Elon Musk trumpeted the rich potential of self-driving cars, bemoaned the microchip shortage, and underscored the challenges of manufacturing at scale during Tesla’s second-quarter earnings call this week.
The Tesla CEO also criticized Apple, urged people to pursue careers in manufacturing, and suggested he might skip future earnings calls.
Here are Musk’s 12 best quotes from the earnings call, lightly edited and condensed for clarity:
1. “The chip supply is fundamentally the governing factor on our output. It is difficult for us to see how long this will last, because this is out of our control, essentially. It does seem like it’s getting better, but it’s hard to predict.” – referring to the global shortage of semiconductors.
2. “Those who have not actually been involved in the manufacturing ramp-up just have no idea how painful and difficult it is. You gotta eat a lot of glass.”
3. “It takes a while to hire people and train people to operate the factory. The factory is like a giant cybernetic collective, and you can’t just hire 10,000 people and have them work instantly. It’s not possible.”
4. “Don’t think this is the messiah or something.” – downplaying a change to Tesla’s batteries that could reduce production costs by 10%.
5. “We have the Baskin-Robbins of batteries. We have so many formats and so many chemistries that it’s like we’ve got 36 flavors of battery.”
6. “I really encourage more people to get involved in manufacturing. The US has an overallocation of talent in finance and law. I’m not saying we shouldn’t have people in finance and law. I’m just saying that maybe we have too many smart people in those areas.”
7. “The value of a fully electric, autonomous fleet is gigantic – boggles the mind, really. That will be one of the most valuable things that is ever done in the history of civilization.”
8. “At scale, we’ll have billions of miles of travel to show that a car with autopilot on is 100% or 200% safer or more than the average human driver. At that point, it would be unconscionable not to allow autopilot because the car just becomes way less safe.”
9. “You used to have elevator operators with a big switch to move between floors. But they would get tired or maybe drunk or distracted, and every now and again, somebody would be sheared in half between floors. That’s kind of the situation we have with cars. Autonomy will become so safe that it will be unsafe to manually operate the car, relatively speaking. It would be quite alarming if elevators today were operated by a person with a giant switch. That’s how we’ll be with cars.”
10. “The really remarkable thing that Tesla’s done is not to make an electric car or to be a car startup. The thing that’s remarkable is that Tesla didn’t go bankrupt in reaching volume production. Out of all the American car companies, there are only two that have not gone bankrupt and those are Ford and Tesla. The seeds of defeat are sown on the day of victory. We will endeavor not to make that the case of Tesla.”
11. “Our goal is to support the advent of sustainable energy. It is not to create a walled garden and use that to bludgeon our competitors, which is sometimes used by some companies.” – likely referring to Apple’s ecosystem of hardware, software, and services.
12. “I will no longer be the default during earnings calls. Going forward, I will most likely not be on earnings calls unless there’s something really important that I need to say.”
Tesla on Monday posted its most profitable quarter yet, beating Wall Street’s expectations even as a microchip shortage and other supply-chain troubles complicate car production.
Here are the important numbers:
Revenue: $11.958 billion, compared to an expected $11.36 billion
Earnings: $1.45 (adjusted) per share, compared to an expected $0.974 per share.
Elon Musk’s automaker reported $1.14 billion in (GAAP) net income, more than double the $438 million it made during the first quarter of 2021.
For the first time, Tesla’s quarterly profits exceeded $1 billion. It’s also the first quarter that Tesla turned a profit even without counting sales of zero-emission credits to other automakers, a revenue source it has historically relied on to stay in the black and which tallied $354 million for the quarter.
Tesla said it was able to grow its operating income mainly by increasing volume and reducing costs. That growth was offset by factors including a $23 million depreciation of its bitcoin holdings.
The company has posted strong sales figures in 2021 even as a global chip shortage hobbles vehicle production worldwide and forces automakers to idle production lines.
“Supply chain challenges, in particular global semiconductor shortages and port congestion, continued to be present in Q2,” the company said. “The Tesla team, including supply chain, software development and our factories, worked extremely hard to keep production running as close to full capacity as possible.”
