Hello and welcome to this live stream where we're going to be going through the Tesla Q2 results that should be coming out in about seven minutes as uh I'm starting this live stream. So if you're starting and you want to see analysis of the data, Fast Forward by seven minutes and you should be about bang on Uh, when you see the data on the screen. uh, that's when it's going to be. So thank you very much for everyone who's joined.

Thank you for everyone who will join us later. Um, thank you to everyone from the Discord Community who is helping moderate I Really appreciate I Can see quite a few of you in the chat, so that's really nice if anyone wants to join the Discord Community where we chat about all things investing Personal Finance stocks Please feel free to go and check out the pinned comments in the live chat. but in this live stream we are gonna have two segments. Kind of three segments.

really. The first segment when the data comes out uh, which would be at four o'clock just after four o'clock I just have the markets close at EST just after nine o'clock UK which is where I'm at. Um, we are going to go through the data. We're going to quickly go and look at some of the most important things.

We're then going to go and read whatever it is that we, um, need to read in full detail afterwards to make sure we haven't missed anything. Then we will quickly go through I have the questions we're going to go and discuss the questions they're going to be asked. um in the uh on the earning score. Later, we're going to listen to the uni school.

Um, this is is is going to be slightly different to maybe some of the other live streams or the earnings gold that um that you might have watched before. I do the analysis and I try to share my thoughts and opinions and I'm just a random guy on YouTube So please take it for what it is. this is just my live. I probably make mistakes, probably don't see something if you see something that I haven't seen.

please go and share it in the comments. If anyone's got any interesting Insight please go and put it down I'd really appreciate it. It'd be really interesting to have a conversation. Please appreciate that I have not seen these before I've not done any preparation work so I'm seeing for the first time as we're doing this live stream.

but then what we'll do is we'll listen to the call I'll probably not interrupt much at all except for maybe once or twice when there is some particular important context or a point that needs making. Um, then there'll be questions and we're going to have two sets of questions. We're gonna have the questions that come from investors where we already know what those questions are going to be. which is why After we've done the analysis of the data and reading through the deck and all that kind of stuff, we're then going to be talking about.

uh, ooh, somebody who wants to be a mod. Okay, let's put another person as a moderator. There we go There we go. John Boyle is now a moderator.

Check this out, All right. So um, we're going to go through the questions and we're going to listen to to the questions after the the earnings presentation, and then we're going to listen to the live analyst calls. Those tend to be a bit more, um, varied. Like sometimes they're really good, sometimes they're just absolute.

um, donkey poop. So hopefully, um, hopefully we're gonna get some good ones on there. Um, this quarter does a few interesting questions. Um, probably four really big things that people want to know.

One, what is happening, maybe five. Let me go through. like the big ones that we want to look at. four minutes till the earnings.

Um, one is what is the plan, What is the thinking with margins? And obviously we're going to see margins compressed I think Wall Street estimates of high 18. So whatever on margins are unrealistic. So the in my mind, the only realistic outcome is that they're gonna miss it I Don't know what that word really means Miss on the margins because I expect them to be considerably lower than what I think the street is estimating them. Uh, but but the real question is, what's the longer term prognosis like? How much of this and this is obviously going to be speculative from both the investor side and from Tesla answering it? But how much of this is down to the Macro to the market confidence? and that is definitely a huge thing.

We've seen this across: Industries When we see Um results come through from all the advertising companies like the metas, the Googles the whatever um. consumer confidence is affecting ad revenues in a big way. so we're gonna see. We're going to see this play out throughout the entire earnings.

But how much of this down downward pressure on margins where they're having to cut margins in order to sell the cars? How much of that is down to the Macro to all these kind of things and how much is that is then going to rebound versus? you know you have. You have to acknowledge the fact that scaling the business from producing a smaller number of cars to a much larger number of cars does mean that you can't just print the same sort of margins that you can when you're producing a much lower number of cars. So there is going to be a question about that. Um, and I know that there's a few questions on that.

Then we have a question on FSD timelines Etc I'm not gonna discuss that in great depth now, but um one of the top question from investors is has anyone approached Tesla to talk about Um FSD licensing? Then we have the question on Cyber trucks. Obviously they put a picture up saying that the Cyber truck started production Here is the first one. A bunch of people, a few random shots of, you know, a few of the skeleton bits so it's not fully exoskeleton like maybe what they initially wanted. There is an internal thing.

There's a few things that people kind of said hey, uh, you know the design is is missing some of the initial bits that Tesla said would be in there like for example, there's no pass-through from the back of the vehicle to the rear seats. You can, you know, use the full space if you want to. A few other things like that Anyway, what are the timelines on that? How is the Ram going? Is it going the sort of the Model 3 route where this is in the start. they're going to go and produce.

They're going to scale. They're going to produce 5000 a week, they're going to produce 10 000 a week and so on. Or is it going to go down the semi route and we're going to be still here in two years time, not really knowing if any cyber trucks are being made. Hopefully it's more like the former than the latter, but we don't really know yet.

That's the important thing. So so we're gonna have to go. and um, listen to what they say about that, there is a slight concern, a slight concern as an investor that the whole cyber truck production because they were talking about the first event and the first potential production starting at the end of this quarter. Q3 I have a slight concern that potentially this whole cyber truck production has been fast forwarded.

Fast Track is just a tiny bit to coincide with what Wall Street will consider to be a Miss on margins because margins will have to be compressed. I Don't really understand why everyone thinks that the margins will hardly drop from Q1 because Tesla cost prices a lot in March just before the start of the quarter I Think everyone's like forgotten about this. So in March globally the prices were cut massively and that means that the the margins and unless something magic happened and you know Tesla has long term just like any other manufacturer, long-term contracts on raw materials. Etc Just because some of the commodity prices have come down, doesn't mean the Tesla is suddenly out of, you know, just magically in a few months suddenly having their cost slash very, very quickly.

And obviously Tesla suffers from the same thing as everybody else with inflationary pressures on wages and everything else. so we'll have to see I Guess Oh, Damien's on here. Hello! Damien Um, if anyone hasn't subscribed to Damien talks money, you should go and do that. Do that.

Uh, great channel. So uh, it's about time let's have a look. let's have a look. Um, let me stick myself.

