Tesla’s (NASDAQ:TSLA) third-quarter 2022 earnings call comes on the heels of the company’s Q3 2022 Update Letter. Tesla’s Q3 numbers were quite impressive, with the company posting record revenue, operating profit, and free cash flow (FCF).
Tesla’s FCF also exceeded $8.9 billion in the last 12 months, and operating margins reached 17.2% in the third quarter. Similar to previous quarters, Tesla’s war chest grew by $2.2 billion in the third quarter, providing the company with cash and marketable securities of $21.1 billion.
Impressively enough, Tesla posted some key updates on its vehicle projects in the Q3 2022 Update Letter. The Tesla Cybertruck, for example, is already listed as a vehicle under “Tooling” in Gigafactory Texas, while the Tesla Semi has been listed as a vehicle under “Early Production” in Nevada. Tesla’s Optimus is not yet listed in the Q3 2022 Update Letter, though it won’t be surprising if the humanoid robot gets included in the document in the near future.
The following are live updates from Tesla’s Q3 2022 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.
17:33 CDT – And that wraps up Tesla’s Q3 2022 earnings call. Elon was grounded the entire time, and he did not go off tangent at all. Looks like the fourth quarter will be an exciting time for Tesla, though, so it would be pretty cool to see everything unfold.
We’ll see you in the next Live Blog, everyone! Cheers!
17:30 CDT – William Stein from Truist asked a question about FSD and Optimus. Elon reiterated his belief that Tesla can achieve full self-driving 100%. Elon noted that FSD is almost there, so Tesla just has to show regulators what the system can really do.
As for Dojo, Tesla would need to show that it’s better than today’s top tech companies like NVIDIA. “The jury’s still out on Dojo,” Musk said, though he also stated that Tesla believes the architecture of Dojo is the right architecture to win.
The CEO also noted that Optimus’ probability of success is “extremely high.”
17:28 CDT – Toni Sacchogani of Bernstein asked where Tesla’s 4680 cells being deployed today. Are they in the Semi, Model Y, and will it restrain Cybertruck? Elon noted that the Semi does not use 4680 cells right now. Tesla is making Model Ys from Giga Texas with 4680 cells, however.
That being said, Elon noted that Tesla does not expect the 4680 cells to be a gating factor in the Cybertruck’s ramp.
17:25 CDT – Pierre Ferragu from News Street Research asked about Tesla’s products and its efforts to scale. Executives noted that Tesla is viewing its growth target in years. It takes time, but Tesla is working hard on specifics like costs. Tesla’s 4680 cells are a good example of this as its timeline is all the way to 2026. Tesla is considering all the steps from costs to productions, from mine to cell.
On the 4680 ramp, “No ramp is ever easy. It’s still very challenging to get to the end,” Tesla executives said.
17:21 CDT – Kirkhorn noted that while commodity increases peaked the most in Q3, Tesla sees a small amount of reduction in commodity prices for production. Elon also noted that he expects to see reductions in 2023.
When asked about Twitter and a potential umbrella company, Musk noted that he is more of a technologist or engineer than he is an investor. “I’m excited about the Twitter situation,” Musk said, adding that the social media company’s value could be an order of magnitude than its current valuation today.
17:18 CDT – Canaccord Genuity analyst George Gianarikas asked about Tesla’s prices. Elon notes that things like battery components like lithium are increasing even as some costs such as shipping are decreasing. Musk highlighted that there are varying commodities with different price trends to consider.
17:14 CDT – Colin Rusch from Oppenheimer asks about Tesla’s operating expenses and where Tesla can invest. Kirkhorn noted that Tesla’s operating leverage suggests that the company can optimize its operations even more. It’s hard to keep it flat since Tesla is growing so fast, but it should normalize. “Operating leverage has improved quite a bit. It’s the lowest this quarter,” Kirkhorn said.
“We’re investing in everything we can think of to possibly invest in, and we’re still generating cash,” Musk said. Tesla executives also noted that Optimus would definitely change things.
17:11 CDT – Colin Langan from Wells Fargo asked about any updates on FSD. Musk noted that Tesla intends to bring FSD Beta to FSD customers by the end of the year. The CEO reiterated that FSD should be able to provide customers with a generally hands-free solution for driving. Musk also noted that customers would probably have to intervene or stop FSD very little.