However, Tesla said it has shifted production of its electric semi-truck to 2022 due to “global supply chain challenges” and to focus on ramping up production at upcoming factories in Berlin and Austin. The company said it expects to start production at both plants in 2021. The Berlin facility was supposed to open July 1, but bureaucratic hurdles and environmental concerns have delayed those plans indefinitely.
The electric automaker delivered 201,250 cars during the second quarter, smashing the 184,800-vehicle record it set during the previous three months. That put Tesla on the path toward selling more than 800,000 vehicles in 2021, a significant increase over the 500,000 it sold in 2020.
Shares moved higher by about 1.5% in late trading Monday following the release.
Range anxiety is almost always cited as one of the biggest hurdles to widespread adoption of electric vehicles.
Today, most people would rather own a car that they can drive vast distances and fill up with dinosaur goo in a matter of minutes over a battery-powered vehicle with limited range and a slower charge.
But the fear of running low on electrons without a plug nearby may soon be a thing of the past.
Battery technology is improving quickly, and there are several electric cars on the US market that can travel well over 200 miles between charges – plenty for most short or medium-length trips. The best of the best can go more than 300.
Here are the 10 longest-range EVs you can buy in the US today.
10. Kia Niro EV – 239 miles
Starting at $39,000, Kia’s electric crossover offers solid range for less than the price of the average new car in the US. Plus, when you factor in the $7,500 federal EV tax credit, the Niro becomes even more of a bargain. There’s also a fancier trim on offer for around $45,000.
9. Chevrolet Bolt EUV – 247 miles
For 2022, Chevrolet launched a compact crossover version of the Bolt EV – the Bolt EUV, standing for “electric utility vehicle.” The $33,995 EUV is a bit bigger and rides a bit taller than its cousin, giving it a slightly shorter range.
8. Hyundai Kona Electric – 258 miles
The 2021 Kona Electric retails for $37,390 and puts out 201 horsepower. It’s built on the same platform as the Kia Niro. An Ultimate trim is available for around $46,000.
Chevy gave the Bolt EV a radical redesign for the 2022 model year, keeping the hatchback’s egg shape but bestowing it with sharper looks all around. The new model has an identical range to its predecessor, but a reduced starting price of $31,995. That makes it one of the cheapest EVs you can buy.
6. Volkswagen ID.4 Pro – 260 miles
Volkswagen is trying hard to catch up to Tesla, far and away the dominant force in EVs. And although its rebrand to “Voltswagen” turned out to be a badly timed April Fools’ Day joke, the company is making strides toward that goal. The ID.4, its first US-market EV, launched in early 2020 for $40,000.
5. Ford Mustang Mach-E – 305 miles
The Mustang Mach-E came on the scene in late 2020 as Ford’s first EV. Its California Route 1 trim has the most range, while the base Select model delivers 230 miles. Other ranges are available depending on whether customers choose a larger battery or all-wheel drive.
The Mach-E California Route 1 will run you $50,400 to start.
4. Tesla Model Y Long Range – 326 miles
The Model Y ranks at the bottom of Tesla’s lineup in terms of range, but it still beats out every other EV on the market. The Long Range model will run you $53,990. As with other Teslas, a pricier high-performance model is available with less range.
3. Tesla Model 3 Long Range – 353 miles
The Long Range Tesla Model 3 delivers more than 350 miles of range for $50,000. The base model, by comparison, delivers 263 miles of range for $10,000 less.
2. Tesla Model X Long Range – 360 miles
The $95,000 Model X crossover is Tesla’s second-oldest model behind the Model S. The burly family SUV not only has one of the most impressive ranges in the industry, it also claims to hit 60 mph in 3.8 seconds.
1. Tesla Model S Long Range – 405 miles
Tesla’s flagship Model S has been the EV to beat for years. The sleek sedan leads the industry in range, and its most souped-up variant – the Model S Plaid – launched last month as the quickest production car in existence.