You probably don't want to see a big picture of me anyway because I'm I've I've been out all day in London um I've just come back to do this I was in London I was not going to do this live stream. um, the shareholder deck will appear over here so when it appears we'll open it. um and uh, we'll go through the data but I was out in London I was like I was not going to do this live stream because I just don't really cover individual stocks as much on the channel anymore I tend to talk about that kind of stuff a lot more within the community and share some of the analysis videos and things like that. Um, but I kind of thought.

hey so many people have asked uh to do this live stream of the Tesla earnings that I kind of I kind of can't not do it. So here we are. let's see where is the deck. It usually comes out within the first minute or two so we'll we'll know when it's here.

I'm just going to keep refreshing the page. So what are people saying in the chat just before this turns up? Um, uh, a lot of a lot of people are expecting a bit of a mess. A lot of people are expecting a bit of a mess on the margins. The thing is, it doesn't really matter in my opinion.

what the short term like? What the Q2 margin numbers are? What matters a lot more is how the vision of the board is going forward. What they say about the expectations on the margins going forward. and I know that there's people out there that sort of big Uber balls for Tesla Who will tell you that? hey, you know Tesla's corporate mission is to have to sell cars for free because they want to Electrify The World: The problem is Tesla is a for-profit business and it does have shareholders, to which it has an obligation to make you know as much money as they possibly can because that's kind of the purpose of a for-profit business in a way. Um, really that has shareholders who want that.

Um, so um, you can't You can't just go and become a charity overnight. So um, while it is a good objective to Electrify the world so far, um I I Don't think this kind of because there's this narrative though. when Tesla raises prices is because they have no choice because you know there's so much demand and the choice, but to increase prices. But when they reduce prices, it isn't anything to do with demand.

It's always because they are just such good people that they want to give people cheaper cars. Um, it's funny that the argument kind of switches completely depending on which which way the price goes because Tesla is known for oscillating prices up and down basically as the demand goes up and down so we still haven't got the deck. Where's the deck Two minutes already? It's my clock. Is my clock fast.

I Don't know. Come on. Um, for anyone who hasn't seen, uh, just a very, very quick vehicle. in the on the press release, we had 466 000 deliveries, 479 700 production.

Um, the number of lease uh, models from our last Model X dropped. They actually sold quite a few of these. Um, because, uh, because they had so many. so many in transit last quarter I think and there was a large number.

but um, they keep stacking cars because I Think as they're planning into new markets as the production increases, you will naturally have more and more cars in transit in various different countries. Imports on ships. whatever. Especially is that.

uh, wave delivery cycle stops but about to watch your latest video Toby In this game. Oh, there's other people in the chat. some people don't even know. There we go.

What's happening? Where? Where is the data? Come on. Tesla This is slow. This is slow. By the way.

if you're just joining, we're gonna go through the results. We're going to go and do analysis of the data. Uh best. I Can Uh, if anyone else wants to share their takes, Uh, please please do.

Um. and then we're gonna go all the way through to the earnings call. we're gonna do some general discussion and talk about questions, um, and other stuff in between, but we still haven't got the deck. Come on to the start of this live stream later.

whereas it's a big mess apparently, according to James Lacy it's nice. I I Want that? um Advanced Knowledge Uh Tesla What People people are basically sharing their predictions. Everyone a lot of people think that there's going to be a big mess. a big Miss I think on the margins is is Def not bigness and Mysteries whatever.

The Wall Street thinks it's one of those where I don't understand when people talk about misses and these things because the Miss is relative to a bunch of random analysts on Wall Street who just makes up whatever that comes into their head and so I never understand why people talk about something being a mess or something being you know a beat where it's not a like I compare a missile repeat versus you know what the company has previously said. What is a reasonable expectation? Not what some random analysts from who just changes their price. You've seen the analyst the moment Tesla stock went down to 100. All of these Wall Street analysts started reducing their Target price by like a hundred percent.

It was just all the way down. it was 400. Now it's 150. The moment the share price went back up, they all started doubling and tripling their Target price.

Oh, here we go. we've got it. Let's look at the data. let's look at the data and then we'll look at how bad how bad the stock price reacts.

Okay, we'll read everything in detail in a second. Wow, this is good. This is good 18.2 This is a lot better than I expected. Um, so 18.2 percent.

However, operating margin is down at 9.6 I'm guessing that some of the costs are not being absorbed in Capex on some of this new development that's happening across different factories in. Mexico So Um, so this is good I Don't know if this is technically a mess or a beat because I think people are expecting 18 points. Something higher? maybe. but this is, uh I I Was fully expecting to see a 16 point something over here.

So this is. this is, um, good numbers in terms of um, total Automotive revenues. Um, very strong for the quarter given the massive price Cuts 20 I Know deliveries are up I I am aware, but you know 20 21.3 energy generation roughly in line so that didn't grow as much. so some people probably no.

I I Kind of thought that maybe they're going to be building on the previous quarter and continuing expansion of there there isn't as much I know Tesla Been installing a lot of these internally so that's not going to translate into Revenue they've been um stock taking a bit. big hit, big hit I don't know, People are saying all kinds of weird stuff. I'm not sure I believe it. Um, Anyway, total revenues 24.9 which is a new record Uh, which is always good.

In a quarter, they just slash their prices. Massively gross profit. Um, yeah, 18.2 is is very decent. Given this to our two factories ramping and given the massive price cuts I think a lot of people are going to be surprised by that.

Uh, a lot of people are going to be surprised by that. All right. Operating Expenses: 2.1 income from approach two or three operating. Okay, what do we got? Um, uh, that's not.

that's not bad. I Don't know what the what the analyst expectations on earnings per share was, but you know we're sitting on 78 cents. um, on a Gap basis. Given that a lot of people are expecting this to be the sort of the bottom of this cycle for Tesla this is good.

Um, this is perfectly fine. Like I'm not seeing anything really particularly negative on it. Let's quickly go and look at the balance sheet and then we can go and look at the photos and I know you want to read all the stuff that they put out. We're gonna do that.

