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LIVE BLOG: Tesla Q1 2024 earnings call

Credit: Tesla

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Tesla’s (NASDAQ:TSLA) Q1 2024 earnings call comes on the heels of the company’s Q1 2024 Update Letter, which was released after the closing bell on Wednesday, April 23, 2024. 

Tesla posted total revenues of $21.3 billion, with automotive revenues at $17.3 billion for the first quarter of 2024. The company also posted non-GAAP earnings per share of $0.45 and GAAP EPS of $0.34 for Q1 2024. Tesla also posted $1.2 billion GAAP operating income in Q1, $1.1 billion GAAP net income in Q1, and $1.5 billion non-GAAP net income in Q1.

The following are live updates from Tesla’s Q1 2024 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.

17:35 CDT – Martin Viecha announces that he is also leaving the company after seven years in the company. He thanks the company and his peers in the Tesla executive team for the experience. Elon Musk also personally thanks Viecha for his contributions to the company.

17:31 CDT – Wolfe Research also asked about Tesla’s 4680 cells. Musk clarified that Tesla is now seeing a lot of competitive prices from its battery suppliers due to excess capacity. This was due to battery orders from other automakers declining dramatically. “There’s gonna be a boom and bust in battery supply,” Musk noted.

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17:25 CDT – Collin Rusch from Oppenheimer asked about Tesla’s Robotaxi, as well as what is happening to the vehicle now. Tesla executives noted that while developing AI, the main question is what should Tesla do with “usable compute. The company’s vehicles are loaded with hardware designed for autonomous driving, so it only makes sense to use the vehicles for useful tasks.

Rusch’s follow-up question was focused on the 4680 ramp and how close Tesla is to its targets. Musk noted that it’s not super important in the near term, though the company estimates 4680 production will exceed the capacity of suppliers by the end of the year. The 4680 ramp is related to Cybertruck right now, as noted by Lars Moravy.

17:20 CDT – George Gianarikas from Canaccord asked about asked about FSD’s upcoming launch in China. “There are a bunch of markets we are not selling new cars and we are looking into accelerating that,” Musk said. He also noted that FSD works pretty well even without modification, so FSD’s rollout will likely be dependent on regulators. There are some subtleties that need to be worked on, of course, such as country-specific training for FSD.

The analyst asked a follow-up question about Q1 deliveries being impacted by supply constraints. Tesla executives noted that many factors affect deliveries, such as seasonality and macroeconomic pressure. Musk noted that he thinks Tesla’s Q2 will be better. He also admitted that Tesla’s vehicle purchasing process has become overcomplicated. Tesla will aim to optimize its buying process for it would be possible to “buying a car in under a minute.”

17:15 CDT – Mark Delaney from Goldman Sachs asked about FSD licensing and how far the potential business has progressed. Musk noted that Tesla just has to prove that its FSD solution is the right approach. Low cost, simple, and it just works. “It just needs to be obvious that our approach is the right approach,” Musk said.

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The Tesla CFO also clarified that OEMs take a long time, so a deal that’s signed for FSD licensing today will probably show up in cars three years from now, and that’s if the OEM is eager. Other automakers simply take a lot of time to put certain advancements into their vehicles.

Delaney asked a follow-up about Tesla’s pricing. Musk noted that Tesla could be free cash flow positive meaningfully. Other executives also noted that Tesla is offsetting its prices by reducing costs.

17:10 CDT – Alex Potter from Piper Sandler noted that he agrees with Tesla’s focus on AI. He asked about Elon Musk’s desire to control 25% of Tesla, and if he has come up with a way to achieve that much voting control. Musk noted that no matter what, Tesla will solve autonomy. “Even if aliens kidnap me tomorrow, Tesla will solve autonomy,” Musk said, albeit a little slower. Elon Musk is more reticent with respect to Optimus, however. He feels that he needs to be able to make important decisions about a humanoid robot. Musk also mentioned that Tesla may buy back shares down the line.

The analyst asked a follow-up question, this time about Tesla’s recent workforce reductions. The CFO reiterated the company’s previous points that Tesla needs to be optimized for its next phase of growth. “Any tree that grows, it needs pruning. This is the pruning,” the executive said. “The future is really bright. We just need to get through this period to get there,” he said.

“We’re not giving up anything that is significant that I’m aware of,” Musk said. He also noted noted that Tesla had a long period of prosperity from 2019. “It is time to reorganize the company for the next phase of growth.”

