To The Moon

Q&A（Question-and-Answer Session）is a session after the company's prepared remarks where institutional investors and analysts ask management questions. In this dialogue, you may find some valuable information that might affect the stock price in the following weeks.

Now let's look at some key points from $Tesla Motors(TSLA)$ Q3 2022 Q&A Session Transcript

Q:Thank you very much. And let’s go first to the shareholder questions. The first shareholder question is, “Given the stringent battery content and assembly requirements for consumer tax credit eligibility under the Inflation Reduction Act, can you speak to Tesla’s ability to meet those thresholds in each of 2023, 2024 and 2025 through your existing and planned supply chain?”

A:Well, yes, I mean, I think just at a high level, I’d say, we do expect to fully meet the IRA’s requirements.

Yes. We view that passing of the Inflation Reduction Act there’s a significant boost towards accelerating automation, while also scaling the battery supply chain at large in the United States. We expect Treasury to publish detailed guidance by the end of the year. Until such time, it’s difficult to fully determine the eligibility criteria, but we believe Tesla is very well positioned to capture a significant share of that for solar storage and also electric vehicles.

Yes, like I said, we’re -- like I said earlier, we’re going to go basically pedal to the metal as fast as humanly possible to get to 1,000 gigawatt hours a year of production in the U.S. vertically integrated.

Q：“Do you still expect 50% annualized growth for the foreseeable future? Is this also true specifically for the Chinese domestic market? Do you expect to need to cut vehicle prices or offer incentives in any market to sustain a demand, or has demand remained stable, or is it even rising?” There are three questions there.

A:Well, like I said, we want to sort of focus on a high level on what we think is possible here. We -- to the best of our knowledge, we believe that Tesla will continue to grow deliveries and revenue production at a 50% or greater compound annual growth rate. It might occasionally be a year that is a little less, and then some years would be maybe a little more or a lot more. In some of our out-year planning, we see potential annual growth rates that are in excess of 50%.

Q:Thank you. The next question is, “Can you tell us more about the product future road map beyond new models and FSD, and especially for interior and powertrain of existing vehicle models?

A:Yes. We could, but who wants? Sorry, guys, we can’t like jumping on, on future product announcement.Yes, we obviously are -- yes. But we’ll also be committed to continuous growth. Yes. At Tesla, we’ve always been committed to continuous improvement. So, there is friends might have asked me like, when should I buy a car, I’m like now because we just keep improving the cars.

Yes, there’s still latest Tesla. I don’t really -- yes, the -- every now and again, we do have some big technology upgrade, like Plaid. And by the way, I think the Plaid Model S and X are the best cars on earth. There’s nothing even close, in my opinion. Just try one. Epic.

Q:The next question is, “We keep hearing of dire energy crisis in Germany this winter. What are Tesla’s plans to combat power cuts? And will there be any delays in ramp-up in production from Giga Berlin because of this?”

A:Yes, I can take that. I think two points on this question. The first is just that based upon everything that we know, we don’t see this as a large risk to the Company. Even if production did go down for a period of time, this is on near term, it doesn’t have any impact on the long term of the Company.

But we don’t -- we have no indication whatsoever that we will have to cut our production in Germany.

No. And we put in place backup plans, and we’re working through the supply chain as well. Nearly all of our suppliers are prepared as well. So, we’ll see how this plays out, but it’s not something that we’re terribly worried about.

Q:Thank you. And the next question is, “How is production planning going for the Cybertruck? What is the initial Phase 1 production target? When can we expect an update on pricing and final design?”

A:I mean, as Elon said earlier, we’d be -- facilities preparations here in Giga Texas for Cybertruck. We’re still on track to enter early production in the middle of next year. We started our data builds of all of the battery body in existing...

When should I drop my beta?

In a few weeks. That’s going well, and we continue ramping up through the end of next year and into 2023.

Great. Yes, the car is going to be sick and -- sick. That is going to be a 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 shortages like FedEx, which are force majeures if everyone.

Of course. There’s Tesla Semi, of course. So, we’ll be handing over our first production Tesla Semis to Pepsi on December 1st. I’ll be there in person. And we will begin ramping up production of the Tesla Semi, which is a max low, heavy -- heavy truck. That’s a Class A truck, Class A truck.

No sacrifice to cargo capacity.

Yes, exactly, very important, no sacrifice to cargo capacity, 500-mile range. Just to be clear, 500 miles with the cargo. Yes, 500 miles with the cargo on level ground. Yes, sure. Not up. It’s excellent. But the point is, it’s a long-range truck and even with heavy cargo. And the number of times people tell, no, you can’t -- it’s impossible to make a long-range heavy-duty Class A truck. And then, I’ll ask, well, what are your assumptions about what hour kilogram and what hours per mile, and they look at me with a blank stare and then say hydrogen. I’m like, no, that’s not the answer, I was looking for numbers, literally. It’s not a number. It’s [indiscernible] table. You obviously don’t need hydrogen for heavy truck.

And we’ll be ramping up Semi production through next year. As I think everyone knows at this point, it takes about a year to ramp up production. So, we expect to see significant -- we’re tentatively aiming for 50,000 units in 2024 for Tesla Semi in North America. And obviously, we’ll expand beyond North America. And these would sell -- I don’t want to say the exact prices, but they’re much more than a passenger vehicle. So, with a few thousand heavy trucks of this nature, it would be worth several Model Ys.

Q:Thank you. The next question is, what is the progress of the 4680 cell ramp? And what factors determine whether vehicles get 2170s versus 4680 cells? And how will that change in the next year?

A:Yes, ramp is going well, as Elon said. Total output is up 3x quarter-over-quarter, and production is tracking to exceed 1,000 car cells per week this quarter, as we said last quarter. Our focus is now shifting from 100% ramp to cost and further expanding production capacity in North America, as Elon also mentioned.

On the 2170 versus 4680, in our factories, we really attempt to minimize factory complexity and product changeover while still making sure we get enough new product into the field to learn how it is performing. And that sort of mix is going to shift as 4680 scales here and the overall factory ramp proceeds in Texas.

Right. Basically, production of 4680 ramp is growing exponentially. And yes, it’s going well. We’re just looking at this -- just going to be a major pack in the future.

Yes. And like I said, we’re -- our goal is to strive towards 1,000 gigawatt hours a year of annualized production in United States alone by Tesla, not including [indiscernible], will be on top of that.

We need to get 300 to 400 terawatt hours to accomplish our goal.

Yes, there’s roughly -- to transition to sustainable energy, our calculation for both stationary and vehicles is 300,000 to 400,000 gigawatt hours or 300 to 400 terawatt hours.

So when you’re like one tower assembling a lot, well, a lot of terawatt hours to go by.

Yes. On the cathode side -- we think it will probably be iron and most of the iron -- iron can scale to very, very high tonnage and then some nickel. The exact percentages are hard to figure out, but it’s -- probably be twice as much iron cathodes as they call, maybe more. And then there’s the manganese wildcard as well.

And on that note, we’re pursuing aggressively North American iron supplies. And how -- yes, we can talk more about that at a future date.

The above Q&A are highlights that are edited for brevity. Click here for the full TESLA Q3 2022 Earnings Call Transcript.​​​​

If you want to know more details, you can click here to re-watch the TESLA Q3 2022 Earnings Conference Call