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What We Learned from Tesla’s Q3 Earnings Call

Tesla held their Q3 2022 earnings call on Wednesday

Tesla has grown at an incredible rate, but according to Elon Musk, we haven’t seen anything yet. So the company’s CEO made the earnings call a can’t miss event for investors and enthusiasts. The third quarter earnings call highlighted expected growth, buybacks and resumes. After the call, Musk tweeted: I will not let you down, no matter what It takes. Here is a quick recap of what we learned from the 58-minute call.

First, there are some quick points before we get into more detailed highlights. Musk says quarter-four is shaping up to be “epic” and promises a record-breaking performance. Tesla is not “recession-proof,” but is resilient. Musk does not see any reason to slow down production, as demand is still far more than supply. RoboTaxi is progressing. The program would provide autonomous vehicles as cabs, but hinges on the full self-driving program.

Tesla Will Have the Largest Market Cap

In his opening remarks to investors, Musk made an extraordinary prediction. He said that Tesla would have the largest market cap in the world, surpassing second-place Saudi Aramco and first-place Apple. Not only would his company take the lead, “In fact, I see a potential path for Tesla to be worth more than Apple and Saudi Aramco combined.”

The combined market cap of those two companies is more than 4.4 trillion. Tesla is worth just over $ 690 billion. Musk says it won’t be easy, but “It will require a lot of work, some very creative new products, manage expansion and always – luck… We have an incredible product portfolio. I think we’ve got the most exciting product portfolio. of any company on earth, some of which you’ve heard about, some of which you haven’t. ” He later added that this prediction did not include Optimus coming to market. Tesla recently updated its humanoid robot to be put to work in Tesla factories before being available to the world in 2027.

Buybacks Could Happen in 2023

The topic of buybacks regularly surfaces during these earnings calls. Musk said that it has been discussed, “extensively at the Board level. The Board generally thinks that it makes sense to do a buyback.” He added that the company would be looking at doing a buyback of $ 5 to $ 10 billion, and even if 2023 is a down year, “it’s likely that we’ll do some meaningful buyback.”

Unfortunately, the buybacks won’t happen before the 1% tax on buybacks kicks in on January 1, 2023. Some speculate this is the real reason the buybacks were pushed to next year, to avoid the optics of trying to dodge a new tax.

Tesla is Becoming the Go-To for the Brightest Minds

AI Day 2022 was a big hit, not only for showing off Optimus and Full Self-Driving improvements but generating interest in the company. While AI Day is viewed by many as a way for the company to show off its latest achievements, it’s a recruitment drive.

Tesla includes several staff members to discuss projects, while Musk encourages people with interest to apply. “We’ve seen a massive influx of world-class artificial intelligence engineers and scientists resumes. So, it generated a tremendous amount of interest from some of the best AI researchers in the world. I can’t emphasize the importance of this enough because I think finally it has become clear to the smartest AI technologists in the world that Tesla is among the very best. ”

50 Percent Annual Growth

Tesla is going to need all the help it can get. The company is still committed to growing by 50 percent yearly in both deliveries and revenue. “We expect to sell every car that we make for as far into the future as we can see. So, the factories are running at full speed, and we’re delivering every car we make and keeping operating margins strong,” said Musk.

Despite the company’s strong growth, he admits Tesla is still tiny in the big picture: “We are still a very small percentage of the total vehicles on the road. Of the 2 billion cars and trucks on the road, we only have about 3.5 million . So, we’ve got a long way to go to even reach 1% of the global fleet. ”

That said, there has been a monumental shift to electric vehicles in the past year, prompting Musk to say, “I think the public, at large, realizes that everyone’s moving towards electric vehicles and that it’s foolish to actually buy a new gasoline car at this point because the residual value of that gasoline car is going to be very low. So, I think we have to be in a very good spot. ”

That means there are two billion cars that could be retired in the coming years and replaced with electric vehicles. Therefore, the consumer pool will only get bigger and demand for EVs will continue to grow,

During its earnings call Tesla also discussed its upcoming Semi, which they expect to produce up to 50k units in 2024, the next Tesla model is already in the works, and the latest on its FSD Beta.

Two new Tesla Model Y colors

Tesla just introduced two new paint colors, Quicksilver and Midnight Cherry Red. Giga Berlin specifically built a unique paint shop to offer these new colors. Elon has previously called Giga Berlin’s new paint shop the “most advanced,” offering “more layers and stunning colors that subtly change with curvature.”

