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LIVE BLOG: Tesla (TSLA) Q2 2021 earnings call summary

Tesla Model Y body shop in Gigafactory Texas. (Credit: Tesla)

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With its second-quarter results that include $11.958 billion in revenue and $1.1 billion of GAAP net income, Tesla (NASDAQ:TSLA) has all but proven that it could be a sustainable business. With Q2 2021 in the bag, after all, Tesla has now posted eight profitable quarters in a row, and that’s despite an ongoing chip shortage and supply chain issues. 

As discussed in the company’s Q2 2021 Update Letter, Tesla achieved some milestones in the second quarter. Commissioning has started in some areas of Gigafactory Texas, and Giga Berlin is also moving forward. What’s more, Gigafactory Shanghai has also completed its transition as the company’s primary vehicle export hub. The development of 4680 cells has also moved forward. Even Tesla Energy hit some stride in Q2 2021, with battery storage deployments tripling year-over-year in the second quarter. The same was true for Solar Roof deployments. 

Tesla’s Fremont Factory. (Credit: peekaystudio/Instagram)

The following are live updates from Tesla’s Q2 2021 earnings call. I will be updating this article in real-time, so please keep refreshing the page to view the latest updates on this story. The first entry starts at the bottom of the page.

15:40 PT: And that’s a wrap, everyone! I gotta admit, it’s kind of sad that this may one of Elon Musk’s last regular earnings call appearances. It does make sense, though, as Tesla is in a much better place now compared to before. We can never forget Elon’s most memorable earnings call moments, though. Those will live in Tesla history.

Anyway, thanks for staying with us for our Live Blog once more. Until the next time!

15:38 PT: Elon mentions a number of key tidbits about Tesla Energy. With enough cells, Tesla could hi an annualized production of 1 million Powerwall’s next year. Long-term, Musk also noted that Tesla and its suppliers would have to produce 1,000-2,000 GWh worth of batteries per year.

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When asked about the company’s FSD subscription program, Musk highlighted that Tesla has to make the system work very well first. Until then, it would be difficult to forecast just how well FSD would do. “Once we have FSD fully deployed, then the value question will be clear,” Musk said.

15:30 PT: Pierre Ferragu News Street Research inquires about sourcing the company’s 4680 cells. Elon confirms that Tesla is working with its existing suppliers to produce 4680 cells for its vehicles. He also noted that Tesla’s iron-based vehicles will not use 4680 cylindrical cells, as predicted by some of the company’s more ardent bulls. Elon believes it would be ideal to do 1-3 cell formats, especially considering the massive backlog in demand for the company’s product lineup.

15:25 PT: Rod Lache of Wolfe Research asks about Tesla’s estimates for innovations such as rear castings and 4680 cells. Musk notes that making predictions is difficult. “You need a lot of crystal balls to predict exactly what it would be,” the CEO said. A follow-up question on the company’s advances in cell manufacturing technology was asked. Tesla notes that the company is making progress, but there are still challenges. Tesla notes that more than 90% of the processes have been proven, but things are still limited by the ones that have not been proven. The company, however, is happy with its dry electrode process.

Credit: Whole Mars Catalog/YouTube

15:20 PT: When asked about other services that Tesla could offer, Elon Musk noted that FSD would be the main service that the company would offer. The CEO did note that Tesla is the leader in electrification and autonomy. This is an accurate statement, regardless of the controversy that surrounds the company.

Investor questions begin. First up is Colin Rusch from Oppenheimer. He asks about the take rates for FSD. Musk notes that it’s not worth promising on this right now, as it’s not meaningful. Tesla is focused on making FSD widely available. The analyst asks about any developments with regulators and their understanding of FSD technology. Musk responds that Tesla does not see a fundamental inhibitor in this light.

Musk reiterates his previous point, noting that once autonomous driving systems are proven to be safer than human drivers, regulators would likely be more welcome. He also reiterates his previous example of elevators, which used to be manual but are now fully automated. The same thing will likely happen with autonomous driving.

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15:15 PT: Last retail question for retail investors asked if Elon Musk would be open to interviews every so often on prolific TSLA bulls’ YouTube channels. “I would do it annually,” Musk said, seemingly after pondering the point. He also noted that over time, he would not be speaking in Tesla earnings calls anymore unless there’s something really important that he has to address. Elon would likely only speak during the Annual Shareholders’ Meeting.