17:07 CDT – Analyst questions begin. Adam Jonas of Morgan Stanley asks if Tesla will be going into mining. Elon explains that Tesla can, but if the company could find a reliable supplier, the company will make a deal instead. “We’ll do whatever we have to… but if we have to mine, we will mine,” Musk said.
The CEO also spoke on government permits or requirements for mining. He highlighted that some materials
17:05 CDT – A question about Tesla’s third platform is asked. Musk responded that while Tesla does not talk exact dates, the primary focus of the company’s vehicle development team is this next generation of cars. Musk estimates that it will be half the cost of the Model 3 and Model X, and its production will probably be higher than all of the company’s current products combined.
Think Tesla producing two cars for the same amount of effort and time to produce one Model 3. That will be a game-changer.
Musk also noted that when he earlier said that he believes Tesla could be bigger than Apple and Saudi Aramco combined, he was not talking about Optimus at all.
17:02 CDT – A question about how Tesla can adjust to a potential prolonged recession was asked. “To be frank, we’re very pedal to the metal, rain or shine,” Musk said, explaining that Tesla is not reducing production recession or no recession. After all, electric cars are now inevitable.
“I wouldn’t say it’s recession-proof but it’s certainly recession-resilient,” Musk said. He also stated that Tesla sees its Energy business growing faster than the company’s electric vehicle business.
“We can withstand a lot of down trends,” Kirkhorn said.
16:57 CDT – A question about the progress of the 4680 battery cell production ramp was asked. Tesla executives noted that the battery ramp is actually going well. The focus now is cost and further expanding production in North America. “It’s looking good,” Musk said.
“Our goal is to reach 1000 GW a year in North America,” the CEO added.
16:56 CDT – A question about Germany’s energy crisis and potential delays to Giga Berlin was asked. Kirkhorn answered that Tesla does not believe that such a crisis will be affecting Giga Berlin. “We’ll see how this plays out,” Kirkhorn said.
A question on the Cybertruck’s pricing and final design was also asked. Elon jokingly also asked when he could get his Cybertruck Beta unit, though Tesla executives noted that the preparations are ongoing at Giga Texas. “There are preparations here at Giga Texas for Cybertruck,” Tesla execs noted.
Tesla Semi deliveries could also happen around December 1st, Elon noted. Also, to the naysayers, the Semi will not sacrifice any cargo-carrying capacity. It will have 500 miles of range with cargo. Tesla is aiming for 50,000 units of the Semi to be built in North America.
And of course, Elon made a hydrogen joke. “You obviously don’t need hydrogen for heavy trucking,” the CEO joked.
16:52 CDT – A question was asked about Tesla’s 50% annualized growth was asked. Musk answered that ”To the best of our knowledge that Tesla will continue to grow,” Musk said. When asked about future products, Musk flatly joked that nope, he won’t talk about them. He technically can, but he won’t.
“At Tesla, we’re always committed to continuous improvement,” Musk said.
16:49 CDT – A question about China’s backlog and recent order intake trends is asked. Elon notes that Tesla is confident of a strong Q4, with the company growing in production every year by 50%, but not delivery because there aren not enough transportation vehicles to move the cars. There’s quite a bit of logistics to think about, after all.
16:47 CDT – Shareholder questions begin with a question about the Inflation Reduction Act. Elon notes that Tesla believes that it can meet the requirements of the IRA, both on its vehicles and energy products. “We do expect to meet IRS requirements,” Musk said.
16:45 CDT – Zach Kirkhorn takes the floor, noting that Tesla’s margins were weighed down a bit due to the costs of Giga Berlin and Texas. He also highlighted that every car built in Giga Berlin and Texas contributes greatly to Tesla’s numbers.
Tesla Energy also achieved its best gross profit yet, driven largely by the Megapack. With this in mind, and despite supply chain risks, Tesla is still looking to achieve 50% growth this year.
16:41 CDT – Elon noted that it is possible for Tesla to do a buyback in the range of about $5-$10 billion. “It is certainly possible to do a buyback in the order of $5-$10 million. It’s likely that we’ll do some meaningful buyback,” Musk said.
Musk, however, highlighted that it’s important to look at Tesla’s long-term trend. This makes sense. Even if the company encounters short-term headwinds, the company’s long-term prospects are extremely bright. Elon noted that he believes Tesla can far exceed Apple’s current market cap.
Musk even hinted that he sees a path where Tesla can become larger than Apple. “Now throughout the opinion we can far exceed Apple’s current market cap. I can see a path that Tesla can be worth more than Apple and Saudi Aramco combined.”