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17:05 CDT – Adam Jonas from Morgan Stanley asked about Telsa’s volume growth in 2024. Elon Musk noted that he believes Tesla will have higher sales this year compared to last year. The analyst asked a follow-up question about Chinese competitors, which could copy Tesla’s vehicles. Musk noted that he does not know what Tesla’s competitors can do, though he noted that Tesla is staying afloat in China. “I don’t know what our Chinese competitors can do,” he said.

Musk also reiterated a comment from ARK Invest, which argued that Tesla must not be valued as an AI company. “Cathie Wood said it best. Tesla is an AI company.” Musk also noted that those who value Tesla only as an automaker will not understand the company well. “We’re putting the ‘auto’ in automobile,” Musk said.

17:01 CDT – Analyst questions begin. First up is Tony Sacconaghi from Bernstein, who asked about Tesla’s product pipeline. Musk refused to answer. The analyst asked Musk if he intends to take a step back from Tesla considering his involvement with numerous companies. “Tesla constitutes the majority of my work time,” Musk said. “I’m gonna make sure that Tesla is very prosperous.”

17:00 CDT – A question is asked about Tesla’s affordable car. Lars Moravy reiterated Elon Musk’s previous comments. He notes that Tesla is updating its future lineup launches to get cheaper EVs to customers faster.

A question was asked about the Cybertruck ramp. Execs noted that while Cybertruck production has reached 1,000 per week, challenges remain. Elon Musk also confirmed that Tesla is in discussion with one automaker for FSD licensing. “We’re in conversation with one automaker,” Musk said.

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When asked about the scaling of the Tesla Semi, executives noted that the vehicle’s facility in Reno, Nevada has started its construction. Tesla also expects Megapack run rate to hit 20 GWh to 40 GWh per year.

16:48 CDT – A question about FSD’s regulatory path is asked. Tesla notes that there are already a handful of states that are embracing autonomous vehicles. Musk noted that regulatory approvals should follow after it becomes undeniable that FSD is significantly safer than a human-driven car. For now, however, Musk noted that it is critical to provide conclusive data that autonomous cars are significantly safer than a human-driven car.

Musk also noted that “Tesla will be operating the fleet,” seemingly referring to the company’s Robotaxi network. He reiterates that the Tesla Robotaxi fleet will work like a combo of AirBnB and Uber.

Musk also noted that Tesla’s Hardware 5 should be in the company’s cars about the end of 2025. “Hardware 5 is pretty much designed and should be in cars by the end of next year,” he said.

Elon Musk and other Tesla executives notes that the company has models that provide insights on how FSD will perform in later iterations. Those models are not released to the public. Tesla execs also noted that the company is more focused on autonomy. The Target is 5-7 million cars with autonomy.

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Credit: Tesla

16:44 CDT – Tesla investor questions begin. The first question is about 4680 production. Tesla noted that 4680 production increased 18-20% compared to Q4 2023.

Another question was asked about Optimus and if the robot is being used in current operations. Musk noted that Optimus is able to perform simple tasks, and Tesla will attempt to do an initial production for Optimus for internal use this year.

“We are able to do simple factory tasks in the lab,” he said, adding that the humanoid robot may start limited production for external customers by the end of next year. “Optimus will be more valuable than anything else combined… Tesla AI inference technology is vastly different than any other company,” Musk noted.

16:41 CDT – The Tesla CFO noted that the company did see a decline in revenues quarter over quarter, from 18.9% to 18.5%, though this was mostly due to seasonality and some microeconomics. He also noted that the costs of Model Y production in Austin and Berlin are closing in on Fremont’s costs. The executive also noted that Tesla is lowering prices and “attractive financing” on vehicles and subscriptions, which could help boost demand.

The CFO also noted that Tesla’s energy business continues to make meaningful progress. Margins for Tesla Energy hit a record 24.6%. “The future is extremely bright and the journey will be extremely rewarding,” he said.

16:36 CDT – Musk also reiterated the value of FSD V12 and its potential. He notes that Tesla’s $99 per month FSD subscription is a way for the company to make FSD more attainable to customers. He also stated that Tesla will be unveiling its purpose-built Robotaxi later this year, which he dubbed the “Cybercab.” Musk also mentioned that Tesla has roughly 35,000 H-100s.

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“We’re really headed for an electric vehicle autonomous future. Gasoline cars will be like riding a horse and using a flip phone,” Musk said. He also thanked the Tesla team for their hard work.

16:31 CDT – Tesla VP of Investor Relations Martin Viecha opens the call. Elon Musk and a number of executives are present in the call.

