Investor's Corner
LIVE BLOG: Tesla (TSLA) Q3 2019 earnings call updates
Tesla’s (NASDAQ:TSLA) third-quarter earnings call comes on the heels of a blockbuster earnings report that saw the electric car maker prove its critics wrong by posting a surprise profit and showing earnings per share of $1.91, far beyond Wall St’s expec. By beating Wall Street’s estimates, Tesla appears to be on the cusp of changing the narrative surrounding the company’s immediate future once more.
As revealed in the company’s Q3 2019 Update Letter, Tesla is GAAP profitable once more. The company is also seeing free cash flow, something that was largely unexpected during the days leading up to the earnings report.
For today’s earnings call, Tesla’s executives are expected to address questions surrounding the company’s plans for the immediate and CEO Elon Musk’s apparent ability to now underpromise and overdeliver. Tesla stock is currently trading +20.30% at $306.38 in after-hours trading. The earnings call will likely affect these results further, for better or for worse.
The following are live updates from Tesla’s Q3 2019 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.
16:35 PT – And that concludes the third-quarter earnings call! We saw a far more tempered, far more restrained Elon Musk, and a more confident Zach Kirkhorn. Calm, composed and quick, this earnings call appears to be one of Tesla’s smoothest yet. I’m inclined to be more optimistic about the company’s future after this Q&A session. And it appears that the company’s shareholders are too. At the end of the call, TSLA stock has remained where it was when the session started. No wild swings — and everyone’s the better for it.
16:34 PT – Dan Levy from Credit Suisse questions Gigafactory 3’s Model 3 production ramp, and how smooth will it be. Elon notes that he is optimistic about Gigafactory 3’s ramp, but not on a week-by-week basis. This is quite impressive for Elon Musk. In previous earnings calls where he was much more emotionally charged, I can’t help but think that he would have given an ambitious estimate as a response. Not so much anymore.
16:30 PT – Pierre Ferragu of New Street Research asks about how Tesla’s thinking about Model S and X have evolved, and if Model 3 has cannibalized sales of the flagships. Elon explains that the S and X are niche products, made in low volumes and higher prices. “We continue to make them more for sentimental reasons than anything else,” Musk said, adding that “If you’re buying an electric (full-sized sedan) and you don’t buy a Model S, you’re making a mistake.” It is evident from Elon’s statements that the Model S still holds a special, special place in his heart.
Kirkhorn did state that Model S and X are seeing more production lately due to increasing demand. Though delivery numbers for the Model S and X this quarter actually “understate the interest in the product,” he said. Elon also announced an upcoming upgrade for the Model S, X, and 3 that will improve comfort, feel and range. VP for Tech Drew Baglino adds that this upcoming updates will make Supercharging better too.
16:23 PT – Emmanuel Rosner of Deutsche Bank asks about electric pickups, particularly the Tesla Pickup Truck. He also asks about the baseline for Tesla’s baseline for orders quarter to date. Musk responds by stating that the Tesla Cybertruck is the company’s best ever, though he also mentioned that he could be wrong about this.
Kirkhorn, speaking about Tesla’s baseline orders, noted that the company is focused on moving quickly as it can. “We believe everyone should be driving an electric car,” he said. Musk adds a long-term (very long) estimate of 20 million vehicles a year.
16:20 PT – Maynard Um of Macquarie Research asks about Tesla’s software and its potential monetization opportunities, Elon reiterated the company’s intention of giving customers the most fun they can have with a car. “People spend a couple hours on average in a car. It’s a lot of time,” Musk said, adding that Tesla can look at its software for profit down the line, but for now, the company is simply focused on improving user experience.
16:16 PT – Morgan Stanley asks if vehicles produced in China could be the most profitable vehicle in Tesla’s lineup. Kirkhorn states that Tesla expects China vehicles to be in line with the cars from Fremont. The company is still working on landing the right mix for the Chinese market. “For now, it’s safe to assume that it’s in line with the margins of cars coming out of the Fremont factory,” he said.
When asked if Tesla will be open to the idea of becoming a supplier of batteries and drivetrains to other OEMs, Elon Musk stated that it is in line with Tesla’s mission to help other carmakers in their EV initiatives. “It’s something we’re open to,” Musk said.
16:13 PT – Daniel Galves from Wolfe Research. He asks about the auto gross margin from Q2 to Q3, as well as potential headwinds for the Shanghai plant. CTO Kirkhorn states that Tesla is working hard to prevent ramp inefficiencies for Gigafactory 3 that it experienced in Fremont. He also explained that Tesla is working on a way to implement a “targeted” way of adjusting prices for its products.
16:08 PT – Elon Musk confirms that Gigafactory 3 Phase 2 is for battery and module production. More construction is due in Shanghai as well, as preparations for Model Y production gets underway. As for Tesla Insurance, the CTO stated that the service will be expanded to other US states, as well as some foreign territories. “The goal here is to make sure that customers have an alternative if their insurance rates are high,” Kirkhorn said.
