Investor's Corner
Top 10 questions Tesla (TSLA) investors want to know from the Q2 2022 earnings call
Tesla (NASDAQ:TSLA) is holding its second-quarter earnings call after markets close today, July 20, 2022. As in previous quarters, Tesla investors have voted for the top questions that they want the company’s executives to answer at the upcoming Q2 2022 earnings call.
As noted by Say, the questions that Tesla investors have submitted for the second quarter earnings call represent inquiries from both retail and institutional investors.
Following are the Top 10 Questions from Retail Tesla investors:
- How do you feel the progress of FSD is going, and does Andrej Karpathy leaving have any significant impact on any timelines/potential progress?
- How is the 4680 ramp going, and is Giga Texas producing cells yet?
- Can you speak w/some level of precision on the 4680 ramp, expected vs. actual yield at this point in time? Same for expected daily output vs. actual, and when does output start meeting plan?
- Will there be early access for Tesla long-term investors to have early access to SpaceX as an investment opportunity?
- How does $TSLA plan to handle all the misinformation, attacks, and fake news against Tesla and Elon Musk? We have been dealing with this and it affects the stock.
- How do you plan on executing your strategies to create massive scale? Any ETA on Master Plan Part 3?
- Would you consider buying back shares if we can maintain profitability?
- What are the biggest 4680 headwinds? And what do you think 4680 production output will be by the end of 2022?
- Any update with Tesla HVAC that can be shared?
- Is Tesla still planning a software development kit and app store for third-party developers to make and sell Tesla apps?
And the following are the questions from Tesla institutional investors.
- Chinese EV manufacturers seem to be doing a better job than their western competitors (excluding Tesla) at innovating in software and design. How can Tesla make sure the company is staying ahead of those manufacturers, both within and without China?
- When will Tesla have a unified vector space for both the static and moving object network? Will this be v11 or a later version? If the latter, can you explain what makes it a difficult problem in layman’s terms?
- Elon recently tweeted about lowering prices “once inflation cools down.” Can you elaborate on what you mean by cooling down and how aggressively the company will lower prices? More broadly, how do you think about auto pricing longer-term?
- You made the right economic call before most on inflation when you diversified into bitcoin. It has since shown it’s not much of a hedge in the real-world test the last few months. How do you think about it as an asset over the LT, and what do you need to see to change your view?
- With regards to the tamp of production in Austin and Berlin, how is the situation with regards to the supply of semiconductors, battery cells, and other components? How about cost inflation impacting profitability of these and other plants?
- What’s the source of Energy for Tesla Berlin? Would the plant would be considered a priority for the German government in case of Gas / Energy rationing?
- Assuming technical hurdles are achieved, what is Tesla’s plan for autonomy/robotaxi? Do you expect to first deploy into repetitive routes like Vegas Loop/airport shuttles? or launch fleets in urban areas? What is assessment of political willpower for each?
- What sort of demand has tesla seen for Optimus? How would you characterize this demand in terms of units? Re: economics, a hardware fee with SaaS element seems to make sense but can you guide on dollar amounts the market may be willing to pay per unit + exp. margins (at scale)?
- At what revenue level will Tesla have to grow its Energy Generation and Storage business to reach profitability, and when might that be achieved? Will you need new battery or solar technology advancements?
- How would you rate the EV industry’s progress in achieving sustainable transport, and what are the 3 most likely countries Tesla will need new Gigafactories to achieve sustainable transport?
Disclaimer: I am long TSLA.
Tesla has scheduled its Earnings Call for Q4 and Full Year 2025 for next Wednesday, January 28, at 5:30 p.m. EST, and investors are already preparing to get some answers from executives regarding a wide variety of topics.
The company accepts several questions from retail investors through the platform Say, which then allows shareholders to vote on the best questions.
Tesla does not answer anything regarding future product releases, but they are willing to shed light on current timelines, progress of certain projects, and other plans.
There are five questions that range over a variety of topics, including SpaceX, Full Self-Driving, Robotaxi, and Optimus, which are currently in the lead to be asked and potentially answered by Elon Musk and other Tesla executives:
- You once said: Loyalty deserves loyalty. Will long-term Tesla shareholders still be prioritized if SpaceX does an IPO?
- Our Take – With a lot of speculation regarding an incoming SpaceX IPO, Tesla investors, especially long-term ones, should be able to benefit from an early opportunity to purchase shares. This has been discussed endlessly over the past year, and we must be getting close to it.
- When is FSD going to be 100% unsupervised?
- Our Take – Musk said today that this is essentially a solved problem, and it could be available in the U.S. by the end of this year.
- What is the current bottleneck to increase Robotaxi deployment & personal use unsupervised FSD? The safety/performance of the most recent models or people to monitor robots, robotaxis, in-car, or remotely? Or something else?
- Our Take – The bottleneck seems to be based on data, which Musk said Tesla needs 10 billion miles of data to achieve unsupervised FSD. Once that happens, regulatory issues will be what hold things up from moving forward.