A handful of future EVs – notably the Lucid Air sedan – promise to go further than the Model S, but for now, Tesla remains the clear choice if range is your top concern.
Tesla has reigned supreme as the lord of electric vehicles for years, even as established manufacturers and scrappy startups attempt to come for its crown.
Two of the most promising upstart EV makers – Rivian and Lucid Motors – were on the brink of launching their first vehicles onto the US market this year. But the pandemic had other plans.
Rivian earlier this month told customers who had reserved Launch-Edition models of its adventure-focused SUV and pickup that they’d have to wait a few extra months to take delivery. The R1T truck’s launch was postponed from July to September, while the R1S SUV will now arrive later in the fall, Rivian CEO RJ Scaringe told customers in an email.
“The cascading impacts of the pandemic have had a compounding effect greater than anyone anticipated. Everything from facility construction to equipment installation, to vehicle component supply (especially semiconductors) has been impacted by the pandemic,” he said.
Rivian first pushed R1T deliveries by a month in May due to hurdles like shipping delays and the ongoing microchip shortage, a spokesperson said.
Similarly, Lucid in February delayed the launch of its debut luxury sedan – the Air – to the second half of 2021. Customers were supposed to receive their cars in the spring. In a letter, Lucid CEO Peter Rawlinson chalked up the delay to the pandemic’s impact on the startup’s testing activities, supply chain, and its preparations for sales and service.
That was the second time Lucid shifted its plans due to the pandemic; the startup first planned to start producing the Air in late 2020.
With a claimed range of more than 500 miles and a starting price of around $77,000, the Air is set to give the Tesla Model S a run for its money when it hits streets – on paper, at least. Tesla has led the industry in range for ages with its 400-plus-mile Model S.
Lucid and Rivian represent two of the EV startups furthest along in their development. Both have operational factories, showrooms, and heaps of binding preorders, which can’t be said of most new companies trying to replicate Tesla’s success. Rivian has amassed several billion in funding from investors like Amazon and Ford. Lucid is preparing to go public through a reverse merger in a deal that will give it $4.5 billion in fresh funding.
Although Lucid is on track to start shipping cars this year, the pandemic has made the final stretch more difficult, Rawlinson told Insider. Lucid has run up against quality issues with some of its suppliers – problems that, under normal circumstances, would’ve been addressed long ago with trips to suppliers. The pandemic ruled that out.
But Rawlinson wants to get every detail spot on, and that’s why he pushed the Air’s launch.
“This is a one-shot deal to get it right. Why don’t we go really conservative?” he told Insider.
The subscription, which Elon Musk had been promising for months, is huge for some Tesla owners as it allows them to test out Full Self-Driving without blowing the college fund. Moreover, buyers can cancel at any time if they don’t think the feature – which automates some driving tasks but doesn’t make cars autonomous – is worth the cost.
But there’s an expensive catch that’s peeving some long-time Tesla owners.
People who bought their Tesla before the middle of 2019 need to fork over $1,500 to upgrade their vehicle’s computer if they want to subscribe. That directly contradicts the automaker’s 2016 announcement that all vehicles built from that point on would come equipped with the hardware to run Full Self-Driving.
“It feels like Tesla is screwing over its earliest supporters,” Arjun, who bought a Model 3 when it launched in 2018 and described himself as a “long-time Tesla supporter, stockholder, and fan,” told Insider. “We are not asking for a quick buck or a discount, we are just asking for the hardware we were told came preinstalled on our vehicles.”
Arjun, who asked that Insider not use his full name, said it was a “huge selling point” that his Model 3 came with Full Self-Driving hardware, given that he intended to purchase the software at some point down the line. He called Tesla’s move a “blatant bait and switch.”
Other Tesla owners in similar situations aired their grievances on social media.
“Would be nice to get a cheaper installation or something, considering we were helping them when dying was a real possibility for Tesla. However, I expect nothing,” one Reddit user said.