“It’s an incredibly exciting future, an unprecedented future,” Musk said, adding that credit for Tesla’s success is due to the company’s team. “You guys rock. You’re the one making everything possible.”
16:38 CDT – Elon reiterates Tesla’s target of achieving a wide release of FSD Beta by the end of the year. “At this quarter, we expect to go to a wide-release of FSD in North America,” Musk noted, stating that FSD’s wide release is scheduled about a month from now. He also highlighted that safety with FSD is a lot better compared to when it is not on, according to Tesla’s data.
Musk also reiterates that Tesla has huge demand, debunking concerns that the company is seeing a demand problem of sorts. According to Musk, Tesla is delivering every vehicle its makes and keeping operation margins strong.
16:36 CDT – Elon notes that the Fremont team achieved record production in Q3, and it will continue to improve. This is pretty cool since the Fremont Factory is already one of the most productive car plants in the United States.
Looks like AI Day 2022 was successful. AI day was a recruiting event, and it did its job. “We’ve seen a massive influx of world-class resumes,” Elon said.
16:35 CDT – Elon takes the floor. Q3 was another record quarter for Tesla. He reviews the company’s numbers in Q3. Elon also noted that Tesla is looking forward to a record-breaking Q4. “Knock on wood, it looks like we’ll have an epic end of year,” he said.
Tesla is finally growing some traction in its 4680 battery production as well. Structural packs, here we go.
16:32 CDT – Martin Viecha formally starts the Q3 2022 earnings call. Elon, Zach Kirkhorn, and other execs are present.
16:30 CDT – Any minute now. For the last few earnings calls, Tesla has actually started on time. Let’s see if this is the case today as well.
16:25 CDT – Last five minutes, everyone. Unless Elon time of course.
16:15 CDT – Hi everyone, and welcome to another Tesla earnings call live blog! Tesla’s third-quarter results were quite impressive. This was despite Tesla missing analyst expectations on some metrics, such as revenue. This has caused Tesla stock to feel some pressure on Wednesday’s after hours. Longtime Tesla bull Gene Munster, managing partner of Loup Ventures, noted that the market’s reaction might be due to the fact that Tesla typically beats expectations.
“Tesla is a company that typically has been beating numbers. The reaction you’re seeing is that people are a bit taken aback by the fact that they missed,” Munster said.
Not gonna lie. Gene Munster has a point.
Don’t hesitate to contact us with news tips. Just send a message to simon@teslarati.com to give us a heads up.
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 stock (NASDAQ: TSLA) just got a price target boost from its biggest bear, Gordon Johnson of GLJ Research, who raised his expected trading level to one that is 95 percent lower than its current trading level.
Johnson pushed his Tesla price target from $19.05 to $25.28 on Wednesday, while maintaining the ‘Sell’ rating that has been present on the stock for a long time. GLJ has largely been recognized as the biggest skeptic of Elon Musk’s company, being particularly critical of the automotive side of things.
Tesla has routinely been called out by Johnson for negative delivery growth, what he calls “weakening demand,” and price cuts that have occurred in past years, all pointing to them as desperate measures to sell its cars.
Johnson has also said that Tesla is extremely overvalued and is too reliant on regulatory credits for profitability. Other analysts on the bullish side recognize Tesla as a company that is bigger than just its automotive side.
Many believe it is a leader in autonomous driving, like Dan Ives of Wedbush, who believes Tesla will have a widely successful 2026, especially if it can come through on its targets and schedules for Robotaxi and Cybercab.
Justifying the price target this week, Johnson said that the revised valuation is based on “reality rather than narrative.” Tesla has been noted by other analysts and financial experts as a stock that trades on narrative, something Johnson obviously disagrees with.
Dan Nathan, a notorious skeptic of the stock, turned bullish late last year, recognizing the company’s shares trade on “technicals and sentiment.” He said, “From a trading perspective, it looks very interesting.”
Tesla bear turns bullish for two reasons as stock continues boost
Johnson has remained very consistent with this sentiment regarding Tesla and his beliefs regarding its true valuation, and has never shied away from putting his true thoughts out there.
Tesla shares closed at $431.40 today, about 95 percent above where Johnson’s new price target lies.
Tesla says its Texas lithium refinery is now operational and unlike anything in North America
Tesla Optimus V3 gets early third-party feedback, and it’s eye-opening