Just let me look at this stuff here first. Okay, um you can see Bitcoin is still there. They haven't sold their Bitcoin Are there any big movements? Not seeing anything at all? Everything very sturdy. What's what's happening over here? Um, an increase just in the in inventory over here.

So that's kind of. uh. what? we uh, we're expecting. Uh, because the delivery numbers continue being lower than production.

Um, well, we've got property plant and Equipment you can see. So yeah. so a lot being built. um and converting into a like cap expand and then going, you know, into a gradual, uh, degradation over a long period of time I look afterwards.

So um, so so that's why that's why this number is is going up quite a bit. Um, there's nothing really particularly noticeable or interesting here that you wouldn't expect. What's this? Debt had paid off another 400 million? Um, down to 872? Probably what? Two quarters out from getting rid of the debt altogether? Um, interesting. Um, everything was good.

I mean I don't I'm not looking at the stock price because I don't really care too much about aftermarket stock price, but but this seems pretty decent. Um, and people are spouting all kinds of weird guys. Let's not write random stuff that is not necessarily true and just you know whether you hate Tesla like Tesla Let's be respectful in the chat and not make stuff up and just actually share analysis, share what you actually think, Share some insight that I'm missing because I'm talking about this. Live.

Day Sales Outstanding. Um 12. This hasn't increased as much as some people thought. People are standing 70.

Um, what do we got on superchargers and all this kind of stuff? Where is it? Let's have a look over here. so we've already seen a production delivery numbers. This is all good. End of quarter vehicle Karen The 16 days to supply this is still pretty good.

Remember the main manufacturers have orders like not okay, not orders of magnitude, but significantly multiples of this number. Um, you know, many months worth of invent inventory sitting on digital a lot. So Tesla has increased as they have gone away from this wave delivery model and open building in Texas and stuff like that. This is not bad though this is going to normalizing.

It's something that is supposed to be recently. Two weeks, two in a bit weeks of cars that are, um, in transit that are on the way to customers that haven't quite been sold yet that are going into inventory so that people can buy cars immediately rather than have to wait. Um, from the point of order. So this is going to good Solar? Nobody cares.

Um, storage. Slight drop. but I mean this is still a very high number. Remember, they had a huge leap in Q1 this year.

Um, and Q1? Uh, surprised a few people. but but this is this is strong right? This is still a pretty decent number. This is gonna have ups and downs, but um pretty good on the storage. This is energy storage.

Tesla locations Uh. Mobile service Suite What about Supercharger stations? Um has is is going up consistently 33 up Supercharger connectors 33 up all looking good? Um here. Oh okay, this is interesting Berlin 375 000. I'm sure that let me just double check.

Let me just because. I Just see one of these and it looks like that. It looks it from memory. Yes, okay I thought this number was different.

I I I have a I have a problem where like I I'm one of those people that that memorizes too many things. Um, uh, we're not going to go to the depths of exactly how and why, but um, so this was 350 000. It is now 375 000. Um, However, before it said more than 350 000.

So so it was more than it is now, not more than um. So obviously California is not expanding. So they're kind of saying look, um, it's a hundred thousand, Five hundred fifty thousand and that's it. That's roughly what we make when everything is going well.

Shanghai does fluctuate for a whole series of reasons. You know they've had many months when, um, they get they produced 80, 85, 000 cars or whatever it was. So so they do have the capacity to be producing more. They upgraded the factory in August in July August last year.

Um, so that's definitely. uh, uh. you know a conservative estimate over here. Um, this model Y is greater than 250 000.

But this is interesting. Like, why why would you not put this, um as greater than whatever whatever they've been previously putting my take on this person name. This is just a random guess from seeing this for the first time is they've just applied for a permit in Germany I think a few days back to build phase two. Um, next to the existing.

so the the plot that they've got in Berlin Uh, in Brandenburg Um has space for four I think phases plus additional auxiliary buildings. Um, the sort of size that they've currently built and technically the permission likes Kind of talked about that potentially being a future plan. They don't But each time they want to build a new phase, a new building, a new production facility, they have to go and get a fresh wave of permits. And there's the same problems they've always had.

like water, is there enough water on the side? Bloody bloody, blah. But I wonder whether this is basically part of the cell? They're basically saying look, we've now capped. um, we're now Captain Production We're not going to be able to scale. We're not going to be able to build more than this number of cars in Berlin It is going to be our smallest Factory Because Texas is going to Ram and Cyberger is going to start production.

Hey! Germany Do you actually want us to invest in your country? Do you want us to hire more people? Do you want to be? Um, you know I Kind of feel that it's It's a very, very small movement from greater than 350 375. but I think it's quite an important one. Anyway, now that we've looked at what I think is the importance of if anyone's seeing something that I'm not seeing looks like Tesla's kind of flat and stock market agrees with me in that it's all kind of bang on. It's all kind of good.

Uh, pretty pretty. Uh, reasonable. I Have equipped myself I'm not angry I'm very happy I'm I've got I've got some tea um I've got a ton of water I have a special uh mug with a geeky joke which says I invest in American repository receipts Sumi Um, okay, profitability. Let's read everything they actually said: 9.6 operating margin 2.4 billion Gap operating income 2.7 billion Gap net income 3.1 billion non-gaap net income cash I'll bring cash flow 3.1 I mean these are all very consistent with what we've been seeing before.

like but just for the price cuts that that happened in March This is good I Personally think this is this is like a significantly above my expectations. Um so I'm a very happy shareholder. um Tesla is is a very big the biggest position in my portfolio is so just as a disclaimer: um although I do often voice my disappointment just as well I'm just sharing what I'm actually thinking okay Cyber truck Factory Shooting on track, producing Rc4 builds RC builds release candidate builds. Okay, so so they're doing the sort of the pre-pre-production At the moment, Um, Model Y became the best selling vehicle uh, globally.

In Q1, Q2 2023 was a record quarter on many levels with their best ever production deliveries and revenue approaching 25 billion dollars in a single quarter. We are excited that we were able to achieve such results given the macroeconomic environment we're currently in. so there are obviously preempting the questions about pricing already in the very first paragraph of this presentation. Nice.

