Tesla’s (NASDAQ:TSLA) Q3 2024 earnings call comes on the heels of the company’s Q3 2024 Update Letter, which was released after the closing bell on Wednesday, October 23, 2024.
Tesla posted total revenues of $25.18 billion, with automotive revenues of $20.02 billion in Q3 2024. The company also posted non-GAAP earnings per share of $0.72 and GAAP EPS of $0.62. Tesla posted $2.7 billion GAAP operating income in the third quarter, and a record $33.6 billion in cash.
The following are live updates from Tesla’s Q3 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.
Q3 2024 Earnings Call live at 4:30pm CT https://t.co/FLyk30QBLk— Tesla (@Tesla) October 23, 2024
17:38 CDT – And that’s a wrap for Tesla’s Q3 2024 earnings call! Thank you so much for tuning in. We’ll see you on the next event!
17:35 CDT – Adam Jonas from Morgan Stanley asks about the relationship between Tesla and xAI. Are the two companies working together, or are they competing? Elon Musk notes that xAI has been helpful to Tesla AI quite a number of times. Musk also highlighted that xAI is trying to make artificial general intelligence or superintelligence. Tesla is trying to make autonomous cars.
“Tesla is focused on real-world AI. It’s quite different from an LLM,” Musk said.
17:27 CDT – Elon Musk admitted that there is a chance HW3 vehicles would not achieve the necessary safety level for unsupervised FSD. If this were to be the case, Musk noted that Tesla would replace Hardware 3 with Hardware 4 free of charge, at least for those who purchased FSD.
“There is some chance that HW3 does not achieve a safety level that allows for unsupervised FSD. If that turns out to be the case, we will upgrade those two have bought HW3 FSD for free,” Musk said.
17:24 CDT – A question about the Roadster is asked. Musk admitted that the Roadster’s reservation holders have been suffering for a while. He adds that the Roadster is the cherry on top of the icing on the cake. He did, however, state that the Roadster would have to be behind some of the company’s more prudent products.
17:18 CDT – All of the Tesla Semi that have been deployed, around 200 so far, are equipped with the necessary equipment for FSD. Musk noted that FSD would be a huge step for safety for trucks.
Another question is asked about Unsupervised FSD’s deployment in CA next year. Elon Musk noted that California loves regulations, but he would be shocked if Tesla does not get approved next year. Companies like Waymo are able to deploy driverless cars in the state, after all.
Musk quipped that there should be a federal approval process for autonomous vehicles. “I think we should have this national approval process for autonomy,” Musk said.
17:13 CDT – Another question is asked about the Tesla Semi. Tesla executives noted that the facility is on track to start initial builds next year, with production ramping full blast in 2026. Musk noted that there is “ridiculous demand” for the Semi considering the vehicle’s extremely low cost per mile.
Tesla executives noted that the Semi’s potential is already being proven by clients like PepsiCo. PepsiCo’s drivers do not want to drive any other truck once they try out the Semi.
17:09 CDT – Musk highlighted that the Cybercab is technically a $25,000 car, but it is an autonomous car, not manually driven.
Another question is asked about alleviating wait times at service centers. Company executives highlighted that Tesla is still focused on making vehicles that require as little service as possible.
Tesla, however, is coming up with a system that is inspired by a factory, where there are different lanes that are dedicated to different types of repairs. Automation is also a huge priority.
17:05 CDT – Elon Musk highlighted that the Cybercab does not just feature revolutionary design. It also features revolutionary manufacturing. “It is just really something special,” Musk said.
17:03 CDT – Investor questions begin! First question is about the more affordable car. Tesla executives reiterated that plans are underway to produce more affordable cars in the first half of next year. This, however, likely involves lowering the cost of current vehicles.
As for the $25,000 non-Robotaxi car, executives highlighted that Tesla is all in on autonomy. So there are no plans to produce a non-autonomous version of the Cybercab.
17:00 CDT – The CFO highlighted Tesla Energy’s margins, which passed 30% in Q3. This was due to a mix of projects during the quarter. He also noted that Tesla Energy is already filling in its 2024 production slots.
Tesla’s operating expenses declined quarter over quarter and year over year, partly due to the company’s restructuring, which happened in Q2.
16:58 CDT – Tesla’s CFO takes the stage. He noted that Tesla’s automotive revenues grew quarter over quarter and year over year. Tesla’s sales grew despite ASPs dropping.
He notes that Tesla is determined to grow unit volume while avoiding a buildup of inventory. To support this strategy, Tesla is rolling out compelling financing options that make its vehicles more attainable to consumers.
Automotive margins improved quarter over quarter as well. The executive also highlighted that Tesla is focused on the cost per vehicle, and there are numerous work streams within the company to squeeze that cost without compromising on customer experience.
