Tesla Inc. (NASDAQ:TSLA) CEO Elon Musk has shared that the company would need to scale up its "TeraFab" in-house chip-building efforts amid an AI push during its earnings call.Chips Are The ‘Limiting Factor' For Tesla's GrowthOn Wednesday, Musk was asked about Tesla's chip-building efforts during the earnings conference. Musk said that the AI5 Chip design was currently "the number one most critical thing to get done." However, he said that chip production remains a "limiting factor for Tesla's growth" in th ...

Financial Data and Key Metrics Changes - In Q4 2025, automotive margins, excluding credits, improved sequentially from 15.4% to 17.9% despite a 16% decrease in deliveries [21] - Total gross margin ended the quarter at over 20.1%, a level not achieved in the last two years, despite lower fixed cost absorption and over $500 million in tariffs [24] - Net income was negatively impacted by a 23% depreciation in Bitcoin holdings and unfavorable foreign exchange effects [25] Business Line Data and Key Metrics Changes - Automotive gross profit remained flat sequentially despite lower deliveries, primarily due to a favorable regional mix with more deliveries in APAC and EMEA [21] - Energy segment achieved nearly $12.8 billion in revenue with a year-over-year growth of 26.6%, driven by high deployments of Megapack and Powerwall [22] - Services and others margin declined from 10.5% to 8.8% due to higher employee-related costs in service centers [23] Market Data and Key Metrics Changes - Record deliveries were noted in smaller countries like Malaysia, Norway, Poland, Saudi Arabia, and Taiwan, contributing to a larger backlog than in recent years [20] - The energy team reported strong growth rates and continued demand for energy products, indicating a robust market outlook [12] Company Strategy and Development Direction - The company is transitioning to a subscription-based model for Full Self-Driving (FSD), which is expected to impact automotive margins in the short term [21] - Significant investments are planned for 2026, with CapEx expected to exceed $20 billion, focusing on six factories and expanding production capacity [26][27] - The company aims to replace the Model S and X production lines with a factory for Optimus robots, targeting a production goal of 1 million units per year [7][14] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, emphasizing a shift towards autonomy and the potential for universal high income driven by advancements in AI and robotics [2][4] - The company is cautious about the rollout of unsupervised FSD, ensuring safety while gradually increasing autonomy capabilities [54][55] - Management acknowledged the challenges posed by increased low-cost competition and policy uncertainties affecting margins in the energy sector [22] Other Important Information - The company is making substantial investments in AI chips and solar cell manufacturing, indicating a long-term strategic focus on these areas [5][13] - The transition to a fully autonomous vehicle market is expected to significantly alter the transportation landscape, with the Cybercab model designed specifically for this purpose [30][34] Q&A Session Summary Question: What is Tesla's view on the future global car sales and its impact on EV strategy? - Tesla believes that autonomy and Cybercab will significantly change the global market size and mix, with a focus on efficiency and manufacturing at scale [28][29] Question: Are there plans to launch new models for different price segments? - Tesla has launched its least expensive models recently and continues to expand globally, aiming to provide a premium ride experience with the Cybercab [34][35] Question: What is the current bottleneck for increasing robotaxi deployment? - The company is learning from the scaled robotaxi service and is focused on solving the unsupervised FSD problem while expanding the fleet size [41][42] Question: What are the constraints on memory procurement? - Tesla's AI is designed to be compute and memory efficient, and the company is confident in its ability to manage memory constraints in the near term [91][92]

Tesla's (TSLA) on-again, off-again relationship with its in-house supercomputer just took another surprising turn. CEO Elon Musk announced over the weekend that the electric vehicle maker will resume development of Dojo3, its third-generation AI chip project, after abruptly shutting it down just five months ago. The decision marks a strategic reversal for the automaker as it seeks to regain control over critical artificial intelligence infrastructure. The revival comes as Tesla reports progress on its AI ...

