Tesla (TSLA) 21 Oct 212021 Q3 Earnings call transcript

Good afternoon, everyone and welcome to Tesla 's Third Quarter 2021 Q&A webcast. My name is Martin Viecha, Senior Director of Investor Relations and I'm joined today by our CFO, Zachary Kirkhorn, and our Senior VP, Drew Baglino, as well as other executives.

Our Q3 results were announced at about 3 p.m. Central Time in the Update deck we published at the same link as this webcast.

During this call, we will discuss our business outlook and make forward-looking statements. on and based today. as are comments our expectations predictions of These our with events materially uncertainties, risks in differ results including recent to mentioned Actual could of due or SEC. the a number those most filings and

please some During one yourself opening Instructions] before remarks. question today's the into [Operator to we follow-up. Zach? limit jump the one Q&A, of question-and-answer But portion call, and Zach has

most We on higher important XXX,XXX progress Martin. metrics has the as Model rate make quarter. a by of each year. annualized the We're of of higher new also X primarily an further setting increase ramping cars, quarter, Thanks, Overall, the achieve the Yeah. production of QX. quarter XX% great records production in factory. financial been end last The run Shanghai over for the driven we than rate able continuing million were Y Company, to just same than and over to cars our delivered last XX% at towards

note have program But we bit and production while adjustments deliveries run our and supply a volumes difference have Model to all We've we It's we ramp vehicles to and variability, chip through their X. have exceed has progress, made been prior to want our factories to important and get our in of to exceptionally year-to-date, Europe. historical has thank has logistics work to increasing completed targeting to demand, made market as these challenges. we're expertise S, of Model to These the as America started impressive recently been to this showing this flexibility to introduce production capacity. time production also for huge we doubled more and tiers Shanghai This difficult Due will achieve. transition deliveries team the to us take able industry shortages enabled chain factory levels. part have more It based supply to across North of for real-time. our roughly at the main a full that I on to teams make Y teams' our incredible in hub. back volumes. managing Model great not Additionally, export

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some were there QX, in actions. case from net the pricing benefit was As

However, we in Beta mind recent Supply to time context headwinds, expedites, given provide the case backlog, including quarter. contributors. will from Note take flow of changes as challenges, FSD not impact other in for this was also remains keep program. small that it that of through recognizing the continue Please to our yet the chain FX additional are revenue the with this cost also financials.

our While as labor which to pricing, compensate. P&L we have I of from the commodity marginal benefit last the are fixed profitability and to mentioned absorption. each rise been we incremental seeing in an in cost Overall, with help adjusting impact from should costs, our also call, unit higher continues

costs, volume, of out on previously. and As manufacturing, margins, billion of overhead of and to the able generated under guidance just On great supercharging, operating XX%, result heavily exceeding capacity. to in operating margin long-term laid of appropriate we were flows cash, of $X.X cash build-out management the record we we've continued invest and a progress the an service achieve

of settlement of continue senior quarter. retire also notes interest We the debt, during billion our including rate to $X.X the XXXX early high

As a of year. XX% we rate for continued driving are quite bit the we will parts, required this heavily of but depend annual achieve we're pacing to forward, production growth target ahead look clearly QX of our growth. on availability

the phase health also done am and production. our accomplished, in excited team also execution. tremendous into very job improving of period our has for on time, We pushing in into at ramp. the are our the and and a our work in improve financial car I'm pace technologies hardest an are These the factories has QX our new which manufacturing factories, and partially proud the production of a what and lay of first-production pace ahead important ramp. work volume we difficult growth The keep precision Thank also lies these next to margins mind XXXX. in boundaries nearing while Berlin. you. product of while the predict important cars first will It's I to to milestone, that of we assembly Austin makes is exact as towards team short the on of Please it continuing stress, Overall,

Thank you that take much. website. we will And posted now institutional we our and questions on retail from very shareholders

to first delivered cells? should vehicles The expect question XXXX we be first is, the with when

