Q124 TSLA earnings
earnings summary
Earnings Results: • Q1 navigated unforeseen challenges and ramp of updated Model 3 in Fremont • Auto margins declined from 18.9% to 18.5%, excluding impact of Cybertruck • Energy storage deployments reached all-time high in Q1, leading to record profitability for energy business • OpEx increased sequentially from AI initiatives, future projects, marketing, and other activities • Negative free cash flow of $2.5 billion in Q1, driven by inventory build and elevated CapEx spend
Future Guidance: • Expect energy storage deployments for 2024 to grow at least 75% higher from 2023 • Updating future vehicle lineup to accelerate launch of new models ahead, potentially in early 2025 or late 2024 • Expect inventory build to reverse in Q2 and free cash flow to return to positive • Head count reduction savings expected to be well in excess of $1 billion on an annual run rate basis • Getting hyper focused on CapEx efficiency and utilizing installed capacity more efficiently
The Q1 2024 earnings call transcript reveals that Tesla navigated various challenges, including the ramp of the updated Model 3 in Fremont and an uncertain macroeconomic environment. Despite these headwinds, the energy business achieved record profitability due to all-time high storage deployments. Tesla also continued to expand its AI training capacity, more than doubling compute sequentially.
Looking ahead, Tesla is accelerating the launch of new, more affordable models to potentially begin production in early 2025 or even late 2024. These vehicles will utilize aspects of both the next-generation platform and current platforms, allowing for more efficient production on existing lines. The company expects energy storage deployments to grow by at least 75% in 2024 compared to 2023, contributing significantly to overall profitability.
Tesla is focusing on cost reduction initiatives and CapEx efficiency to improve profitability and enable increased investments in AI. The company made the difficult decision to reduce head count by over 10%, with expected savings exceeding $1 billion annually. Despite the challenges faced, the sentiment remains optimistic about Tesla’s future, particularly in the realm of AI and autonomy.
Notable quotes: “In conclusion, we’re super excited about our autonomy road map. I think it should be obvious to anyone who’s driving V12 in a Tesla that it is only a matter of time before we exceed the reliability of humans and we’ve not much time with that.” - Elon Musk
”Once again, I would like to thank the whole Tesla team for delivering great results. And we can open it up to Q&A.” - Vaibhav Taneja
”I think Optimus will be more valuable than everything else combined. Because if you’ve got a sentient humanoid robots that is able to navigate reality and do tasks at request, there is no meaningful limit to the size of the economy.” - Elon Musk