I’ll give you an update on Tesla performance.

▶ 3Q24 Earnings Summary

• Revenue $25.2bn, Consensus
• Revenue gross profit of $5.0bn, above consensus +17%
• Operating profit of $2.7bn, above consensus +43%
• Earnings Per Share (Non-GAAP EPS), Above Consensus +20%
• Profitability Turnaround Checked: 1Q23 19.3%, 2Q23 18.2%, 3Q23 17.9%, 4Q23 17.6%, 1Q24 17.4%, 2Q24 18.0%, 3Q24 19.8%.
• Profitability Turnaround Basis #1. Automotive Business Records Lowest Manufacturing Cost per Unit (~$35,100)
• 1) Cybertruck Ramp-up (U.S. electric vehicle sales, ranked third behind Model Y/3), 2) 4680 reduced manufacturing costs and expanded economies of scale, 3) restructuring (progressing 2Q24), 4) software (FSD) sales growth, 5) fixed costs reduction by increasing total sales, and 6) Credit sales growth due to sluggish sales of Legacy OEM electric vehicles will continue in 4Q24 and 2025
• Profitability Turnaround Basis #2. Energy/Services Business Continues to Improve Its Appearance and Profitability
• The energy business varies in revenue and cash perception volume in each quarter, depending on progress. 3Q24 revenue growth rate +52% YoY, and 4Q24 growth is confirmed. Strong demand closes all orders for production volume in 2025. 3Q24 profitability broke an all-time high (30.5% gross profit margin). The service business (AS products, other products, superchargers) continues to grow, accompanied by increased cumulative vehicle sales. 3Q24 revenue growth rate +29% YoY. Superchargers sales growth is expected to accelerate in 2025, along with the expansion of vehicles covered by NACS in North America
• FYI, the current gross margin consensus for 2024/2025 is only 17.4% and 18.2%, respectively
• Cash flow also records remarkable performance. Operating cash flow $6.3bn (consensus $4.0bn). CAPEX $3.5bn (consensus $2.6bn). Free cash flow $2.7bn (consensus $1.4bn).
• Large-scale GPU clusters for driving artificial intelligence training / 4680 production lines expanded / CAPEX was dropped more than expected in preparation for the launch of new models. Nevertheless, by generating the largest operating cash flow ever, cash reserves have reached an all-time high and financial soundness is further strengthened

▶ a key confirmation issue

• Elon Musk’s response to the question, “What is the plan for 2025?” is “Great. So many things. I mean, like crazy thing, Tesla is basically on every single thing we do. If we are not winning now, we are on track to win.”
• Confirmation that cognitive transition to artificial intelligence players is in progress, not automobile companies. A total of 11 performance-related Q&As. Excluding the 2025 forecast questions, 10 Q&As consist of 4 new car questions, 1 service center question, and 5 artificial intelligence HW/SW questions
• Sales volume in 2025, +20-30% forecast compared to 2024. Lower interest rates are positive for new car sales expansion, and sales growth can be accelerated by launching new cars and strengthening FSD marketability. Sales forecast band, 180-19 million units in 2024 / 2.2-24 million units in 2025
• Low-Price New Model, Ready to Launch in First Half of 2025 Normal Progress
• Cyber Cab, a Robotaxi exclusive model, can be mass-produced in 2026. Aim to produce 2 million units per year. It is expected to expand to 4 million units per year through diversification of production bases
• Express confidence in advancing the capabilities of FSD, an autonomous mobility software. Starting with the latest version, v12.5, all the codes for road driving have been fused into Single-Stack, and new features for ride-hailing have been added (Actually Smart Summer). Training on the H100 29k scale at Cortex, a GPU cluster, is underway, and it will soon expand to 50k scale. I mentioned that the constraints of the training infrastructure that I’ve been mentioning over the past year have now been removed. We’re checking weekly performance improvements, and v13 will be released soon. v13 will improve the frequency of interventions 5-6 times compared to v12
• Consumers’ FSD take rate is recording a significant uptrend. Regarding this, he said, “We are seeing a signatory improvement and promotion. So of the take rate of FSD imputed especially after the 10/10 event.” Promotions for FSD will be strengthened to reduce consumer’s Awareness Gap on improving FSD performance