Let me just zoom in because you probably can't see this very well. There we go. Our operating margin remained healthy at approximately 10 percent, even with price reductions in Q1 and early Q2 sorry, I'm going to take a swig Otherwise, I'm going to lose my voice and that's going to be fun for anyone. So our very major remained healthy at approximately 10 even with price reductions in Q1 and early.

Q2 Um, yeah, this reflect that's what I was referring to before we got this data. This reflects our ongoing cost reduction efforts, the continued production round success in Berlin in Texas and the strong performance of our energy and services and other businesses, our commitment to being in the Forefront of AI development into the new chapter with the start of production of Dojo training computers I Think investors are going to be very excited about this. Um, this is sort of The next step in training the AI That's going into FSD and Dojo is the proprietary computer system that Tesla's been developing for some time now. We are hopeful that RMS Neural Net Training needs will be satisfied using our in-house design Dojo hardware and I should just read it because I'm saying stuff that they write in their following sentence: the better than Neural Net training capacity, the greater the opportunity for our autopilot team to iterate on new Solutions Um, great, uh, uh, what? What are people saying? Yeah, Finally, those are in production.

Uh yeah. In conclusion, we are focusing on cost reduction. New product development will enable future growth investment in R D better vehicle financing options, continuous products Improvement and generation of free cash flow. The challenges of these uncertain times are not over, but we believe we have the right ingredients for the long-term success of the business through a variety of high potential projects.

So I'm wondering how much they're going to say about these high potential projects because I know everyone was very excited when there was that robot where the guy was waving his hand on stage or whatever. I wasn't very excited. Um, but they've um, what's this fly doing? Go away fly. Um, but but it is.

It is going to be interesting to see because they've obviously stepped back from talking about that robot like years before. it potentially might be feasible and other other projects. um, other stuff that we haven't even heard about I'm What are these other models remember in the presentation that they did about Um, transforming the whole world to Green Energy? There was these other models. Under Wraps You know are we going to ever hear about what these might be and when they might be? Um, what's happening with the Um compact car? All of this kind of stuff? All right, let's look at the next slide.

We've already gone through this numbers. Really quite good at: Justin Bieber That margin? Look at that. 18.7 operating margin. Nine point, Six percent.

Obviously a big drop as expected, but this is healthy. This: These numbers are still significantly better than traditional auto manufacturers and this is after Tesla It's just completely wiped the floor with all the other auto manufacturers by dropping prices so far that nobody can possibly compete for. Went and dropped their price by ten thousand dollars on cars that they're losing like I can't remember the minus huge margin on those EVS Is this is incredible because although Tesla says that this is not really their intent, all the other manufacturers are looking as going, we can't compete. There's no point in this ramping electric car production.

There's no point in us making more of these cars because we're just losing a ton of money on every single electric car that we sell while Tesla is making a 10 9.6 operating margin. So in a way this is sort of perversely delaying the entry of everybody else because in order to enter, you have to start losing a colossal amount of money until you figure out your own processes to the same point. And this is a pretty powerful kind of position to be in because you know you can't go and enter like you can't go and play in this space. Um, if you're a big existing auto manufacturer because your shareholders are going to murder you.

So um, yeah, this is cool. This is a this is a quite interesting position to be in. No cash provided by operating activities. Three billion dollars Free cash flow.

One billion dollars. Um, and we've gone through this. Have we? Um, it's interesting by the way. They then print separately.

They printed the back here. Let's quickly have a look. Um, Automotive Sales 20.4 billion regulatory credits, Just 282. Um, so that that's that's low, right? That's a very low number.

I'm not sure if it's the lowest they've like had in years or it's a very low number. This is good because this means that the rest of the business, the actual core, the actual real business has been uh, making quite decent money. Uh, more money. So so that makes the results even better.

It's great that leasing kind of in line. slightly slightly low. Obviously, interest rates are going to be affecting leasing because that is a lot more expensive in comparison. Um, um, energy generation in line, services, and other slowly climbing.

Obviously the more cars you have on the road, the more there's going to be additional revenue streams for the business of servicing, fixing, etc. Those cars. Um, so um, why is there a fly? Go sleep. Go.

just go away. Um, go somewhere right? Um, it's a big office. let's go to the other end of the office. All right, let's keep reading.

Let's keep reading. Why is this called pinned comment Pin common? it's you have to sign up to Patreon uh in order to access the Discord All right. Financial Summary: Revenue Total revenue grew 47 year on year I Mean this is good In a quarter where they completely destroy their margins where they went and sacrificed uh, their prices by dropping in significantly. they still grew 47 year-on-year Sort of very, very close to that 50 long term.

Target That's impressive obviously. on the one hand. On the other hand, you have to remember that in Q2 last year. So this is a cheat, right? So they they've posted this.

It is impressive. but I remember being Q2 Uh, last year there was the the whole um, hoo-ha with um, production issues Shanghai Etc I'm not gonna go into depth of that, but um, yeah, it's a good number it is comparing to a week quarter last year. But anyway, um, let me scrub. you can see over here.

um see the search. Automated revenues over here uh Is considerably lower than the Q3 and Q4 So so yeah. Anyway, what are they saying? Plus growth of vehicle deliveries plus growth in other parts of the business minus reduced average setting price year and year. Um, negative minus negative effects Impacts of 0.6 billion uh dollars? Okay, profitability.

Our operating income decreased slightly year on year to 2.4 billion dollars in Q2 resulting in a 9.6 operating margin. Year and year operating income was primarily impacted by the following items: Reduced Um ASP due to maximum pricing Minus Cost of production around for 46.80 sales and other race charges I This is interesting because obviously the 4680 cells were bigged up in a really big way. They had a huge battery Day Presentation and a huge second I Think was there a second battery Day Presentation: Whatever it was, there was a lot of hoo-ha by these batteries and I think long term they're probably going to play out I Think the upsides and benefits of these battery cells and the structural battery packs that they go into have and quiet come through to fruition in the sort of way that many, um, like bullish Tesla Investors um, hoped for. So I Wonder if there's going to be some questions on that and what Tesla actually say about that increase in operating expenses driven by cyber truck Ai and other large projects.

So yeah, so that's what we're referring to earlier. Some of the costs, um of the business have gone up. Um, are they in here? Let's go and look down down in the detail piano at the bottom. where is it? So here we go so you can see Um in the operating expenses.