15:12 PT: Elon notes that Tesla has a massive amount of equipment that will be coming for the mass production of 4680 cells. “Most likely, we’ll hit an annualized rate of 100 GWh per year by the end of next year,” Musk said.

15:10 PT: A question about the progress of the 4680 cells was asked. Musk noted that in limited volumes, the 4680 cells are reliable enough for vehicles already. It’s just a matter of overcoming challenges that are present when mass manufacturing the 4680 cells. “We will definitely make 4680 reliable enough for vehicles. There are a number of challenges when transitioning from small-scale production to large-scale production,” Musk said. The 4680 cells’ reliability has been validated, though, with cells having been tested for the *equivalent* of 1 million miles.

Credit: Tesla

15:07 PT: A question about Tesla’s plan to open the Supercharger Network to other EVs was brought up. Elon Musk notes that the process would be simple and app-based for non-Tesla owners. He did state that there will be a time constraint. “The biggest constraint to Superchargers is time,” Musk said, adding that there are times when charging stations are packed and other times when they are empty. “Tesla will also be smarter in terms of how it charges for electricity,” Musk added, noting that Tesla will use time-based pricing for non-Tesla EVs.

Non-Tesla EVs would have to use a Supercharger adapter, which Musk jokes would be available on Supercharger Stations. “Our goal is to support the advent of sustainable energy. Our intention is not to create a walled garden that we can use to bludgeon our competitors,” Musk jested. It was also highlighted that opening the Supercharger Network to other EVs would result in the system to grow even faster than ever before.

15:02 PT: Musk noted that Tesla is looking to strengthen its raw material supply chain. He states that Tesla no longer uses cobalt in its LFP packs, and the company may even shift to iron-based cells in the future as opposed to nickel-based cells. “We expect to have zero cobalt in the future,” Musk said. The CEO added that all stationary energy storage like Powerwalls and Megapacks will use iron-based battery cells.

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15:00 PT: The Tesla executive noted that the company plans to overshoot on cell for vehicles and routing cell output to Megapack and Powerwall if there is excess. And just like its present strategy, shortages in cells would likely result in a reduction in the production of the Powerwall and the Megapack.

Credit: Tesla

14:58 PT: Say questions from retail investors begin. First question is about the Cybertruck production. The company noted that it would be looking to ramp Cybertruck production in Gigafactory Texas after the Model Y production starts in the TX-based facility.

Elon Musk highlights the complexity of producing vehicles, and how each EV is comprised of thousands of parts. He notes that Tesla is fastest in history for scaling large manufactured objects, comparable to the Model T. He also noted that the Cybertruck and the Semi’s volume production would be greatly affected by cell availability.

However, Tesla is expecting to see a big boost in cell availability next year. “Maybe not in January,” Musk said, but sometime in the coming year. Musk hints at Tesla having twice as many cells next year compared to 2021. This is impressive considering that this year is already record-breaking.

Seemingly avoiding his typical over-optimistic estimates, Musk emphasizes that these are just current predictions and his estimates could change depending on challenges or obstacles that might come up.

14:53 PT: Musk concludes with a statement about Full Self-Driving, and how he is confident that Tesla could achieve autonomous driving.

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Tesla Chief Finance Officer Zachary Kirkhorn takes the floor, noting that the company’s financials even without credits improved substantially. He highlights Tesla’s decreasing ASP while maintaining margins for its vehicles, which was made possible by optimizing the company’s operations to a significant degree.

The CFO confirms that Tesla’s numbers for the year would be more notable in the third and fourth quarter. “Our 2021 volumes will skew for the second half of the year,” Kirkhorn said.

Tesla Model Y paint shop in Gigafactory Berlin. (Credit: Tesla)

14:48 PT: Elon discusses the Model Y line in Giga Berlin, which would be different from the Model Ys produced thus far. He still maintains that Giga Berlin and Giga Texas could go live with Model Y production later this year.

“The Model Y line in Texas and Berlin will look mostly like the Model Ys we make, but there will be substantial differences. The Model Y in Berlin will have a cast rear body and cast front body. We’re going to structural packs,” Musk said. The CEO did state that Tesla has a backup plan with a non-structural pack and 2170 cells, but 4680 cells will definitely be used for scale production.

14:45 PT: Musk discusses how Tesla rolled out contingencies to handle the challenges brought about by the chip shortage. He credits Tesla’s team and the company’s suppliers for helping the company resolve the material shortages. The CEO also discusses the release of FSD subscriptions, which would likely have high take rates as the advanced driver-assist system becomes more mature.