Elon Musk makes his opening remarks with a recap of the first quarter. He admits that the EV adoption rate is under pressure, and other automakers are turning to hybrids. Tesla will not be doing this. He notes that the launch of Tesla’s new models is being expedited, which includes a more affordable car. The vehicles will use aspects of current and new platforms and be produced in the company’s existing production lines. The new vehicles should allow Tesla to reach 3 million vehicles of capacity.

16:26 CDT – Hello, everyone, and welcome to our live blog of Tesla’s first-quarter 2024 earnings call. While Tesla did not exactly meet analyst expectations, the company’s first-quarter results were positively received by shareholders. As of writing, Tesla shares are trading up 8.14% in Wednesdaays’ after-hours. It’s been a while since TSLA shares saw such movement.

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

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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.

Elon Musk

Analyst: Elon Musk’s $1 trillion Tesla pay deal modest against robot market potential

Jonas highlighted Tesla’s longer-term ambitions in robotics as a key factor in his assessment.

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Credit: Tesla

Morgan Stanley analyst Adam Jonas, one of Wall Street’s most ardent Tesla (NASDAQ:TSLA) bulls today, has described Elon Musk’s newly proposed $1 trillion performance-based compensation package as a “good deal” for investors. 

In a note shared this week, Jonas argued that the package helps align the interests of Musk and Tesla’s minority shareholders, despite its shockingly high headline number.

Future market opportunities

Jonas highlighted Tesla’s longer-term ambitions in robotics as a key factor in his assessment. “Yes, a trillion bucks is a big number, but (it) is rather modest compared to the size of the market opportunity,” Jonas wrote. He added that the humanoid robot market could ultimately surpass the size of today’s global labor market “by a significant multiple.”

“We have entertained scenarios where the humanoid robot market can exceed the size of today’s global labor market… by a significant multiple,” Jonas wrote, as shared on X by Tesla watcher Sawyer Merritt.

The analyst likened the arrival of AI-powered robotics to the transformative effect of electricity, noting that “contemplating future global GDP before AI robots is like contemplating global GDP before electricity.” The Morgan Stanley analyst’s insights align with the idea that as much as 80% of Tesla’s future valuation could be tied to its Optimus humanoid robot program.

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Elon Musk’s pay package

Tesla’s board has tied Elon Musk’s proposed compensation package to some of the most ambitious targets in corporate history. The 2025 CEO Performance Award requires the automaker’s valuation to soar from roughly $1.1 trillion today to $8.5 trillion over the next decade, a level that would make Tesla the most valuable company in existence.

The plan also demands a leap in Tesla’s operating profit, from $17 billion in 2024 to $400 billion annually. It also ties the CEO’s compensation to a number of product milestones, including the delivery of 20 million vehicles in total, 10 million active Full Self-Driving subscriptions, 1 million Tesla Bots, and 1 million Robotaxis in operation. Tesla’s board emphasized that Musk’s leadership was fundamental to achieving such ambitious goals, with Chair Robyn Denholm noting the award would align the CEO’s incentives with long-term shareholder value.

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Elon Musk

Tesla board reveals reasoning for CEO Elon Musk’s new $1 trillion pay package

“Yes, you read that correctly: in 2018, Elon had to grow Tesla by billions; in 2025, he has to grow Tesla by trillions — to be exact, he must create nearly $7.5 trillion in value for shareholders for him to receive the full award.”

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tesla
(Credit: Tesla)

Tesla’s Board of Directors has proposed a new pay package for company CEO Elon Musk that would result in $1 trillion in stock offerings if he is able to meet several lofty performance targets.

Musk, who has not been meaningfully compensated since 2017, completed his last pay package by delivering billions in shareholder value through a variety of performance-based “tranches,” which were met and resulted in the award of billions in stock.

Elon Musk’s new pay plan ties trillionaire status to Tesla’s $8.5 trillion valuation

However, Musk was unable to claim this award due to a ruling by the Delaware Chancery Court, which deemed the payout an “unfathomable sum.”

Now, the company is taking steps to ensure Musk gets paid, as the Board feels that it is crucial to retain its CEO, who has been responsible for much of the company’s success.

This is not a statement to undermine the work of all of Tesla’s terrific employees, but a ship needs to be captained by someone, and Musk has proven he is the right person for the job.

The Board also believes that, based on a statement made by the company in its proxy, various issues will be discussed during the upcoming Shareholder Meeting.