I'm going to go. R D has gone up quite substantially 943, so that's quite. That's quite a big job. I'm guessing Dojo Development of Cyber Truck, development of, um, whatever.

uh, new models and stuff like that. Um, general costs? Uh, relatively consistent. Obviously is business scaling and they're hiring more people into the factory. Stuff like that.

so not a not a big job. These are still incredibly modest costs for the size of the business that um Tesla running by the way. Um, no. the but guys, the earnings score is not already happening.

I've got it open over here. Um, we're going to be. We're going to be listening. Um, to the ending score.

It's starting. This is UK time over here. Uh, in case that confuses you, it's like starting in 65 minutes. We're going to listen to the Earnings call on this channel.

don't you worry? Uh, it's going to be here. We're going to be listening to the ending score on this channel and as of when it comes, let me quit the Q1 um numbers over here. Um, and we're going to be going through everything. Um It's all under control.

Uh, chill out. Um, let's go through the rest of this uh data. Okay, okay, um. increasing my branding cholesterol gun through that negative effects Impact plus from the profitability of growth in vehicle deliveries.

Well, yeah, no. some more cars. You make more money despite margin headwood from underutilization of new factories plus lower cost per vehicle which includes lower or material costs and Ira credit. um plus gross profit uh, growth from energy business as well.

So this is another interesting remember how we were talking about the Berlin changing that number and having the greater Than look over here despite margin headwind from under utilization underutilization of new factories. It's a new wording. this definitely wasn't here before. It's quite interesting to kind of say hey, um, um Germany you need to give us permits so we can make greater use of that plot that we uh, built the first phase of the factory on.

um, that's my take reading between the lines and on this some of these words anyway. other income uh below of other income below operating income line was positively impacted by FX movements on certain inter-company balances. Hello everybody, by the way, sorry my cover photo makes it look like I've been hacked on those crypto scams I do apologize I I Made the thumbnail very very quickly I found my the first face so I could find and just stuck it on there. Um, Cash question Cash Cash equivalents resonance increase sequentially by 0.7 billion to 23.1 billion dollars in Q2 Driven mainly by free cash flow of one billion dollars partially offset by other financing activities including debt repayments.

So that is about two quarters from being completely wiped out. Or maybe one quarter if they decide uh to go and do it. Um, right. we've gone through this sheet.

everything good. 16 days worth of supply. Your mic sounds worse than usual. it does because this is a live stream you see when I record a video.

um I make the video and I have the capability of after I record the video to go and put all kinds of overlays to kill the echo to kill some of the Reverb And when I'm talking, when I'm recording a video, I have a teleprompter like this thing here. uh, where the camera is in front of it. there is a teleprompter and I actually spend hours preparing the video. So I write the script Etc and then I can speak and I can read the stuff and the microphone hangs right up here just out of sight.

You can't quite see it, but it's up here. So when I'm talking, I'm talking to you and the mic picks it up and it's perfect. When I'm doing a live video and I'm looking at the big screen over here and I'm doing analysis. The sound goes here.

the microphone's up there. Figure it out, It doesn't matter, it's fine. Um, this is what you get with the live video. All right.

Um, so in Q2 we produce a record number of vehicles. Thanks to ongoing Ram super new factories as well as strong performance of Shanghai and Fremont, we remain committed to smoothing deliveries through the quarter by reducing the percentage of vehicles delivered in the third month. Um, so this is something that's been happening about a year now. Vehicles and Transit test drive and display Vehicles account for a substantive majority of our total days of Supply So they're basically saying, hey, the days of Supply is a natural increase is what happens when you begin setting more cars and more places to more customers and they're basically just kind of calming some I guess like preemptively killing the questions that might come up on that front.

All right. U.S California Nevada and Texas a data Factory Texas In addition to the continued success the Model Y ramp, we are also working on equipment installation for the Cyber truck production, which remains on track for initial deliveries this year. Now, this is at odds with what they posted a few days ago, right? So if you go and post a whole giant team of people around the first cyber truck saying hey, this is the first actual production version the production is now on on track, you kind of like giving it the report. The QT report is pretty good.

You even wonder what was the point of doing that. Nothing in this report is saying hey, we're going to start selling these like in one month or in two months, we're going to have a delivery event in September These are all still exactly the same kind of wording, where you kind of feel like maybe if these are just pre-production variants and stuff like that, maybe you could have waited until you're a bit closer to actual production to go and post that photo. But hey, um, that's just me. We have made notable progress on yield Improvement on our 4680 cell production lines.

We continue building capacity for Cafe production and lithium refining in the US if you haven't seen it, Tesla Have started building a Lithium Um, what's a refining facility in Corpus Christi in Texas Um, so basically lithium turns up via the sea and goes into the refinery and gets converted into manufactured grade like very pure lithium gets transported to Texas and California Um, so that should improve their ability to well, both reduce costs and have better Supply chains when everybody else might be struggling as everyone is trying to ramp the same production of the same thing at the same time. China Shanghai Since our Shanghai Factory has been successfully running near full capacity for several months, we do not expect a meaningful increase in weekday production run rate. Gigafactory generates our main export Hub Uh, almost exactly the same or exactly the same as what they wrote last year last quarter and I Don't know if because obviously Elon's flown to China and met with the senior guys over there. at one point there were very heavy rumors they're going to expand Shanghai they're going to build a new um Factory There were rumors that they're buying a pot of land that is between the port from which they ship the cars and the existing Factory There's a whole load of stuff and none of them materialized.

and the question mark is whether Tesla is just trying to diversify between different geographies a bit more trying to understand. You know, are there any issues risks Etc in China that maybe would make expanding too aggressively there not advantageous I Don't know. this wording here is very cagey. uh and I don't know if they based in China to kind of give them some kind of incentives to expand I don't know.

It's basically saying look, China's doing what it's doing Uh, it's fine Europe Berlin and Brandenburg A factory in Germany produced standard Range Model Y vehicles in Qg for the first time. Um, building off momentum. So this is standard ages and like not the other versions the longer range. Etc model uh, very performance models they were producing before building off momentum from a success in Q1, Model Y was the best-selling vehicle of any kind in Europe year to date based on the latest available data as of May.