Musk notes that he is in Giga Texas, and he congratulates the team building its factories. “There’s nothing a year ago, and there’s a mostly complete large factory a year later,” Musk said, lauding Giga Texas’ team.

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14:40 PT: Martin Viecha takes the stage and opens with the basics. Elon and other executives are present for the earnings call. Elon starts his opening remarks. He highlights that Q2 2021 was a record quarter, in deliveries, production, and income. He also noted that electric vehicles are now at an inflection point, and that the market is now being more aware that EVs are the way forward.

14:38 PT: And we’re starting!

14:35 PT: A 5-minute delay is nothing to a Tesla veteran.

14:30 PT: And here we go. We’re at standby. 🙂 This is very on-character for Tesla.

Stamping press at Gigafactory Texas. (Credit: Tesla)

14:25 PT: Every Tesla bull remembers, after all, those days when TSLA stock was the very picture of volatility. As someone who has watched Tesla over the years, I’m not really sure which one I prefer. The understated consistency of a mature EV maker or the drama and excitement of a disruptor trying to find its wings?

14:20 PT: Strangely enough, Tesla stock has only risen 2.28% despite the company beating Wall Street’s expectations. I wonder if TSLA shares would see a boost in the coming months once more, just like in previous years? Still, it almost feels strange seeing Tesla only move this much after an impressive earnings report.

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14:15 PT: Good day, everyone, and welcome to another live blog of Tesla’s earnings call! It’s pretty amazing that just a couple of years ago, there were still big questions whether Tesla could be a sustainable business. Back then, thinking that Tesla would be profitable for a year straight already seemed like a longshot. And now we have eight consecutive profitable quarters. Anyway, we’re 15 minutes away from the Q2 2021 earnings call. Perhaps this will be a memorable one as well.

Don’t hesitate to contact us for news tips. Just send a message to tips@teslarati.com to give us a heads up. 

Simon is an experienced automotive reporter with a passion for electric cars and clean energy. Fascinated by the world envisioned by Elon Musk, he hopes to make it to Mars (at least as a tourist) someday. For stories or tips--or even to just say a simple hello--send a message to his email, simon@teslarati.com or his handle on X, @ResidentSponge.

Investor's Corner

Tesla investors may be in for a big surprise

All signs point toward a strong quarter for Tesla in terms of deliveries. Investors could be in for a surprise.

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(Credit: Tesla)

Tesla investors have plenty of things to be ecstatic about, considering the company’s confidence in autonomy, AI, robotics, cars, and energy. However, many of them may be in for a big surprise as the end of the $7,500 EV tax credit nears. On September 30, it will be gone for good.

This has put some skepticism in the minds of some investors: the lack of a $7,500 discount for buying a clean energy vehicle may deter many people from affording Tesla’s industry-leading EVs.

Tesla warns consumers of huge, time-sensitive change coming soon

The focus on quarterly deliveries, while potentially waning in terms of importance to the future, is still a big indicator of demand, at least as of now. Of course, there are other factors, most of them economic.

The big push to make the most of the final quarter of the EV tax credit is evident, as Tesla is reminding consumers on social media platforms and through email communications that the $7,500 discount will not be here forever. It will be gone sooner rather than later.

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It appears the push to maximize sales this quarter before having to assess how much they will be impacted by the tax credit’s removal is working.

Delivery Wait Time Increases

Wait times for Tesla vehicles are increasing due to what appears to be increased demand for the company’s vehicles. Recently, Model Y delivery wait times were increased from 1-3 weeks to 4-6 weeks.

This puts extra pressure on consumers to pull the trigger on an order, as delivery must be completed by the cutoff date of September 30.

Delivery wait times may have gone up due to an increase in demand as consumers push to make a purchase before losing that $7,500 discount.

More People are Ordering

A post on X by notable Tesla influencer Sawyer Merritt anecdotally shows he has been receiving more DMs than normal from people stating that they’re ordering vehicles before the end of the tax credit:

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It’s not necessarily a confirmation of more orders, but it could be an indication that things are certainly looking that way.

Why Investors Could Be Surprised

Tesla investors could see some positive movement in stock price following the release of the Q3 delivery report, especially if all signs point to increased demand this quarter.

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We reported previously that this could end up being a very strong rebounding quarter for Tesla, with so many people taking advantage of the tax credit.