Yes, thanks, perspective, complete reliability gone Fremont be non-cell Martin. range, testing the line quarter. battery on to to-date track structural Earlier well, are year, and and is Testing crash, support. has manufacturing from this on is a track to next

this However, new architecture, similar still. said to what Zach and is before, unknowns a exist may unknown

are priority top pack matching design quality manufacturing we Our timeline with is we the the I and from just perspective, what readiness, ensuring And deliver. and cell maturity comfortable mentioned.

much. very you Thank

of question biggest in second from start now The then? production institutional the comes, XXXX. from model to do until you are still the $XX,XXX expect hurdles investor What

a rates production as quickly working on strategy to Yeah, possible. our increase we're as

think complexities trying a Zach this don't And I the least world. the spoke constrained is of add incremental we're we're well. to while generally want any to We when vehicles in business. amount to add to cell new lineup that doing our to

there While ramping still Shanghai. more X Fremont existing further also to grow expansion restore to products, in and on in while is also levels, focused these in pass runway in we Berlin, production are Y S&X Fremont to and Model Y growing

capacity, of time will inherent products full well our and Model as Y depend before, supply chain, increasing our be through the many both as other mentioned cell from course And product launch we completing next and our suppliers plate Austin, our on face after cell, currently we've headwinds Cybertruck. table. that's on and in in As

very you much. Thank

pushed Beta be with is, can a training are versions question and wider any third with out set quickly biweekly weekly to even is The and how software audience, dataset and iterate early released to exponentially takeaways or to FSD explode daily? wider to there regards from

The up from and that that whole infrastructure training, bottom, huge takes we realistically, needs much about AI computer. a say updates. so software and can day Day whole This testing more mentioned collect, to Dojo more makes much point, set with but for faster At the updates. to now. do faster a instead how when the If often of Dojo, can difference instance, But in where ability as comes we we've push collected. more substantially not on there's be this of we lot iterating how one iteration. top iterate to process for our it's be we play week, quickly validation, into out able we will training comes In data to in data is than including one

daily not really are updates for So realistic now.

an Thank to so necessary you achieve units, very $XX,XXX on future in is, world diversity provide over development million much. cars units to model be update XX annual SxXy with possible only and in the best-selling and just The is much how you X million "Can next The in will question volumes? fleet car?" it sell today achieve truck your slightly the XX million

Martin. Thanks,

is X X growth record we've sedan As Model Model where luxury we've seen the mentioned Y and segments Model in before, worldwide. bestselling both currently

be in these Y world. at meeting, segments molds to mentioned shareholder's our new with Tesla product. the we the in bestselling Model As each poised to break continues vehicle hope to is do we so and vehicle

of the publicly, small large expand across massive the larger As do SUVs, with, believe major of and we've course, we'll sedans, said all and space we will vehicle be Along to need item to to and that volumes, to eventually we segments get so. robotaxi. in trucks mid-size,

Austin question capacity Tesla you is next and X current shareholder for goal very production Thank XXXX? from by much. the for a retail Shanghai, vehicle Fremont, question, The what 's is, Berlin factories,

Martin. Thanks, Yeah.

XX% here per is on grow Company a as of year. goal to pace an average Our

you the what's time, boundaries than could to In so, the of can There slightly some goal efforts, extrapolate periods which that time lower that. push long-term of some that of we're there. periods And be despite remains best be we're the may well There Company. we're where out. possible of Fremont, But ahead continuing that. in of

based what another the targeting cars production. the bottlenecks to we increase potential factory last done XX%. about that the upon of months, that where everything the XXX,XXX are, we've And in know is, XX Over we’re

on team goal, will the goal continue be the push that. has. to they're that think And I going that to a internal but difficult that's

production As we we're well. to the there, look as boundaries towards continue we to ramp there Shanghai, push and continuing

the our continue significant QX. that to up iterations there amount time on Model Y. plans, our have these a the which But Berlin to to because And volume factories Y, of there Model ability capacity land ramp they So of ramp most first are to capacity contributor are growing was which quite in intentionally factory. our with we've expand. and keep locations and in and recently, factory. in factories in Austin of that biggest interesting set We'll are