Yeah! so I Live in the UK and you go to a car park somewhere? Um, you know a big train station, car park or super like Teslas are becoming, um, a lot more, uh, visible than they were a year or two years ago. People are liking the product, people are liking the products and people are buying them for sure. Um, yeah. I Completely agree, guys.

it. whether you like or dislike a product, uh, uh. there's a lot of people who like things and a lot of people dislike things. That's fine.

Not everybody has to like zippers. Let's look at the charts. Okay, what do we got? California Model S Model X 100 So all these numbers are except for the Berlin 375. So basically saying Pilots production of the semi cyber truck says tooling.

although they're kind of saying that it's in production now I Guess this is maybe as of the end of the quarter. So before they started technical production in Q3 um, various uh, different locations for the next to Gen platform the compact. I'm guessing they're going to be very Coy about it. We're not going to get any kind of details approached.

TBD It's never coming. All the people putting down the 50 000 or whatever it is I don't know how big is that deposit? Um I Don't think the roast is coming at any point soon. They have too many things that they're focusing on other than the roaster market share of Tesla vehicles. Uh, by region, look at that.

U.S Canada Up to four percent? Almost. It's not bad for market share of the total vehicle production in the US and Canada four percent already. I Mean like that is not bad and you can see look Europe ticking up after having a slightly slower rate of growth in Q1 China Growing everywhere is growing. You know, two to three percent.

These are pretty strong numbers. Still a long way to go. but what is this? Cumulative Miles Driven with FSD Beta? So obviously the beta has gone into a mass release. Um, and Elon said that by the end of the year, they're going to be doing, um, an actual public release now I'm taking that with a pinch of salt because FSD is going to be ready this year as a line that we've heard for the last eight years already.

But hey, uh, it is definitely getting a lot closer. Um, every year. Uh, what's the other chart while we're on here. Cumulative Miles driven? Um, whatever.

DBS No, that's the other one. Internal projection of Dojo Compute Super. So I'm guessing they're going to be talking about this a lot because we saw the stuff about Dojo earlier in the presentation. Internal projection of Dojo compute power.

So as they're scaling as they're building, this is in units of a100. GPU So A100 is a very expensive Nvidia product. You know we're talking tens of thousands of dollars. Um, sort of like there's not your regular GPU Sticking your computer to play a game with.

But by saying that building this internal supercomputer which is going to have an incredibly vast capacity equal to insane amount of compute power. They're saying starter digital production is this month in July They're saying by sometime so is this meant to be January or after January I'm not sure top five in the entire world projected and they are targeting 100 eggs of flops. They already mentioned this number previously in October 2024. So in about a year and a bit of time, um, this is a lot.

What's exit is it? 10 to the Pi is a 10 to the power of 10. Well I don't know. Whatever it is, it's it's insane. It's it's insurmountable.

Uh, to normal humans like me about a compute? um I I I I did some Computing But um yeah, these are crazy numbers. I Think the the scale on the left over here the 400 000. That's something that people can relate to a little bit better. Um, four main technology pillars for artificial intelligence software.

and Hardware four main technology pillars are needed to solve vehicle autonomy at scale. extremely large real world data set, Neural net training, vehicle hardware, and vehicle software. We're developing each of these pillars in-house This month we're taking a step towards faster and cheaper neural net training with the starter production of a dojo training computer. Um, I'm guessing this is going to become a big discussion topic for Elon on the call Um I can see it already vehicle another software for customers getting model Three year old White for the first time, we launched the get to know your Tesla experience where he's gonna adjust their seats, mirror, steering wheel, set up the phone key, and learn about topics such as gender braking to help customers discover ongoing improvements and software updates.

We now highlight new features directly in the UI encourage users to try features that may have missed and added the ability to search control. So the UI is getting even better even though it is already light years ahead of pretty much everybody else a battery powertraining manufacturing. We are now testing cyberger vehicles around the world for the for the final certification and validation. This might be the most unique vehicle product in decades.

Um yeah, it's very Marmite I Know there's a lot of people who love it I'm one of those people I have an order I mean I I drive a 4x4 at the moment. Um, sue me. Uh, so like this, it is aging a little bit I'm guessing by the time there's a right hand drive, it doesn't look like it's symmetrical so it's not going to be. uh, probably coming for a few years because I live in the UK um um but yeah I love it I I appreciate my a lot of people hate it.

my wife hates it. Um so I I it's gonna be your mama's kind of product. Um, some people, um, and it doesn't really matter because some people, as long as some people love it and enough people love it. Um, you're gonna sell some.

uh, that's how it works. It doesn't. If you try to appeal to everybody, you often don't appeal to anybody enough. Um, this is the problem with product.

Some people who try to say hey, this thing needs to be liked by everything by everybody make something that isn't loved by anyone. But anyway, as far as we know, Cyber Truck will be the first sub 19-foot truck fitting into a garage that is both four doors and a six foot plus bed. Both technologically and architecturally, the vehicle will break a lot of boundaries very much in line with how we think about vehicle engineering manufacturing, and it's kind of interesting. I'm not gonna be able to get the photos in front of you right now, maybe later, but um, but um, in the production version of the Cyber truck, what they've done is they've actually shortened the front end.

Let me just see if I can dig it up over here a Cyber Truck comparison production model because it'll be easier for me to explain if I can find an image of somebody showing showing a production versus the Uh currency. Anyway, anyway, if somebody's got a good photo, um, hit me up. uh, comparing the the brand new Cyber truck that they just started producing. Now to what the original uh was.

Yeah, so somebody's got that. Please drop me a link in the Discord or wherever. But anyway, the interesting thing um about and subtractors is they've shortened the front end a lot. so the front bumper and the all the space in front of the driver has been shortened massively.

The front wheel is basically pretty much at the front of the car and they've actually kept the total length roughly the same it looks like from the dimensions. So they've actually lengthened the back end of the car because a lot of people are saying hey, this truck won't appeal to people who work on farms, people who work whatever in construction, people who drive around and Carry long planks of wood and whatever. Um, and it looks like Tesla Basically just re- moved around some of the some of the dimensions and moved some of it further to the back to increase the capacity for pain loads at the back. However, there is no volt.

