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With the recent results of Tesla’s earnings being released (TSLA) , today Elon Musk and some members of the board had the quarterly earnings call. Below are some short hand notes I took during the call. One important comment made by Elon was regarding the possibility of raising more capital. A question was made about investors believing the company would be better off if it raised more cash base, in which Elon responded that he didn’t think raising capital is a substitute for running more efficiently, “…it’s healthy to be on a Spartan diet for a while, THERE IS SOME MERIT IN RAISING CAPITAL, THIS IS PROBABLY THE RIGHT TIME”.

Another interesting question was asked about how Tesla could pull off producing the amount of Model Y cars to keep up with demand. Elon elaborated a little bit stating that they can make better use of warehouse space and add onto the West side of the building in Freemont.

One caller went directly into asking if or when Tesla might make their data publicly available for others to analyze and draw their own conclusions about how safe Tesla cars are using their own data to support it. Elon stated that Tesla will continue to only release data they feel is pertinent to the public and that Tesla does share data with the insurance industry, but is unlikely to change how the company keeps their data only internally accessible.

Here are my short hand notes, in most cases I paraphrased the responses I thought were noteworthy, these are not direct accurate quotes as I couldn’t type that fast on my phone 😉

Notes:

Q1. Results
1/2 of all deliveries occurred in last 10 days
Could not get all vehicles delivered in time and some will bleed into Q2.

Expect quarter ending bal to increase
$188 m adjust, included price increase. $67 mil restructuring
$501m revenue
20% gross margin
S&x reduction

Q: When will semis be ready?

A: Prod next year. Make batteries in Reno.


Q: How soon will consumers get FSD computer?

A: 2-3 months start releasing features.


Q: Will the model Y be produced in CA or NV?

A: Append building space to west side of building and use warehouse space in Fremont .

Comment: Demand returning to normal in Q2.
Reduced production in Q1 to get longer range out . Will exit Q 2 at a higher rate.

Q: Still expect 90-100k units?

A: Wave results in Asia and Europe first half, second half US. This is not a good experience for customers, need to unwind this. Pricing adjustments might affect profit in Q2 also.

Q: When can we see Tesla make data available data for everyone to scrutinize results?

A: Tesla will just continue to report like they are now. They do share info with insurance industry as far as accidents, etc. continue at a broad stroke level.

Q: How important is it for Tesla to be publicly traded?

A: Elon would prefer to be private . That ship has sailed.
Price of stock is a distraction at times , not sure what to do about it.

Q: 50k North America model 3, is that a number since price adjustments ? What is the timing of this number in relation to current date?

A: There is demand since announcement. Avg ASP is increasing each week, this represents most recent data. Over 50% orders are for long range model.

Q: Does current order flow support 90-100k units?

A: Musk thinks they are fine.

Q: Investors believe company better off if they raised more cash base, seems like self funding might not work?
A: Don’t think raising capital is a substitute for running more effectively. Healthy to be on a spartan diet for a while. There is some merit in raising capital, this is probably the right time.

Q: Does this mean you will raise capital?
A: Elon doesn’t think it’s a strain in growth. It is important to show they are stable and are spending money efficiently. There is some merit in raising capital . Tesla did raise capital for Shanghai factory.

Q: Will people in Europe and China need to wait longer due to the change in delivery strategy?

A: No they would receive sooner, instead of batches they would blend production throughout the quarter. In Q1 all cars were arriving at the same time. Need to unwind this method.

Q: Question regarding the statement that sales will be all online sales.

A: Will add stores where it makes sense. Will close stores where sales opportunities are low, no-brainer. In store they push you to do it on your phone All online does not mean all stores are closing.

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