Robyn Denholm and Kathleen Wilson-Thompson recognized Musk’s contributions in a statement, which encouraged shareholders to vote to approve the payout:

“We’re asking you to approve the 2025 CEO Performance Award. In designing the new performance award, we explored numerous alternatives. Ultimately, the new award aims to build upon the success of the 2018 CEO Performance Award framework, which ensure that Elon was only paid for the performance delivered and incentivized to guide Tesla through a period of meteoric growth. The 2025 CEO Performance Award similarly challegnes Elon to again meet a series of even more aspirational goals, including operational milestones focused on reaching Adjusted EBITDA targets (thresholds that are up to 28 times higher than the 2108 CEO Performance Award’s top Adjusted EBITDA milestone) and rolling out new or expanded product offerings (including 1 million Robotaxis in commercial operation and delivery of 1 million AI Bots), all while growing the company’s market capitalization by trillions of dollars.

Yes, you read that correctly: in 2018, Elon had to grow Tesla by billions; in 2025, he has to grow Tesla by trillions — to be exact, he must create nearly $7.5 trillion in value for shareholders for him to receive the full award.

In addition to these unprecedented performance milestones, the 2025 CEO Performance Award also includes innovative structural features, born out of the special committee’s considered analysis and extensive shareholder feedback. These features include supercharged retention (at least seven and a half years and up to 10 years to vest in the full award), structural protections to minimize stock price volatility due to administration of this award and, thereafter, incentives for Elon to participate in the Board’s continued development of a framework for long-term CEO Succession. If Elon achieves all the performance milestones under this principle-based 2025 CEO Performance Award, his leadership will propel Tesla to become the most valuable company in history.”

Musk will have a lot of things to accomplish to receive the 423,743,904 shares, which are divided into 12 tranches.

However, the Board feels he is the right person for the job, and they want him to remain the CEO. This package should ensure that he stays with Tesla, as long as shareholders feel the same way.

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Investor's Corner

Elon Musk’s new pay plan ties trillionaire status to Tesla’s $8.5 trillion valuation

Shareholders are expected to vote on the proposal at the annual meeting on November 6.

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USAFA_Hosts_Elon_Musk_(Image_1_of_17)_(cropped)
U.S. AIR FORCE ACADEMY, Colo. -- Tesla Inc. Chief Executive Officer Elon Musk poses for a photograph with U.S. Air Force Academy Cadets in Mitchell Hall during a tour hosted by Superintendent Lt. Gen. Richard Clark on April 7, 2022. Musk met with Academy senior leadership and delivered remarks to a crowd of cadets and faculty. (U.S. Air Force photo by Justin R. Pacheco)

Tesla’s board has proposed a new compensation package for CEO Elon Musk that could make him the world’s first trillionaire and Tesla the most valuable company in history. 

The 2025 CEO Performance Award, outlined in a securities filing on Friday, would be worth up to $900 billion in Tesla stock (NASDAQ:TSLA) if the automaker achieves a series of aggressive performance and valuation goals, according to the New York Times

Shareholders are expected to vote on the proposal at the annual meeting on November 6.

Tesla is aiming for an insane $8.5 trillion market cap

The package requires Musk to lift Tesla’s market capitalization from about $1.1 trillion today to $8.5 trillion over the next decade. At that level, Tesla would surpass every major public company in existence. Nvidia, currently the world’s most valuable firm, has a market cap of around $4.2 trillion today, as noted in a Motley Fool report. Microsoft and Apple follow at $3.8 and 3.6 trillion each, while Saudi Aramco is valued at around $1.5 trillion.

If Tesla achieves its $8.5 trillion target, it would be worth more than twice Nvidia’s present valuation and nearly eight times its current size. The compensation plan also requires Tesla’s operating profit to grow from $17 billion last year to $400 billion annually.

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Credit: Tesla

Elon Musk’s path to a trillionaire status

Apart from leading Tesla to become the world’s biggest company in history, Musk is also required to hit several product targets for the electric vehicle maker. These include the delivery of 20 million Tesla vehicles cumulatively, 10 million active FSD subscriptions, 1 million Tesla bots delivered, and 1 million Robotaxis in operation.

Tesla board chair Robyn Denholm and director Kathleen Wilson-Thompson said retaining Musk is “fundamental to Tesla achieving these goals and becoming the most valuable company in history.” If successful, the plan would raise Musk’s Tesla stake from 13% to about 25%, further consolidating his control. It would also result in the CEO earning $900 billion in TSLA stock, allowing him to effectvely become a trillionaire. 

The proposal mirrors a 2018 compensation plan that was invalidated in Delaware court earlier this year in the way that it is focused on very aggressive targets and operational milestones. Tesla has since shifted its corporate registration to Texas, where challenges from potential activist shareholders are less of a risk.

Tesla’s SEC filing can be viewed below.

www-sec-gov-Archives-edgar-data-1318605-000110465925087598-tm252289-4_pre14a-htm… by Simon Alvarez

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