There's no pass-through from the back of the vehicle to the rear seats, so there's no way to carry even more stuff. There's no way to drop it or you know, a central. Some of the trucks that you can buy like regular, uh, four Chevy whatever trucks have a cut out so I don't know if you're carrying whatever skis Etc very long planks of wood or whatever it is that you're carrying you can stick them through that. Um, but anyway.

uh uh. Hopefully we'll get a bit more of an update with a bit more detail on the call. I mean I Can't see how they won't do it. Um.

Energy Storage Energy storage deployments increased by 222 percent year on year. in Q2 Uh to 3.7 gigawatt hours. Uh, another strong quarter due to ongoing ramp on my first dedicated mega pack. Factory in Lathrop California the ramp of this 40 gigawatt hour Mega Factory The first of many has been successful with still more room to reach full capacity.

While energy uh, storage deployment rate can be volatile due to project project timing, production rate further sequentially in Q2 So energy slowly ticking along doing its thing and they expect to produce a shitload of factories. Uh, because the demand for storage is gonna be insane in the world because as people are switching to Green energy sources like wind like solar. um, that stuff has to be stored somewhere now. Sure, nuclear is going to be a big part of the equation, but a not all countries have nuclear.

B Not all countries have the sort of money and the resources and the Uh technological capability for nuclear. C And not everyone wants to run 100 on nuclear. There's a lot of reasons Um and and most most other big green energy sources do not have consistent output levels. So Um, Energy Storage is going to become A bigger and bigger deal.

Solar I Think a lot of energy storage is probably also going to be. It's obviously there's the mega pack storage for, you know. Mass Uh, business use Etc There's going to be um, an increase in households who do the same thing on a lower scale with Tesla with other um, uh things. So um Tesla is probably going to begin talking more about this in the future I Don't expect any updates on the energy side of the business.

really on the only School other maybe Zach quickly covering it when he's going through the numbers. Solar Solar deployments remained roughly flat sequentially at 66. Mega allows Nobody cares. Literally nobody like this is a dead business I Don't know why they're still printing these numbers.

It's just declining year and year, predominantly due to a high interest rate environment is causing a solo posting. It's just so irrelevant and it's progressively becoming more irrelevant. I Know that they have to pretend that it's still relevant because Tesla bought SolarCity blah blah blah Um, come on. like just give give up already.

Nobody Cares services and other businesses. The second quarter of 2023 has been the quarter of supercharging A significant number of companies including Ford GM Nissan Pole Star Rivian Volvo and Electrify America have announced adoption of North American Charging Standard, a charging stand developed by Tesla over a decade ago for the North American Products. Yet today Nissan announced that they're doing the same and basically everyone's joining the party. Uh, have they got like yeah of all those yeah, everyone's basically doing it.

Um, if if you haven't done it already, you're going to do it anyway. Uh, I I Hope I Really wish we had the standard in Europe but we we're stuck with the giant plugs. It looks like, um, because of a combination of the design of this not really being compatible with the energy uh, grid. Anyway, further or opening Uh Charging Network and network of 2024 will enable both a faster Market conversion from combustion vehicles to EVS as well as faster growth of a charging Network through your large addressable.

Fleet One thing that Tesla is really going to have to address in all this I think is the concern that people are going to have. So obviously at the moment all the other manufacturers are manufacturing approximately all point no cars um in the EV space Tesla is so far ahead everyone was just gonna pretending to play along. Um, the question really is going to become how fast will they have to scale the ramping of the supercharger network if the other people actually start producing cars at any kind of scale? or are they just gonna die and never get there? I Don't know, a lot of them probably will, but we'll see. all right guys.

the earnings score is going to start in 45 minutes. Um, so if you're just joining, we're going through the numbers. Are we going through some of the photos from the analysis? what's this chart over here and then as soon as the end of this course starts, we're going to jump right on it. and we're going to listen to it.

And if anyone has any, um, thoughts, what? Because we're going to be talking just more generally about Tesla and uh, some of the questions and stuff in a minute after we're going through the pack, please put them in the comments if I don't see it. Um, I apologize. but I'll do my best. If anyone wants to repeat or highlight something that I should be paying attention to, please tag me uh for uh so that I Definitely see it All right.

Energy storage deployments. You can see the number. you know it's going to be ups and downs. It's going to be continuously increasing in a straight line, but very solid numbers, services, and other gross margins.

And this is interesting because they're now. They've introduced this charge which I haven't seen before, which basically saying look, the stuff on the servicing side is actually now beginning to turn a profit. Uh, so it's additive to the business rather than the cost of the business. This is pretty good.

All right, let me just zoom out. What does this say? Outlook Outlook Okay, volume. We are planning to go to production as quickly as possible in alignment with a 50 Kagger. Target Uh, we began guiding in early 2021.

in some years we may grow faster and in some degree slower depending on the number of factors. For 2023, we expect to remain ahead of the long term 50 Kaga with around 1.8 million vehicles for the year. shortly. in the first year that did so well and the second year, they did well as well.

After announcing their target that they didn't have to do a huge amount until 2025 2026, which is where the pressure on this target is gonna first really come because at the moment, the Mexico Factory that everyone got extremely excited about is now or already been announced that it's only going to come online at some point in 2025.. Um, you know, So so we're gonna see how long that takes. Um, no new other factories have been announced. They've applied for the bill in phase two, but they need a lot more than just those in order to hit the 50 cumulative Target in 2026 And in 2027 And building factories takes time.

Paperwork takes time. Uh, all kinds of things take time. So so hopefully we're going to hear more announcements because, um, obviously we've got a Mexico announcement. But we've not had very many Factory announcements since they announced Shanghai and Berlin quite a long time ago.

Now, Three years ago. Now, Three years ago. More than that, whatever, it was cash, we have ample liquidity to find a product roadmap, long-term capacity expansion plans, and other expenses. Furthermore, we will manage the business such that we maintain a strong balance sheet during this uncertain period, which is standard.

Mumbai Jumbo in here. Um, who's a miserable man Am I a miserable man? I Don't know. While we continue to execute on Innovations to reduce the cost of manufacturing operations over time, we expect our Hardware related profits to be accompanied by acceleration of AI software and free-based profits. All very standard wording here.