16:05 PT – Asked about the DeepScale acquisition and how it could help Tesla’s FSD initiative, Musk stated that the startup is a very tiny company. That being said, DeepScale has expertise in reducing the size of Neural Nets, “which is very helpful in slightly accelerating FSD,” he said.
16:00 PT – When asked if Tesla would consider selling NoA and Summon features as individual modules, Musk stated that the company will remain selling the suite as a whole. Responding to an inquiry about the Model Y’s launch and if it would interfere with Model 3 production, Musk assured that the electric sedan should not be affected that much.
15:57 PT – Questions from Say are up. First up, advertising. Is word of mouth enough? Elon says it’s more than enough. “We have no plans to advertise at this time,” he says. Tesla may do advertising in the future, but they will be more informative in nature.
When asked about Tesla Energy, Musk stated that he expects the business to be even bigger than the company’s automotive business. “Tesla Energy is the least appreciated element (of Tesla). For about 18 months, almost 2 years, we had to divert a tremendous amount of resources for the Model 3 production ramp,” Musk said, explaining that Tesla Energy’s resources paid the price for the electric sedan’s challenges. Now that Model 3 is humming along, Tesla solar and storage could see “crazy growth” in the future.
15:53 PT – Kunal Girotra, Energy Operations, discusses the improvements in Tesla’s energy business, which has seen a rise in recent months. “If it doesn’t print money, we’ll fix it or take it back,” Musk confidently said, referring to the company’s revived solar business. He also mentions how homes’ value increases if they are equipped with clean energy equipment such as solar panels.
Girotra also mentions that Tesla is able to offer low solar prices because it doesn’t do advertising, lowering the company’s costs of acquisition. An enthusiastic Elon Musk adds more details, interrupting Kunal. This is not annoyed Elon though — rather, the CEO in this call is more like a very excited Musk.
15:47 PT – CFO Zachary Kirkhorn takes the stage. He explains how Tesla achieved GAAP profitability. Model S and X ASPs increased, Model 3 ASPs declined slightly, the CFO noted. “With the release of Smart Summon, we were able to recognize $30 million of deferred revenue,” Kirkhorn added, emphasizing Tesla’s strong positive free cash flow in the third quarter.
Kirkhorn emphasizes that despite increases to production backlogs, orders continue to grow for the company’s electric cars. Demand is strong. The no-demand narrative is dead, and Tesla is stepping on its carcass at this point. The CFO also pledges to further reduce costs.
15:43 PT – Early access release of a “feature complete” version of Full Self-Driving is expected to be rolled out by the end of the year, says Musk. He adds that Tesla is focused on opening more Gigafactories in several countries. Lastly, Tesla is also releasing Solar Roof Version 3, which is “finally ready for the big time.” Official product launch of Solar Roof Version 3 will be done tomorrow.
15:40 PT – CEO Elon Musk thanks the Tesla team for pushing hard to achieve GAAP profitability. “Operating costs are at their lowest levels since Model 3 production started,” Musk said. He also mentions that Gigafactory 3 is already conducting Model 3 production activities. Equipment in Gigafactory 3 was installed while the factory shell was still under construction.
Gigafactory 4 will be announced by the end of 2019. Tesla is “confident” that Model Y could enter production in Summer 2020. “Model Y will outsell S, X, and 3 combined.” Musk also mentions V10, which includes the first version of Smart Summon. “There’s now been a million uses of Smart Summon.” A new version of Smart Summon is set to be released soon, taking the learnings that were gathered from the feature’s initial release.
15:35 PT – And so it begins. Senior Director of Investor Relations Martin Viecha takes the stage. He provides an overview of the topics that the earnings call will cover. Hands over the stage to Elon Musk.
15:31 PT – The earnings call should start any moment now. That being said, it’s understandable if Tesla is taking its time. Unlike the previous quarters, the company is coming to this call not to explain a loss, but to highlight a victory.
15:26 PT – It’s now just a few minutes before the Q3 2019 earnings call is expected to begin. This is a very exciting time for Tesla.
Tesla stock (NASDAQ: TSLA) has landed an elusive “must own” status from Wall Street firm Melius, according to a new note released early this week.
Analyst Rob Wertheimer said Tesla will lead the charge in world-changing tech, given the company’s focus on self-driving, autonomy, and Robotaxi. In a note to investors, Wertheimer said “the world is about to change, dramatically,” because of the advent of self-driving cars.
He looks at the industry and sees many potential players, but the firm says there will only be one true winner:
“Our point is not that Tesla is at risk, it’s that everybody else is.”
The major argument is that autonomy is nearing a tipping point where years of chipping away at the software and data needed to develop a sound, safe, and effective form of autonomous driving technology turn into an avalanche of progress.
Wertheimer believes autonomy is a $7 trillion sector,” and in the coming years, investors will see “hundreds of billions in value shift to Tesla.”
A lot of the major growth has to do with the all-too-common “butts in seats” strategy, as Wertheimer believes that only a fraction of people in the United States have ridden in a self-driving car. In Tesla’s regard, only “tens of thousands” have tried Tesla’s latest Full Self-Driving (Supervised) version, which is v14.
