Tesla Space #49: ⚡ Frunk or Treat

X OF THE WEEK

Here’s simultaneously a dunk on Fred who has taken Electrek to mostly producing FUD about Tesla (opinion, Jaan’s, not necessarily Tesla Space’s) and Elon recognizing the heck of a run on the $TSLA stock this week, which Fred missed fully out on (more on the what & why of the run below).

TESLA, GLOBALLY

Last week, I asked how many of you currently hold $TSLA stock.
307 out of 426 of you voting said “Yes, I own $TSLA”.

Well, I guess we have at least 307 rather happy people reading this newsletter today, since the stock jumped from $217 to $262, over 20% upwards since I asked that question last week.

All of the jump happened in one day, which made it the second-biggest percentage gain day in the company history and added ~$149B to the market cap. I didn’t do this, I promise. Rather, the culprit this time was the:

Tesla Q3 Earnings call

First off, here are the resources if you want to dig in yourself:

• The full livestream of the Q&A with Elon and team;

• Shareholder Deck, the 32-page pdf with all key details and some images;

• Answers to shareholder questions on the SAY platform.

Now, if you’re not going through all that, here’s what you need to know. I’ll start with what I think are the key news:

• Cybertruck achieved a positive gross margin for the first time. Big wow. None of the other EV pickup trucks in the US have yet become profitable, most ~3 years on the roads already. 

• Tesla’s automotive gross margin in Q3 was 17.1%, jumping from 14.6% in Q2.

• Elon says there is some chance the Hardware 3 vehicles “do not achieve a safety level that allows for unsupervised FSD. If that turns out to be the case, we will upgrade those two have bought HW3 FSD for free.”
  “Do the right thing for customers and they will do the right thing for you,” comments Elon.

• Preparations for new vehicles remain underway (including more affordable models), which we'll begin launching in the first half of 2025. Elon says the affordable model next year will be under $30,000, if including the federal $7.5k incentive.

• Tesla has confirmed that their Cybercab will have a new powertrain with an estimated 5.5 mi/kWh. "This will be our most efficient powertrain yet."

• Tesla’s cost of goods sold (COGS) per vehicles came down to its lowest level ever at ~$35,100."

• On deliveries, Tesla said they expect slight growth in vehicle deliveries in 2024 — which would mean a new all-time high quarter of at least 515k vehicles in Q4.

Also, Elon says that for Tesla employees in SF, they are already offering employee ride-hailing capabilities with a development app.

"We do have a safety driver for now, but the software required to do that we've developed." and says “We think we'll be able to have driverless paid rides next year.”

Just last week, Palo Alto lawmaker Greg Tanak confirmed that they are in talks with Tesla to potentially allow testing of their Robotaxi on local roads.

Now, some updates per Tesla’s different business arms:

Vehicles:  

Tesla produced their 7-millionth vehicle at the Fremont factory, and Giga Shanghai produced its 3 millionth car & exported its 1 millionth car. By the way, Fremont Factory just celebrated its 14th birthday — here’s a video of Elon opening it back then.

And here’s a pic of Tesla celebrating the 1-millionth Model Y rolling out of Fremont last week:

Tesla says the new upcoming platforms can be produced on the same manufacturing lines as the current vehicle line-up, helping to “fully utilize our current expected maximum capacity of close to three million vehicles, enabling more than 50% growth over 2023 production before investing in new manufacturing lines.”

Here’s the current installed vehicle capacity of Tesla:

COGS (Cost Of Goods Sold) per vehicle came down to lowest level ever which is key to enabling affordability. Here’s a bit of a fun take on that from Elon:

“And by the way, the amount of work required to make a lower cost car is insanely high. But, like, it is harder to get, like, 20% of the cost out of a car than it is to design the car and build the entire factory in the first place. Yeah. It's, like, excruciating. And it's -- and there's not a lot of movies made about the heroes who got 20% of the cost out of a car. But let me tell you, there should be.”

Elon on the Tesla Roadster: “I'd like to thank our long suffering deposit holders. The roadster is not just the cherry on the cake but also the icing on the cake; We're close to finalizing the design.”

and on the Tesla Semi: “We have ridiculous demand for the Tesla Semi; Any company that doesn't adopt an electric Semi will lose (on total running costs).”

and on the Cybercab production: "It's not just a revolutionary design, but a revolution in manufacturing. The units per hour of the Cybercab line, it's really something special. It'll be half an order of magnitude better than normal car lines. Not in the same league.” He also said: “We do feel confident in Cybercab reaching volume production in 2026. Not starting production, volume production; I think it's at least 2 million units per year (when ramped)."

FSD & Software:

In Q3, Tesla released FSD Supervised 12.5, bringing improved safety & comfort thanks to a 5x increase in the number of parameters, data & training compute (will continue to scale in Q4). And Elon said in another spot: “We expect to see a 5x-6x improvement in miles between interventions compared to v12.5".

Tesla owners have now driven over 2 billion miles on FSD (Supervised), with more than 50% of that on V12:

Tesla's internal estimate is for FSD to be safer than a human in Q2-Q3 2025.

Tesla also says they’ve produced the 100-millionth 4680 cell & continue to progress the dry cathode manufacturing lines. Elon says: “If we execute well, the 4680 cell will be the most cost competitive cell in North America.”

Energy

Record gross margin for Tesla Energy in Q3 at 30.5%, here’s the historical chart:

Elon: “It won't be long before we're shipping 100GWh of stationary storage at Tesla. It will ultimately grow to multiple TWh per year.”

Megafactory in Lathrop demonstrated 200 Megapacks/week (40 Gwh run rate)
Powerwall deployments reached a record for the 2nd quarter in a row.