Whether the delivery figures will be higher than normal remains to be seen. But all indications seem to point to Q3 being a very strong quarter for Tesla.

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Elon Musk

Tesla bear Guggenheim sees nearly 50% drop off in stock price in new note

Tesla bear Guggenheim does not see any upside in Robotaxi.

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tesla showroom
Credit: Tesla

Tesla bear Guggenheim is still among the biggest non-believers in the company’s overall mission and its devotion to solving self-driving.

In a new note to investors on Thursday, analyst Ronald Jewsikow reiterated his price target of $175, a nearly 50 percent drop off, with a ‘Sell’ rating, all based on skepticism regarding Tesla’s execution of the Robotaxi platform.

A few days ago, Tesla CEO Elon Musk said the company’s Robotaxi platform would open to the public in September, offering driverless rides to anyone in the Austin area within its geofence, which is roughly 90 square miles large.

Tesla CEO Elon Musk confirms Robotaxi is opening to the public: here’s when

However, Jewsikow’s skepticism regarding this timeline has to do with what’s going on inside of the vehicles. The analyst was willing to give props to Robotaxi, saying that Musk’s estimation of a September public launch would be a “key step” in offering the service to a broader population.

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Where Jewsikow’s real issue lies is with Tesla’s lack of transparency on the Safety Monitors, and how bulls are willing to overlook their importance.

Much of this bullish mentality comes from the fact that the Monitors are not sitting in the driver’s seat, and they don’t have anything to do with the overall operation of the vehicle.

Musk also said last month that reducing Safety Monitors could come “in a month or two.”

Instead, they’re just there to make sure everything runs smoothly.

Jewsikow said:

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“While safety drivers will remain, and no timeline has been provided for their removal, bulls have been willing to overlook the optics of safety drivers in TSLA vehicles, and we see no reason why that would change now.”

He also commented on Musk’s recent indication that Tesla was working on a 10x parameter count that could help make Full Self-Driving even more accurate. It could be one of the pieces to Tesla solving autonomy.

Jewsikow added:

“Perhaps most importantly for investors bullish on TSLA for the fleet of potential FSD-enabled vehicles today, the 10x higher parameter count will be able to run on the current generation of FSD hardware and inference compute.”

Elon Musk teases crazy new Tesla FSD model: here’s when it’s coming

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Tesla shares are down just about 2 percent today, trading at $332.47.

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Investor's Corner

Elon Musk issues dire warning to Tesla (TSLA) shorts

This time around, Tesla shorts should probably heed his words.

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Credit: Tesla

Elon Musk has issued a dire warning to Tesla (NASDAQ:TSLA) short sellers. If they do not exit their position by the time Tesla attains autonomy, pain will follow. 

Musk has shared similar statements in the past, but this time around, Tesla shorts should probably heed his words.

Musk’s short warning

The Tesla CEO’s recent statement came as a response to Tesla retail shareholder and advocate Alexandra Merz, who shared a list of the electric vehicle maker’s short-sellers. These include MUFG Securities EMEA, Jane Street Group, Clean Energy Transition LLP, and Citadel Advisors, among others. As per the retail investor, some of Tesla’s short-sellers, such as Banque Pictet, have been decreasing their short position as of late.

In his reply, Elon Musk stated that Tesla shorts are on borrowed time. As per the CEO, TSLA shorts would be wise to exit their short position before autonomy is reached. If they do not, they will be wiped out. “If they don’t exit their short position before Tesla reaches autonomy at scale, they will be obliterated,” Musk wrote in his post.

Tesla’s autonomous program

Tesla short sellers typically disregard the progress that the company is making on its FSD program, which is currently being used in pilot ride-hailing programs in Austin and the Bay Area. While Tesla has taken longer than expected to attain autonomy, and while Musk himself admits to becoming the boy who cried FSD for years, autonomy does seem to be at hand this year. Tesla’s Unsupervised FSD is being used in Robotaxi services, and FSD V14 is poised to be released soon as well.

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Elon Musk highlighted this in a response to X user Ian N, who noted that numerous automakers such as Audi, BMW, Fiat-Chrysler, Ford, GM, Honda, Mercedes-Benz, Volkswagen, and Toyota have all promised and failed in delivering autonomous systems for their vehicles. Thus, Tesla might be very late in the release of its autonomous features, but the company is by far the only automaker that is delivering on its promises today. Musk agreed with this notion, posting that “I might be late, but I always deliver in the end.”

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