During Tesla’s Q1 2024 earnings call, key executives such as Elon Musk, Vaibhav Taneja, and Lars Moravy discussed the company’s performance, challenges, and future outlook. Despite facing unforeseen challenges and a tough environment, Tesla managed to execute well in Q1, achieving record profitability in their energy business with the Megapack deployment. They also expanded their AI training capacity and updated their future vehicle lineup to accelerate the launch of new models, aiming for over 3 million vehicles of capacity.
Elon Musk highlighted the advancements in Full-Self Driving (FSD) version 12, emphasizing the rapid rate of improvement and the vision-based approach with end-to-end neural networks. The company reduced the subscription price for FSD to $99 per month and announced plans to showcase a purpose-built Robotaxi or Cybercab in August. Tesla is actively working on expanding their core AI infrastructure with a focus on efficient training and distributed inference to unlock new opportunities beyond vehicle autonomy.
The Q1 results showcased a decline in auto margins and higher costs due to the ramp of Model 3 in Fremont, as well as disruptions in Berlin. However, cost reductions and revenue from Autopark feature helped offset these challenges. The energy business reported record margins, and Tesla continues to focus on reducing costs without compromising quality. The company also made significant investments in AI initiatives, marketing, and future projects, resulting in negative free cash flow of $2.5 billion in Q1.
Tesla’s approach to pricing was discussed, with a focus on offering great value for money, improving affordability, and simplifying the sales process. The company plans to stay free cash flow positive while continuing to lower prices and improve the cost of production. Additionally, the potential for licensing FSD technology to other automakers was mentioned, with the possibility of signing deals in the future to integrate Tesla’s autonomous driving software into other vehicles.
The executives also touched upon the progress of the 4680 cell production, highlighting the ramp for Cybertruck and the need to maintain a balance between production and costs. The conversation extended to the distribution of workload through distributed inference and the potential revenue opportunities it could unlock. Overall, Tesla remains optimistic about its future growth and profitability, with a focus on innovation, efficiency, and the pursuit of autonomy in the electric vehicle industry.