Tesla Energy just announced they reached 4,500 Powerwalls installed in the US in just one week. As of Q3, over 100k Powerwalls were enrolled in VPP programs — out of ~750,000 units worldwide.

Supercharging & Locations:

By the end of Q3, Tesla had 6,706 Supercharger stations and 62,421 Supercharger connectors deployed worldwide, up 20% and 22% from Q3 last year, respectively.

The company also had 1,306 locations (16%) and 1,933-unit Mobile service fleet (+5%).

There was also a great discussion with Elon and Lars on the Tesla Service centers and how it should all work kind of like a factory. We put up that part of the transcript here.

Financials:

Tesla now has a record $33.6 billion of cash and equivalents. Free cash flow was $2.7B in Q3. Tesla writes: “We have sufficient liquidity to fund our product roadmap, long-term capacity expansion plans and other expenses. Furthermore, we will manage the business such that we maintain a strong balance sheet during this uncertain period.”

• EPS (non-GAAP): $0.72 vs. $0.58 est

• EPS (GAAP): $0.62

• Revenue: $25.18 vs. $25.4B est

• Total GAAP gross margin: 19.8%

• Net income (GAAP): $2.176B

A look at the Tesla & xAI compute:

By the end of this year, Tesla & xAI will have brought online roughly $10 billion worth of training compute capacity in 2024 alone. These systems will be used to train Grok, FSD and Optimus (Tesla Bot).

Tesla already deployed and is training ahead of schedule on a 29,000 unit Nvidia H100 cluster at Giga Texas – and will have 50,000 H100 capacity by the end of October, and ~85,000 H100 equivalent capacity by December. More on xAI’s plans in the Muskonomy section.

This is also likely why Tesla just increased it’s expectations on capital expenditures to exceed $11B (up from $10B) in 2024.

Standardizing Automotive Connectivity

Tesla has announced the Low-Voltage Connector Standard (LVCS) to reduce the cost and complexity of electronics in the automotive industry, and is inviting all device suppliers and vehicle manufacturers to join them in this initiative.

Today, EVs typically use over 200 connections. To simplify this, Tesla has simplified the connectors in its cars so that they use just 6 connectors. LVCS expands upon the same 48V electronic architecture used for Cybertruck. “Tesla invites all device suppliers and vehicle manufacturers to join us in this initiative. Any questions can be directed to [email protected]."

Quick bites:

• Tesla is extending the free FSD trial in North America by another 30 days.

• Tesla plans to build its largest sales, delivery, and service center in the world, a 163,000 sqft facility in Queens, New York. Construction starts in 2025.

• Tesla’s Q3 2024 vehicle safety report.

• Frunk or Treat: The Cybercab was shown at the Giga Texas, in Tesla’s “Frunk or Treat” exhibit. Also, this time it looks like the wheels aren’t painted over, but have some kind of cover instead.

• Tesla now officially offers window tinting products through XPEL.

• Looks like we might’ve been right on the Model Y Juniper production and some details last week — as a recent sighting in Shanghai suggests.

• Tesla and Elon Musk are sued for allegedly using “Blade Runner 2049” imagery during the “We, Robot” event — you know, for showing the AI-generated dude on the slides.

THE MUSKONOMY

(SpaceX’s) Starlink

“Basic camping solar panels plus a little battery will power Starlink all day,” per Elon.

Starlink team turned on the service for their first paying customer four years ago. Since then, they’ve connected 4M+ people, businesses and other organizations across the world.

Elon says: “The next generation Starlink satellites, which are so big that only Starship can launch them, will allow for a 10X increase in bandwidth and, with the reduced altitude, faster latency.”

Musk announced that Starlink services will remain free for the rest of 2024 in areas affected by Hurricane Helene and Milton. And the cellular Starlink service in tests with T-Mobile during the hurricane delivered “hundreds of thousands of successfully completed text messages to people that otherwise wouldn’t have seen them.”

Also, here’s SpaceX refuting another FUD story from WSJ, on it not providing it’s services in Ukraine and Taiwan. TL;DR: Starlink has not turned off service for Ukrainian soldiers, and it does not operate in Taiwan at all due to Taiwan gov’s ownership requirements.

Starlink terminals are now sold out in Zimbabwe's capital of Harare, less than two months after receiving permission from authorities to operate.

Neuralink

Watch tip: Elon’s ~30-minute talk at the Congress of Neurological Surgeons. This part was interesting to me:

“In very high volume, it should start at approx the cost of an Apple Watch or a phone, so maybe $1,000-$2,000; We do have a gameplan for what I call the 600-second surgery. So 10 minutes, you sit in the chair and 10 minutes later you have an implant. We're not violating physics.”

Another thing he posted on the topic: “I am increasingly convinced that Neuralink should prioritize making an implant that can eliminate back & neck pain.” This seems to be a personal pain for him too, if you’ve read Walter Isaacson’s biography of Musk you’ll find he has back problems since sumo wrestling at one of his birthdays if I recall right.

xAI

xAI plans to bring online an additional 100,000 Nvidia GPUs at its Memphis, Tennessee training cluster within the next 2 months, for a total of 200,000 Nvidia GPUs, doubling the size of what was already the world's largest and most powerful supercomputer.

Here is a great recent 15-minute video walkaround of the xAI’s 100,000 Nvidia GPU Cluster. A lot of the info shared in this one, it’ a must-watch if you’re into xAI topics really.

This massive cluster named "Colossus" is used to train Grok. They are building and turning on these training systems in record time.

OpenAI CEO Sam Altman reportedly told some Microsoft executives last recently that he is concerned that xAI could soon have more access to computing power than OpenAI.