For a guy who once said he wasn’t going to be on many future earnings calls, Elon Musk has a hard time staying away.
Last night, Tesla reported its third quarter earnings, and Musk was front and center, making boastful claims about his company’s future (bigger than Apple and Saudi Aramco), dropping hints about Tesla’s next vehicle platform, hyping the much-delayed Cybertruck, and even offering some commentary on his on-again, off-again deal to buy Twitter.
Musk defended the company’s performance despite missing delivery and revenue expectations amid fears of softening demand for Tesla’s vehicles.
“We have excellent demand for Q4 and we expect to sell every car that we make for as far as the future as we can see,” Musk said defiantly. “So the factories are running at full speed and we’re delivering every car we make and keeping operating margins strong.”
But forgot these Wall Street-centric platitudes. Let’s talk about cars! And trucks! And robot cars! Yeehaw!
Tesla’s next big product launch, the Cybertruck, won’t be until next year, with Musk reiterating that production won’t start at the Texas Gigafactory until at least mid-2023. “We’re in the final lap on Cybertruck,” he said.
“Yeah, that car’s gonna be sick,” Musk said. “Hall of famer. Next level. Sorry it took longer than expected, but there were a few things that got in the way, like insane global supply chain issues.”
Tesla is also continuing to work on a robotaxi platform, with Musk saying that the company has “made a lot of progress.” Musk has said that he expects to unveil the new vehicle, which is designed to be shared as part of a car-sharing service, also in 2023.
So next year is shaping up to be a big year for new product launches — if Musk is able to meet his self-imposed deadlines, which he has difficulty doing.
Keep in mind that Musk has previously predicted fully autonomous vehicles in which the driver would not need to pay attention to the driving would be available en masse by 2020. This did not happen, so take his predictions about a coming robotaxi with a huge burlap bag full of salt.
Next-gen vehicle platform
Will the robotaxi be the first vehicle to be built on Tesla’s next-generation platform? It’s still unclear, but Musk did drop some hints about the cost savings the company is trying to achieve as it looks down the road toward future vehicles.
This future vehicle “will be probably about the cost of [the Model] 3 and Y platform,” he said. “It will be smaller, to be clear. But it will, I think, certainly become — certainly exceed the production of all our other vehicles combined.”
The goal is to get to a place where Telsa can “make two cars for the amount of effort that currently takes us to make one Model 3,” Musk said. That doesn’t mean that Tesla plans on selling this vehicle for half the price of a Model 3 — only that it is designing a more efficient manufacturing process so it can make this future vehicle faster and more cost-effective.
“We’re on a 2-for-1 target,” Musk said. “So, we’re trying to get to that 50 percent number again.”
Musk has said that Tesla will eventually have a $25,000 electric car, though the date for that keeps getting pushed. Musk likes to say everything will come out next year, so let’s stick with that.
Musk also reiterated plans for a nationwide rollout of Tesla’s Full Self-Driving beta program within the next few months. That means that every Tesla owner who has paid for the FSD option will finally get access to the advanced driver-assist system before the end of the year — if Musk’s plans hold out.
Currently, there are approximately 160,000 in the FSD beta program testing out the driver-assist system on public roads, driving over 6 million miles. If Musk is true to his word, there could be thousands more with access to FSD by the end of the year.
Musk noted that he drove from a friend’s house in Austin to Tesla’s Texas Gigafactory and didn’t once touch the vehicle’s controls. But he also acknowledged that there was still a long way to go before Tesla’s vehicles will be fully autonomous.
There’s a “longer process of like, the cold the march of nines of like, how many nines reliability do you need before you can really be comfortable saying that the car can drive with no one in it,” Musk said, referring to the endless number of rare edge cases that an autonomous vehicle could encounter.
Tesla’s new battery format is continuing to progress, albeit slowly. Production has tripled as compared to Q3 2021, Musk said, and the hope is that the company will be able to start installing them in its cars very soon.
“We are finally gaining rapid traction on the 4680 cell,” Musk said. “And its output is growing rapidly and we’re expected to start incorporating in cars.” Crucially, the Cybertruck’s production will not be dependent on progress with the 4680 cells, Musk added.
“We don’t anticipate this being any limiting factor for the Cybertruck or anything else.”
Unveiled during Battery Day in 2020, Tesla’s 4680 cells are expected to be a game-changer for the company’s next generation of vehicles. Since the 4680 cells are expected to provide substantial cost savings and a notable boost in power to Tesla’s vehicles, expectations were high that the batteries would be used in vehicles like the Tesla Semi and the Cybertruck.
Bigger than Apple
No earnings call would be complete without some characteristic Musk bravado. The billionaire CEO predicted that Tesla would eventually exceed the value of Apple ($2.3 trillion market cap) and Saudi Aramco ($2.11 trillion) combined, which would amount to a valuation of about $4.5 trillion.
“That doesn’t mean it will happen,” Musk said. “Or that will be easy. In fact, I think will be very difficult for quite a lot of work. Very creative, new products.”
After the call, Musk’s fans on Twitter were quick to point out that Musk made a similar prediction in 2015 (and again in 2017) when he said Tesla would be worth $700 billion by 2025 — only to reach that valuation five years ahead of schedule in 2020. Musk couldn’t help but pat himself on the back on Twitter.
Speaking of Twitter
Musk made some brief remarks about his messy acquisition of Twitter. Even though he tried to squirm his way out of the deal and has endured months of embarrassing coverage about his text messages and other private communications that have been made public, Musk maintained that he was still “excited” to own Twitter.
“I’m excited about the Twitter situation,” he said. “Obviously, myself and other investors are obviously overpaying for Twitter right now. The long term potential for Twitter in my view is an order of magnitude greater than its current value.”
Frankly, it’s refreshing to hear him say something nice about the company he very well may own soon enough, considering he’s spent months shitposting about Twitter and its management.
Still, he couldn’t help but get one more dig in, noting that Twitter has “sort of languished for a long time but has incredible potential.”