- Regarding Optimus, could you share the current number of units deployed in Tesla factories and actively performing production tasks? What specific roles or operations are they handling, and how has their integration impacted factory efficiency or output?
- Our Take – Optimus is going to have a larger role in factories moving forward, and later this year, they will have larger responsibilities.
- Can you please tie purchased FSD to our owner accounts vs. locked to the car? This will help us enjoy it in any Tesla we drive/buy and reward us for hanging in so long, some of us since 2017.
- Our Take – This is a good one and should get us some additional information on the FSD transfer plans and Subscription-only model that Tesla will adopt soon.
Tesla will have its Earnings Call on Wednesday, January 28.
Elon Musk
Tesla locks in Elon Musk’s top problem solver as it enters its most ambitious era
The generous equity award was disclosed by the electric vehicle maker in a recent regulatory filing.
Tesla has granted Senior Vice President of Automotive Tom Zhu more than 520,000 stock options, tying a significant portion of his compensation to the company’s long-term performance.
The generous equity award was disclosed by the electric vehicle maker in a recent regulatory filing.
Tesla secures top talent
According to a Form 4 filing with the U.S. Securities and Exchange Commission, Tom Zhu received 520,021 stock options with an exercise price of $435.80 per share. Since the award will not fully vest until March 5, 2031, Zhu must remain at Tesla for more than five years to realize the award’s full benefit.
Considering that Tesla shares are currently trading at around the $445 to $450 per share level, Zhu will really only see gains in his equity award if Tesla’s stock price sees a notable rise over the years, as noted in a Sina Finance report.
Still, even at today’s prices, Zhu’s stock award is already worth over $230 million. If Tesla reaches the market cap targets set forth in Elon Musk’s 2025 CEO Performance Award, Zhu would become a billionaire from this equity award alone.
Tesla’s problem solver
Zhu joined Tesla in April 2014 and initially led the company’s Supercharger rollout in China. Later that year, he assumed the leadership of Tesla’s China business, where he played a central role in Tesla’s localization efforts, including expanding retail and service networks, and later, overseeing the development of Gigafactory Shanghai.
Zhu’s efforts helped transform China into one of Tesla’s most important markets and production hubs. In 2023, Tesla promoted Zhu to Senior Vice President of Automotive, placing him among the company’s core global executives and expanding his influence beyond China. He has since garnered a reputation as the company’s problem solver, being tapped by Elon Musk to help ramp Giga Texas’s vehicle production.
With this in mind, Tesla’s recent filing seems to suggest that the company is locking in its top talent as it enters its newest, most ambitious era to date. As could be seen in the targets of Elon Musk’s 2025 pay package, Tesla is now aiming to be the world’s largest company by market cap, and it is aiming to achieve production levels that are unheard of. Zhu’s talents would definitely be of use in this stage of the company’s growth.
Tesla analyst Andrew Percoco of Morgan Stanley teased the company’s dominance in its self-driving initiative, stating that its lead over competitors is “not even close.”
Percoco recently overtook coverage of Tesla stock from Adam Jonas, who had covered the company at Morgan Stanley for years. Percoco is handling Tesla now that Jonas is covering embodied AI stocks and no longer automotive.
His first move after grabbing coverage was to adjust the price target from $410 to $425, as well as the rating from ‘Overweight’ to ‘Equal Weight.’
Percoco’s new note regarding Tesla highlights the company’s extensive lead in self-driving and autonomy projects, something that it has plenty of competition in, but has established its prowess over the past few years.
He writes:
“It’s not even close. Tesla continues to lead in autonomous driving, even as Nvidia rolls out new technology aimed at helping other automakers build driverless systems.”
Percoco’s main point regarding Tesla’s advantage is the company’s ability to collect large amounts of training data through its massive fleet, as millions of cars are driving throughout the world and gathering millions of miles of vehicle behavior on the road.
This is the main point that Percoco makes regarding Tesla’s lead in the entire autonomy sector: data is King, and Tesla has the most of it.
One big story that has hit the news over the past week is that of NVIDIA and its own self-driving suite, called Alpamayo. NVIDIA launched this open-source AI program last week, but it differs from Tesla’s in a significant fashion, especially from a hardware perspective, as it plans to use a combination of LiDAR, Radar, and Vision (Cameras) to operate.
Percoco said that NVIDIA’s announcement does not impact Morgan Stanley’s long-term opinions on Tesla and its strength or prowess in self-driving.
NVIDIA CEO Jensen Huang commends Tesla’s Elon Musk for early belief
And, for what it’s worth, NVIDIA CEO Jensen Huang even said some remarkable things about Tesla following the launch of Alpamayo:
“I think the Tesla stack is the most advanced autonomous vehicle stack in the world. I’m fairly certain they were already using end-to-end AI. Whether their AI did reasoning or not is somewhat secondary to that first part.”
Percoco reiterated both the $425 price target and the ‘Equal Weight’ rating on Tesla shares.
Tesla starts removing outright Full Self-Driving purchase option at time of order
Tesla Robotaxi has a highly-requested hardware feature not available on typical Model Ys
