Ripping chips out of washing machines: Shortage gets extreme
Tesla had a huge quarter, significantly beating analyst estimates with profit of $3.32 billion on $18.7 billion in revenue (up 81% year-over-year). And while many had hoped Musk would give some hints as to what’s next with Twitter, he instead outlined what’s next for Tesla. Here are a few key takeaways from Tesla’s earnings call.
Tesla absolutely crushed Wall Street expectations.
According to Barron’s, Wall Street anticipated earnings of $2.20 to $2.30 a share and around $18 billion in revenue, estimates that Tesla beat handily. The company also made around $1 billion more in operating profit than analysts expected. Tesla’s share price jumped around 5% in after-hours trading, up to $1,017 per share from closing at around $976.
Musk wants more people to get into the lithium business.
The supply chain is squeezing Tesla tight. One major supply chain challenge the company is facing is lithium, though not because of there’s a shortage of it. Musk said the element is “almost everywhere,” but the steps to refine it are expensive and arduous. Musk sees this as an issue for the entire EV industry. His solution? More people need to get into the lithium business, he said.
“Can some more people please get into the lithium business?” Musk said. “Do you like minting money? Well the lithium business is for you.”
The supply chain issues lead to one boon for the company: Part of the reason it had a high profit margin is that due to the higher average selling price of its vehicles (the company raised the prices of its entire fleet by 5% to 10% this past quarter). But because of this, he doesn’t anticipate vehicle prices will rise again soon.
“Our prices of vehicles ordered now are really anticipating supplier and logistics cost growth that … we believe will happen over the next six to 12 months,” Musk said. “That’s that’s why we have the price increases today, because a car order today will arrive in some cases a year from now.”
The company will host a product event for its long-awaited RoboTaxi next year.
Musk has been talking about a Tesla RoboTaxi, essentially a driverless Uber, for years. Now it looks like the company is closer to actually getting them on the road. Musk didn’t divulge too many details, but said the company is planning to host a product event next year, and is aiming for volume production in 2024.
He also anticipates that they will be really, really cheap.
“Looking at some of our projections, it would appear that a RoboTaxi ride will cost less than a … subsidized bus ticket or a subsidized subway ticket,” Musk said.
We’ll believe it when we see it.
Musk predicts Tesla Bots will be a bigger business than cars.
Musk is a big believer in Tesla’s company’s Optimus project, which aims to create full-fledged humanoid robots called Tesla Bots. Tesla Bots, first announced last August, will be 5’8″ tall, weighs 125 pounds, and can move at about five miles per hour. It’ll run an Autopilot system similar to that of Tesla cars. Musk said in the earnings call that the program’s importance “will become apparent in the coming years.”
“I was surprised that people did not realize the magnitude of the Optimus robot program,” Musk said. “Those who are insightful or looking listen carefully will understand that Optimus ultimately will be worth more than the car business.”
Well, OK! We look forward to seeing how Musk’s many projects turn out. In the meantime…lithium mining, anyone?