Musk interprets Q3 financial report: every production line of Tesla is an independent start-up company

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 Musk interprets Q3 financial report: every production line of Tesla is an independent start-up company


Musk first called the third quarter the best quarter in Teslas history. He also talked about battery day, which he called the pinnacle of the companys many years of work. In a few years, musk points out, if production costs are lower, the price of batteries could be halved.

Musk also discussed software updates for full self driving (FSD). Thanks to the special efforts of his (Tesla) driving team to re launch their new autopilot system. Mr musk said the updated software for autopilot is likely to be available to more drivers by the end of the week and widely available by the end of the year. Musk stressed that rewriting the autopilot architecture is a general method to realize the full automatic driving function. In other words, the vehicle does not need special sensors to achieve autonomous operation.

In terms of auto capacity, musk mentioned the expansion of the Shanghai plant, as well as the Berlin plant and Texas plant under construction. We have made progress in the construction of three major plants and the performance of Tesla China team has always been impressive, he said Musk also pointed out that due to the development of new technologies, production at the Berlin plant will start to slow down and then gradually increase over time. The Berlin plant could take about 12 to 24 months to reach full capacity.

Zach kirkhorn, Teslas chief financial officer, said Tesla had been profitable for five consecutive quarters. The companys regulatory credit sales continued to be strong. Despite increased spending due to Musks compensation plan, the companys performance is still quite impressive. Kirkhorn said production and operating costs continued to fall.

RJ Johnson, head of Teslas energy division, discussed the development of the energy business. By 2021, we will have more demand than supply, he said Megapacks demand is expected to increase in the coming year. As costs fall, sustainable energy technologies will replace fossil fuel driven solutions, he said. Other Tesla energy products, such as autobidder and Powerwall, continue to be more adopted. In addition, the solar roof business is also promising, as Tesla is gaining more experience and installing products more quickly.

Questions from shareholders

The first question for shareholders was about the Tesla 4680 batteries, and whether they would be produced at the same time as the vehicles at the Berlin plant. Drew Baglino, senior vice president of Tesla engineering, gave a positive answer.

Shareholders also asked about solar roof installation restrictions. Johnson said the main limitation today is the installation process itself. For Tesla, making sure the solar roof is easy to install is crucial. So far, feedback from third-party installers has been quite positive. Musk points out that the real potential of solar roofs is likely to emerge next year.

In response to the idea that Tesla might spin off some businesses, musk said Tesla was essentially a collection of start-ups. Every major product is a start-up, and every big new factory is a start-up, he said. Frankly, sometimes we have to learn a few lessons to fully understand that.

Musk also pointed out that Tesla does not rely on enterprise software, which means that all of Teslas operational software is developed internally. However, Tesla has no plans to divest anything, and musk believes that it will only increase complexity..

An institutional investor asked about Teslas HVAC program, particularly with regard to modelys heat pump. Bagrino points out that modelys heat pump does provide Tesla with some of the basics. Musk points out that the company has the technology to develop household products.

Musk highlighted the crucial reason for making Teslas cars affordable. All of these margins look ridiculous when it comes to automation, he said Mr kirkhorn said Tesla was selling as many electric cars as possible. He added that while Teslas various models were being cut, sales and profit margins had increased. In addition to cutting costs, cars get better, which is why more consumers buy the companys cars.

Analyst questions

Wolfresearch analysts are first to focus on the goals announced by battery day. Mr. mask pointed out it was difficult to predict Teslas actual production, but 20million vehicles were a possible figure, accounting for 1 per cent of the car production this year. After all, Teslas mission is to accelerate sustainable development, and it needs to increase sales to do so. Asked about Teslas battery production, musk pointed out that Tesla could and would change all aspects of the companys batteries. Over time Tesla will explore the different chemical components of its batteries. In a way, its Teslas tradition, as the electric car manufacturer is still showing its innovative trends.

Oppenheimer analysts asked about Teslas internal processes and operations. Tesla believes in crazy vertical integration, Musk points out. Tesla will first design the machines, then the company will build them, and then use them to produce machines to minimize outsourcing. This makes it very difficult to replicate Tesla, Musk said. But musk admits hes not sure crazy vertical integration is a smart move, but so far it seems to have worked well. Musk was then asked about Teslas balance sheet and how the company would operate in the near future. Were trying to spend as fast as we can, but not a cent, Musk said

Newsstreet research analysts asked about cybertruck and its ramp. Musk points out that he and the Tesla team are working to ensure that cybertruck will be better than the prototype released last year. He said the car has a lot of minor improvements that make it better than the already impressive prototype, which will be built in Austin. Musk reiterated that cybertrucks rigid exoskeleton may pose some challenges to the manufacture of vehicles. But still, if all goes well, Tesla can complete a small delivery by the end of next year. He predicts a large number of deliveries in 2022 and 2023.

Levy analysts asked about Teslas pricing strategy, especially about cars made at the Berlin plant. Kirkhorn explained that this is affected by different factors, although Tesla is trying to increase production to optimize pricing.

Analysts at the agency also asked about Teslas skateboard design culture, which musk confirmed would be obsolete in the long run. Its very few vehicle parts and components sought by Maestro are made a little bit like the way large toy cars are made. The way batteries are used in airplanes and rockets may also apply to cars. Through such a strategy, Tesla is actually learning from the design concept of orbital stage rocket. getting rid of the skateboard design culture wont happen overnight, but its sure to happen, musk said. (small)

Source: Qiao JunJing, editor in charge of Netease science and Technology Report_ NBJ11279