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to millions ultimately be over the going annual get to years. grow a in achieve long of is the couple of cars And with eye goal feasibly then quickly year. cars We're to per XX our million So, growth rate. XX% as possible as year is next term, to towards per an able

the is, of on Thank in for The How request Great. is online. very broad tightening much. manage to NHTSA? next investigation have will with view the regulatory critical engaging what and nominees data environment these you recent by publicly Some FSD, your including question environments? short-sellers the NHTSA you of been FSD

Martin. Thanks,

the inquiries the been to both the regulatory regulatory them bodies share approaches active and knowledge cutting our taking on and at safety. for technology they're with place worldwide on engage and have we years, of always FSD, and our passive subjects. other As are all development. especially we with on NHTSA edge There ongoing time, work to

investigations, possible. these my as During as team, cooperative always are much myself,

primary videos as their our is scrutiny we and performance previous in our as how developing prevents and And of injuries. in to saves we'll is update. and these then We the This is -- coming an see shared products on ultimately software from designing so, latest all truth I've to the just continue in end priority hardware expect the review will the transparent and we shareholder that innovations which be public products of lives a about wide our you be technology our media. FSD a that from all a know variety the from In doing embrace team safety and on social have can safety data, both And take autopilot motivation post an of said engineers top the designs. that incredible also the customer on of calls, because matters.

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excited this collaboratively that journey to to And a here, I to transition vehicle. Lars software-oriented bodies to We're the all as on So with partner. who regulatory thing. is want a work great we'll go mentioned think

question with the taking to an very much. key improve out is some supercharger in service experience you Thank The has untenable customer available Tesla or at appointments months areas? locations. is, What out. two weeks these steps wait concrete even next become remains issue Likewise,

take supercharging the of part service this Drew, the you take question. will I can part.

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impacted this the been And that demand service increase to has service, so, for in supply mentioned. ability reasons there's for where the simultaneous I

been then come our seen an saw And service in extremely working course we address And hard primarily Europe this. and so, North And uptick of the times and since wait over America the to summer. times down. we've we've wait

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you much. very Thank

on one just to want thing add I supercharging.

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Yeah.

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Yeah.

operating We target. our achieved actually -- we've margin on long-term have guidance exceeded our

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so And those put ramp. factories our on margins likely some that's pressure downward to as

work possible. Our of unknowns goals that mentioned Drew are need earlier, to number quickly those But ramp we'll to through. as as unknown are a as there

in We structure. uncertain are with cost environment also to respect this

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do Thank a follow-up you you, Joe, have question?

understanding to My Yes, in other around the you acts range models. you from comes have LSP mentioned that for China. continued is the all capabilities question plan just globally or LSP do go-forward standard want Is the that factories world? is

working our vehicles where produced. on the upstream are -- possible. closer as at with goal just not goal. far not the parts of that assembly least at vehicles level, internally localize end continent, And all with Certainly, the is and We're That the to to goal. that accomplish key if suppliers our is Yeah. the continent, as to our but

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on following question Just the before. actually up

you Have have might look any contracts Cobalt, to the the job good up and not, materials raw lot up? any of raw battery, XX%. that so arising, commodities lithium, of I in long-term actually a And spike? You mentioned material impact. mitigate if at or know headwind sense a impact I guys key done when And show of shown getting has up all Nicole, seen you from that that far, when

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an have seen We impact.

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have of also based -sharing indexes. where some there's contracts the movement cost upon of amount We

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up renew some contracts them, point certain that to return have to to been there the And extend to certain of we have have absorbing we'll and are increase. maybe substantial. expire And negotiations. a as So there, suppliers

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Fantastic. Thank very you And you your much, see very and much Thank everyone, all again three questions. for in we'll months. you goodbye.