indication of the speed of the crash and that seat belts were found to be

unbuckled now we do not know if the seat belts were unbuckled

at the beginning of when they started driving or if

uh if the seat belts were unbuckled after the crash we do not know that

the seat belts were just found unbuckled however there is an indication due to a

deformed steering wheel that somebody was in the driver's seat

at the time of the crash which and think about it if somebody was in

the driver's seat at the time of the crash and let's say they were unbuckled

uh you would you would probably have a lot of mass going into that steering

wheel leading to some deformant now you would

expect the airbag to go off so so i don't i don't know the mechanics

of airbag verse body going into airbag versus still

deforming the steering wheel i don't know obviously i would expect the

deforming of the steering wheel to be a lot worse

if the person was not buckled up obviously but we don't have that answer

and they did mention that the sd card uh

which does record data on the car was not able

to be recovered however it is uh they are

working on trying to recover data from that sd card

then we've got on 4680s uh they they dispelled some rumors about vampire

drain uh they talked about how lithium iron

batter lithium ion batteries are only really

one to two percent lithium and that there's no shortage of iron

phosphate lithium batteries iron phosphate batteries are

the cheaper ones the 4680 ones are the or the um the iron phosphate ones are

the ones being manufactured in china a lot of the teslas

have those the 4680s are the new structural batteries and those are the

ones that they're trying to ramp they're really expecting to get to

volume production next year on the 4680s but they do think well

actually yeah that redirects they do expect it's going to be 12 to 18 months

which again does align with next year they are aiming for comparable

margins this was a big one comparable margins

in storage as they are in a vehicle which is great because vehicle

margins they're aiming for 30 but elon musk mentions like mega packs

power walls and we're nowhere near scale yet

but we are expecting margins to eventually

approach what the vehicle manufacturing margins are which that's 20 to 30

percent honestly that's a lot higher than the margins that i had been giving

for energy so i think that's great however i expect

that to decline as they continue to do solar panel installs

because solar panel installs are low margin but the batteries are higher

margin on full self driving a subscription

still working on it maybe they'll do recurring revenue in

the future but too soon to make any announcements on the conference call

on getting to a 25 000 vehicle uh elon musk mentions and the other staff

mentions look there are many things we can do

uh reducing the amounts of pieces that go into a car

obviously streamlining the pieces that are used in conjunction between all the

different cars continue to find cost reduction scale uh

the volume of having four factories building the same vehicles all that

helps and on berlin and austin ramp we'll get

there no real news here i think the big

takeaway from what we got from tesla today was really

no news unfortunately a lot of today was uh no news a big no news day for

tesla not so great it's kind of more of a like

a hurry up in weight and i think that's why we're seeing some negativity in the

stock especially with that average selling

price declining as the s x's aren't being produced obviously when

you take very expensive cars like 80 to 100

000 cars out of your product mix your average selling price will naturally

decline so uh there you go there you have a

complete summary of what the heck happened in the earnings

call as well as a little bit with the earnings

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