Cyber Truck remains on track to begin initial production later this year, later this year. Uh, later this year, a few days a week or whatever. After Tesla have posted a photo saying we've started production, It's just it just doesn't quite tally up which is not not ideal. But um, I'm sure they'll address this I'm sure they will.

In addition, we continue to make progress on our next Generation platform. Um, uh. Cyber Truck testing. Oh, look, a photo of Cyber Truck testing somewhere in the water.

the driving. this looks like one of those La whatever they're called things. Um, built to do real work. Uh, if real work is splashing people with mud, smashing photographers doing mud is apparently real work according to this.

Um, okay, I mean it looks looks kind of nice. Is this going to open? green or red tomorrow? I Don't know and I don't care. It doesn't matter. It doesn't matter what it does tomorrow morning.

Um, after these results, If you're an investor, it really like I genuinely don't care. Um I So so there we go. Cyber Truck Production Line and Gigafactory Texas Um, okay. the production line looks looks out of there.

So obviously when they produce the car, they there's a robot that wraps it in a little thing so that you can't see exactly what's under the wrap and then it moves it along. Uh, I mean come on, you've already shown it enough times already. You can you can do this without the wrap? Uh, come on now. Cyber Truck Production Line Gear Factory Texas Building RC Units Yeah, so you can see over here professionally.

Um, so these are the pre-production units and you can see that in the back of the car. Over here here there's there's these two little holes which I think are for wiring and harnesses and stuff like that. and this is the back of the car. So the seat, the rear seats are in front of this thing.

Um, and there is nothing. There is no holes at all. through this, it doesn't look like the rear structural capability for the rear window to go down and I've seen the same on the previous ones. Oh what did I just do? Let's look at the photo again.

and the other thing that I noticed is if you look at the various cutouts and the shapes, even the shapes of these um, bits and the sides you can see like the position of some of the fixings and stuff is different so it's not symmetrical. it's not symmetrical. Which means that for us losers in the UK and Australia and other places which drive right hand drive, this probably means that the Cyber truck is not coming to us for years because to switch this to Ryan Drive they have to have a whole different Um cast at the front end and I'm guessing to start off with while demand is millions of units, there's absolutely no point in switching and producing two different versions of this. so that's a bit of disappointing.

But but there we go. No cyber truck for us for a little while. Okay, this is the photo that I shared on Twitter that we've already seen. Everyone's doing the secret sign.

There's the secret sign over here. This This means please come and save us. We've been locked in here for five weeks already with no Freedom Water You can see they're all doing it and look, this guy is doing it. This guy's doing it.

It's a secret. It's a secret emergency sign. Maybe we should go and save them. Look, this guy's doing it.

If anyone knows what that means. Is it number one? Are they pointing to the number one? Is this pointing to? This is the number one? I Don't know. Um, okay. what are these charts? They're just basically showing you some charts over here.

Um, that's in the that's the LA River You're welcome. Yeah I thought it was I thought it was a lay. it looked like a lake. um.

vehicle deliveries going up, operating cash flow and free cash flow. Obviously down a little bit with the price Cuts but very still very strong. Um, oh, it's a cyber shop profile sign for the establishment profile. Is that what it is? Well, I guess some of them are okay.

so everyone's doing a pointy thing. but but surely if you're doing a profile, you just do the two things like this because a lot of them doing this and this seems a very weird way to do a cyber truck profile. Or or is it the fact that the thumb is shorter? Is the thumb shorter than the index finger? and that's kind of like the index finger is the back of the current thumb is the front? Is that what it is? Maybe I don't know I Guess so. Um, okay.

net income and adjusted ebitda? Um, very very strong I'm given the price Cuts Vehicle deliveries up uh operating cash flow and free cash flow strong and despite um, the drops and prices, all the numbers good. What's this Year and year? Revenue Growth it's come down. Um, it goes up and down based on um, circumstances. We've got Financial issues at the moment Tesla versus Auto industry versus the S P 500.

They're kind of ramming home the point that, although things are tough, they're still doing pretty well. Um, operating margin? Um, what are they comparing to to Auto industry S P 500 Obviously, we haven't got the Q2 numbers for these other charts. and on Tesla charts, they're saying, look, the margin is going down the S P 500 which includes you know, a lot of services, software kind of companies, a lot of tech companies. um, the same look.

We're doing pretty well as a manufacturing business, even compared to the average when you compare to cars. We're still well ahead. Um, yeah. um.

pretty strong set of numbers. All right. Uh, the Illuminati sign. Someone to say it's a gang sign.

They're in a cult now. Maybe. Uh, uh. All right.

Okay So we've gone through all the numbers. Is there anything on the cash flow statement that? uh, because we're not looked at commercial statement? Um, what do we got? Nothing Re wait, where is it here? here? It is. okay. um.

operating activities three billion delivered. We've got nothing normal, a lower, a lower than a negative number. over here. in terms of bringing assets, there's nothing I'm not seeing anything.

What's this? Purchases of Investments Okay, so we're gonna have to wait for the 10 Q for that one. but obviously you know a reasonably like I'm guessing they're buying bonds. Um, with the cash that's sitting in the bank. Uh, because of the interest rates and that's probably why this number is so high over here.

but see some maturity's investment. Okay, so the reinvest. Okay, so it's not. Actually, they just reinvested a bunch of into bonds.

Okay, uh, that's what it looks like over here. Um, cash and cash equivalence restricted. Yeah, There's nothing nothing really interesting or unusual in there that I can see if I miss something please. Uh, please tell me.

All right, let's quickly go and look at the questions because this is going to become um, a, uh, this is going to be set this time for the discussion. Hopefully we're gonna get some actual answers the last couple of times. I Kind of feel, uh, that there's a legal person or somebody sitting in the corner of the room where they want to answer something and the legal person goes, don't say that and and Elon wants to and sometimes Elon just kind of does it anyway. But you can tell that there's been a bit more restraint.

uh, uh, exercised. Anyway, the most popular question. And and by the way, the earnings score starts in 35 minutes. Uh, we're going to listen to it.

You can listen to it dir