Unfortunately, these stunning new colors are exclusive to the Giga Berlin paint lines meaning these new colors are only available in European and Middle Eastern countries. Elon explains why these colors are only available at the Giga berlin paint shop:

“Only Giga Berlin can make these colors, as paint shop was specially built to apply many fine layers of paint, giving it complexity not otherwise possible.”

When @TeslaownersSV asked if a new color could be added in the US as well, Elon simply replied “Yes”.

Based on previous leaks in Tesla app updates, Tesla fans were expecting three new colors to be available in the future: Crimson Red, Mercury Silver Metallic and Abyss Blue.

It’s not clear whether Tesla still plans to offer these exact colors, but based on their similarities to these two new offerings, it appears that Midnight Cherry Red has replaced the Deep Crimson color Tesla was considering and the new silver color may have had a name change or changed slightly. However, it’s not clear whether Tesla still plans to offer Abyss Blue at some point in the future.

The new colors are more expensive than the previously offered gray (Midnight Silver Metallic) which was € 1,600 and red multi-coat which was € 2,000. Now, Quicksilver is € 3,000 and Midnight Cherry Red is available for € 3,200. The Euro is currently valued at a similar rate to the US dollar, so the prices in USD would be comparable.

Abyss Blue, which we have yet to hear more details about, could be the mysterious new color that Elon said would be offered in the US. If Abyss Blue becomes available, it’ll likely replace Tesla’s current blue shade, Deep Blue Metallic.

These new colors are only currently available on the Model Y, but that is likely to change as well as Tesla has traditionally shared their paint colors across all of its models.

Although these new colors are currently exclusive to the Berlin paint shop, Tesla rarely offers features only in a given region. By offering the same parts and features across all of its factories Tesla reduces costs through scale. Upgrading paint shops would come at a significant cost, so it’s not surprising that Tesla isn’t rushing to do this and may decide to couple it with other changes down the line.

I’d expect Tesla to start offering these new colors in other regions in the future, especially at Giga Texas which was built after their factory in Berlin.

What do you think?

What color would you like to see offered next? What do you think about the new Quicksilver and Midnight Cherry Red colors and their increased price? Let us know in our forum.

There will be specialty cars built for a certain task

Tesla’s new vehicle development team is working on what could be the next big thing. But the next Tesla won’t just be another great-looking, zero-emissions, fast car full of fun extras. That would be too easy. No, the team will make another groundbreaking vehicle and revolutionize its production. The CEO also predicts it will outsell all the other models.

Elon Musk said, “we’re on a 2-for-1 target,” when addressing the next platform for the company. That means engineers are working on a plan to build two vehicles with the same amount of effort it takes to put together one Model 3. Musk told investors during the third quarter earnings call, “we’re twice the output. And we do believe this can be done. ”

Tesla’s Q3 Earnings Call

The 2-for-1 plan seems all-encompassing, from cutting costs, production times and even the amount of floor space needed in the factories. “I mean, obviously, we’re going to take everything we learned from S, 3, X, Y, Cybertruck and Semi and forward into that platform.”

But the new vehicle remains a mystery, both in design and delivery. Musk said, “we don’t want to talk exact dates, but this is the primary focus of our new vehicle development team, obviously. At this point, we’ve done the engineering for Cybertrucks and Semi. So, it’s obviously what we’re working on, which is the next-generation vehicle. ” Keeping that information to himself, Musk did say it would cost as much as the Model 3 and Y platforms.

There’s been a lot of speculation as to what the next Tesla vehicle will be. Musk has said that the company would build a full-size van or a minivan – maybe both. He’s talked about creating a “highly configurable” van as well. However, with the skyrocketing interest in electric vehicles, Tesla may bring back the idea of ​​a less expensive car, referred to as the Model 2. It’s been reported that this vehicle would have a price tag of $ 25,000 USD.

It’s also possible that Tesla’s next vehicle will be its Robotaxi, or that Tesla will leverage the platform for multiple vehicles.

But, again, Musk was not giving up specifics but 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. ”

A highly configurable van would be a hot seller for families, delivery services and work vehicles. But, at the same time, the smaller, much less expensive car would also drive up sales. Either way, the team is working on it – so we should learn more soon.

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