Tesla Full Self-Driving v14.2 – Full Review, the Good and the Bad
When it reaches a widespread rollout and more people are able to experience Tesla Full Self-Driving v14, he believes “it will shock most people.”
Citing things like Tesla’s massive data pool from its vehicles, as well as its shift to end-to-end neural nets in 2021 and 2022, as well as the upcoming AI5 chip, which will be put into a handful of vehicles next year, but will reach a wider rollout in 2027, Melius believes many investors are not aware of the pace of advancement in self-driving.
Tesla’s lead in its self-driving efforts is expanding, Wertheimer says. The company is making strategic choices on everything from hardware to software, manufacturing, and overall vehicle design. He says Tesla has left legacy automakers struggling to keep pace as they still rely on outdated architectures and fragmented supplier systems.
Tesla shares are up over 6 percent at 10:40 a.m. on the East Coast, trading at around $416.
Investor's Corner
Tesla analyst maintains $500 PT, says FSD drives better than humans now
The team also met with Tesla leaders for more than an hour to discuss autonomy, chip development, and upcoming deployment plans.
Tesla (NASDAQ:TSLA) received fresh support from Piper Sandler this week after analysts toured the Fremont Factory and tested the company’s latest Full Self-Driving software. The firm reaffirmed its $500 price target, stating that FSD V14 delivered a notably smooth robotaxi demonstration and may already perform at levels comparable to, if not better than, average human drivers.
The team also met with Tesla leaders for more than an hour to discuss autonomy, chip development, and upcoming deployment plans.
Analysts highlight autonomy progress
During more than 75 minutes of focused discussions, analysts reportedly focused on FSD v14’s updates. Piper Sandler’s team pointed to meaningful strides in perception, object handling, and overall ride smoothness during the robotaxi demo.
The visit also included discussions on updates to Tesla’s in-house chip initiatives, its Optimus program, and the growth of the company’s battery storage business. Analysts noted that Tesla continues refining cost structures and capital expenditure expectations, which are key elements in future margin recovery, as noted in a Yahoo Finance report.
Analyst Alexander Potter noted that “we think FSD is a truly impressive product that is (probably) already better at driving than the average American.” This conclusion was strengthened by what he described as a “flawless robotaxi ride to the hotel.”
Street targets diverge on TSLA
While Piper Sandler stands by its $500 target, it is not the highest estimate on the Street. Wedbush, for one, has a $600 per share price target for TSLA stock.
Other institutions have also weighed in on TSLA stock as of late. HSBC reiterated a Reduce rating with a $131 target, citing a gap between earnings fundamentals and the company’s market value. By contrast, TD Cowen maintained a Buy rating and a $509 target, pointing to strong autonomous driving demonstrations in Austin and the pace of software-driven improvements.
Stifel analysts also lifted their price target for Tesla to $508 per share over the company’s ongoing robotaxi and FSD programs.
Investor's Corner
Tesla wins $508 price target from Stifel as Robotaxi rollout gains speed
The firm cited meaningful progress in Tesla’s robotaxi roadmap, ongoing Full Self-Driving enhancements, and the company’s long-term growth initiatives.
Tesla received another round of bullish analyst updates this week, led by Stifel, raising its price target to $508 from $483 while reaffirming a “Buy” rating. The firm cited meaningful progress in Tesla’s robotaxi roadmap, ongoing Full Self-Driving enhancements, and the company’s long-term growth initiatives.
Robotaxi rollout, FSD updates, and new affordable cars
Stifel expects Tesla’s robotaxi fleet to expand into 8–10 major metropolitan areas by the end of 2025, including Austin, where early deployments without safety drivers are targeted before year-end. Additional markets under evaluation include Nevada, Florida, and Arizona, as noted in an Investing.com report. The firm also highlighted strong early performance for FSD Version 14, with upcoming releases adding new “reasoning capabilities” designed to improve complex decision-making using full 360-degree vision.
Tesla has also taken steps to offset the loss of U.S. EV tax credits by launching the Model Y Standard and Model 3 Standard at $39,990 and $36,990, Stifel noted. Both vehicles deliver more than 300 miles of range and are positioned to sustain demand despite shifting incentives. Stifel raised its EBITDA forecasts to $14.9 billion for 2025 and $19.5 billion for 2026, assigning partial valuation weightings to Tesla’s FSD, robotaxi, and Optimus initiatives.
TD Cowen also places an optimistic price target
TD Cowen reiterated its Buy rating with a $509 price target after a research tour of Giga Texas, citing production scale and operational execution as key strengths. The firm posted its optimistic price target following a recent Mobility Bus tour in Austin. The tour included a visit to Giga Texas, which offered fresh insights into the company’s operations and prospects.
Additional analyst movements include Truist Securities maintaining its Hold rating following shareholder approval of Elon Musk’s compensation plan, viewing the vote as reducing leadership uncertainty.
@teslarati Tesla Full Self-Driving yields for pedestrians while human drivers do not…the future is here! #tesla #teslafsd #fullselfdriving ♬ 2 Little 2 Late – Levi & Mario
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