Core Insights - Tesla is at a critical inflection point, having achieved significant milestones in both automotive and energy sectors, with the Model Y being the best-selling vehicle worldwide in 2024 and energy deployment reaching 31 gigawatt hours, more than double that of 2023 [2][3] - The company emphasizes its commitment to sustainability, reporting that its products helped avoid nearly 32 million metric tons of greenhouse gas emissions in 2024, a 70% increase year over year [2][3] - Safety remains a top priority, with Tesla's vehicles achieving a crash rate that is ten times better than the average US driver, and improvements in autopilot technology expected to enhance safety further [3][4] Business Performance - The Model Y continues to dominate global sales, reinforcing Tesla's leadership in the automotive industry [2] - The energy business is expanding rapidly, with a deployment of 31 gigawatt hours in 2024, indicating strong growth potential [2] - Tesla's installed base serves as a foundation for future value creation through services like RoboTaxi and virtual power plants [2] Sustainability Efforts - Tesla's products have significantly reduced greenhouse gas emissions, showcasing the company's commitment to environmental sustainability [2] - The company is focused on improving safety standards and reducing resource impact throughout the product lifecycle, from raw material extraction to end-of-life [3][4] Shareholder Engagement - The annual shareholder meeting included discussions on various proposals, with the board encouraging shareholder participation and feedback [5][6] - Several shareholder proposals were presented, including those related to sustainability metrics in executive compensation and governance reforms [7][8][9] Future Outlook - Elon Musk highlighted the potential of the Optimus robot, suggesting it could revolutionize industries and significantly impact the global economy [20][21][22] - The company plans to ramp up production of the CyberCab, designed for autonomous operation, with ambitious production targets [27][29] - Tesla aims to enhance its AI capabilities with the development of specialized chips, which are expected to improve performance and efficiency [30][31]

Summary of Tesla, Inc. (TSLA) Conference Call Company Overview - **Company**: Tesla, Inc. (TSLA) - **Industry**: Automobile Manufacturers Key Financial Highlights - **3Q25 Results**: - Revenue: $28.1 billion, up 11.6% year-over-year (y/y) and 24.9% quarter-over-quarter (q/q) [9] - Automotive Revenue: $21.2 billion, 3% above consensus, and up 5.9% y/y [9] - Energy Revenue: $3.4 billion, up 43.7% y/y but missed consensus by 3% [9] - Gross Profit: $5.1 billion with a margin of 18% [10] - Free Cash Flow (FCF): $4 billion, significantly above consensus estimate of $1.5 billion [12] Earnings Performance - **Earnings Per Share (EPS)**: - Adjusted EPS: $0.50, missing consensus of $0.59 [12] - Tax impact accounted for approximately $0.05 of the miss [12] - **Operating Profit**: $1.6 billion with a margin of 5.8%, below UBS estimate of $1.9 billion [11] Production and Capacity Expansion - **Production Capacity**: Current capacity is approximately 2.4 million units, with plans to expand to 3 million units within 24 months [6] - **2025 Production Forecast**: Expected to be around 1.7 million units, with a consensus of 1.9 million units [6] - **Cybercab Production**: Expected to start in Q2 2026 [6] Strategic Initiatives - **Transition to AI**: Tesla is navigating a shift from being primarily an EV maker to focusing on AI technologies [1] - **Optimus Project**: - Targeting to unveil Optimus V3 in Q1 2026, with production expected to start at the end of 2026 [6] - Higher capital expenditure anticipated for 2026, significantly above $9 billion [26] - **Robotaxi Service**: - Completed 250,000 miles in Austin and over 1 million miles in San Francisco [7] - Plans to operate in 8-10 metro areas by year-end [7] Market Dynamics and Challenges - **Tariff Impact**: Total tariff impact in Q3 was over $400 million, affecting both automotive and energy segments [14] - **Market Cap Valuation**: Current market cap reflects approximately $900 billion in value attributed to AI ventures [1] Valuation Metrics - **Price Target**: $247 based on a multiple of 127x the 2027 EPS forecast [8] - **Market Capitalization**: Approximately $1,548 billion [4] - **P/E Ratio**: 64.4 for 2022, projected to be 92.4 by 2029 [4] Conclusion - Tesla's recent performance indicates strong revenue growth, but challenges remain in terms of production capacity and market dynamics. The company's strategic focus on AI and robotics, particularly through the Optimus project and robotaxi services, suggests a long-term vision that may take time to materialize. The current market valuation appears to heavily factor in future AI potential, which could lead to volatility in stock performance as these initiatives progress.