16:53 CDT – Elon Musk noted that progress is being made in the Optimus program. He mentioned Optimus’ next-generation hand, which features 22 degrees of freedom.
“I feel confident saying that we have the most advanced humanoid robot by a long shot,” Musk said, adding that rival robots are missing the AI brain, if not the ability to produce the robots at very high volumes. Tesla has both, so the company’s potential to lead the sector is notable.
““I think Optimus will be the most valuable part of Tesla,” Musk said.
Musk also discussed Tesla Energy, particularly its Megafactories. He noted that Lathrop is ramped, and Shanghai is progressing well. “It won’t be long before we’re sipping 100 GWh a year of stationary storage at Tesla,” Musk said. Musk noted that Tesla needs its energy business to scale so the company can move the needle in the energy sector.
16:48 CDT – Elon Musk reiterated Tesla’s target of rolling out a ride-hailing service next year in California and Texas next year depending on regulatory approval.
He also noted that Tesla is no longer training compute-constrained. “The FSD is actually getting so good that it takes us a while to find mistakes. It takes a lot to figure out if Software A is better than Software B, since neither one of them are making mistakes,” Musk said.
16:46 CDT – Musk noted that Tesla’s internal estimate is that FSD would be safer than a human driver by Q2 next year.
“There’s no need to wait for the Robotaxi or the Cybercab to experience full autonomy. We expect to achieve that next year, with our existing vehicle line,” Musk said. He also noted that Tesla employees in the Bay Area now have an autonomous ride-hailing service. The service still uses safety drivers, though.
16:41 CDT – This does not mean to say that Tesla will not be relying on battery suppliers, of course. The growth of Tesla Energy and the company’s other businesses requires a lot of suppliers.
Musk also discussed the progress of FSD, such as the release of V12.5 and the Cybertruck’s FSD, as well as Actual Smart Summon (A.S.S.). He notes that FSD V13 is expected to be rolled out soon. V13 is expected to see 5-6x improvement in miles between interventions.
16:38 CDT – Musk noted that Tesla is still on track to deliver more affordable vehicles starting in the first half of 2025. “I do want to give some rough estimate, which is, I think, 20-30% growth next year,” Musk said. He also noted that he is “confident of Cybercab reaching volume production in 2026.” Tesla is estimating a production of 2 million Cybercabs per year.
Musk stated that the 4680 lines are doing well. Tesla’s 4680 is rapidly approaching the point where it os the most competitive cell in the market. “I think if we execute well, Tesla’s internally produced cell will be the most cost-competitive cell in North America,” Musk said.
16:35 CDT – Elon Musk makes his opening remarks. He gives a quick recap of Q3. He notes that Tesla achieved record deliveries at a time when the entire industry is challenged. “It’s notable that Tesla is profitable despite a very challenging automotive environment,” Musk said, highlighting that this quarter is a record Q3 for the company.
He notes that Tesla produced its 7 millionth car yesterday. He congratulates the Tesla team for pulling the feat off. Musk also stated that Tesla Energy is doing well. He also states that the “Tesla team did a phenomenal job” during the “We, Robot” event.
16:32 CDT – Tesla’s Head of Investor Relations opens the Q3 earnings call. Elon Musk and a number of executives are present.
Let’s go!
16:29 CDT – One minute to go! Let’s see if this call starts on time.
16:28 CDT – Tesla bull Gary Black of The Future Fund summarized the Q3 earnings results pretty well. It’s a beat.
$TSLA beat solidly on 3Q adj eps ($.72 vs $.60 est and vs my $.56 est). TSLA +9.4% AH. Driving the beat:
– Auto GM ex-reg credits was 17.1% vs 14.9% WS est.
– Energy profits soared +90% (energy GM 30.5% vs 24.4% YoY)
– Service profits soared +91% (services GM 8.8% vs 6.0% YoY)…— Gary Black (@garyblack00) October 23, 2024
16:25 CDT – It’s five minutes before the earnings call and there’s still no music. Oh, boy, I hope they start this one on time. No reason to be late anyway, since the Q3 results were extremely impressive. TSLA stock after hours is up 9.44% as of writing.
Aaand there’s Tesla’s techno music. We’re close, everyone.
16:15 CDT – Hello, everyone, and welcome to our live blog of Tesla’s third quarter 2024 earnings call. Tesla’s Q3 results are the best we’ve seen in a long time, so this upcoming earnings call will probably be pretty memorable. Especially impressive was the fact that the Cybertruck reached positive gross margin in the third quarter. That’s pretty nuts!
Here’s the livestream of Tesla’s Q3 2024 earnings call.
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.
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