“I have a 2018 M3 and I’m furious,” another person said, referring to the Model 3 sedan. “I’d love to see some legal action taken.”
Some also lamented that in order to subscribe they have to buy Autopilot, a the company’s driver-assistance system that used to cost $3,000 but became standard on all Teslas in 2019.
Tesla didn’t return a request for comment.
When Tesla launched its latest-generation Full Self-Driving computer in 2019, it began offering free upgrades to owners who had paid full fare for the feature. But those who held out for the subscription are on their own.
Tesla has a shaky history of not delivering on its automated-driving tech. Musk has been saying since at least 2016 that full autonomy is right around the corner. He promised that by 2020, owners would be able to generate passive income by turning their cars into robotaxis.
But Full Self-Driving is still far from living up to its branding. The most advanced beta version of the software – currently in the hands of a couple thousand Tesla owners – requires full driver attention and still has major flaws.
Arjun says Tesla should cover the hardware upgrade costs for vehicles that Tesla claimed had the right computers to begin with.
“I love my Model 3 and continue to believe in the tech behind Tesla, but they’re no longer a start up and they have to behave like a company who stands behind their word,” he said. “I believe Tesla should waive the fee/absorb the cost, and then I’d be happy to try out the service. Until then, I’ll stay on my obsolete hardware.”
The P5 has a top speed of 105.6 miles per hour and can accelerate from 0 to 62 miles per hour in 7.5 seconds. Its estimated cruising range starts at 286 miles, rising to 373 miles for the more expensive models.
Xpeng launched pre-orders for the P5 in April and said that it expects to start deliveries in the fourth quarter of 2021.
The P5 is Xpeng’s second sedan. It started deliveries of its pricier sports sedan, the P7, in June 2020. It also sells the G3, a long-range smart SUV.
The P5 pricing announcement from Xpeng comes as Elon Musk’s electric vehicle giant Tesla struggles in China.
Tesla’s sales bounced back in May – but it then had to recall 285,000 cars in June for a remote software update because drivers were accidentally turning on its Autopilot feature.
While Tesla is struggling with its reputation in China, Xpeng is reporting record growth.
Xpeng said that it delivered 30,738 vehicles between January and June, an increase of 459% year-over-year, including record monthly deliveries of 6,565 vehicles in June. This was made up of 4,730 P7s and 1,835 G3s.
Li Lu introduced Warren Buffett and Charlie Munger to BYD, one of the pair’s best investments over the past decade. The fund manager seems less bullish on the Chinese electric-vehicle maker today, given he recently cashed out more than $300 million of its stock in the space of two days.
Li’s Himalaya Capital Management sold 7.1 million shares for around $29 each on July 8, and disposed of another 3.6 million shares at a similar price on July 9, Hong Kong stock-exchange filings show. The sales reduced its BYD stake by 15% to 62.9 million shares.
Himalaya raked in nearly $320 million from the sales, leaving it with a stake worth $1.7 billion at the last count. BYD’s Hong Kong-listed shares have slid by about 5% this year after surging roughly five-fold in 2020.
Himalaya didn’t immediately respond to a request for comment from Insider.
BYD counts Himalaya as its second-largest shareholder after Buffett and Munger’s Berkshire Hathaway conglomerate, according to the automaker’s latest annual report. Li originally told Munger about BYD, spurring Berkshire in 2008 to spend $232 million for 225 million shares of the company – a stake worth over $6 billion today.
Munger – Buffett’s business partner and Berkshire’s vice-chairman – has effusively praised the Himalaya boss in the past. He dubbed Li “the Chinese Warren Buffett” in 2019, revealed the fund manager was the only outsider he’s ever trusted to invest his money, and said in 2010 it was a “foregone conclusion” that Li would eventually hold a leading role at Berkshire.
Audi has launched the E-Tron GT, a high-end sport sedan that’s a sibling to the Porsche Taycan and takes aim at the Tesla Model S.
The E-Tron GT, revealed through in February, hit the market on Tuesday, Audi said. It starts at just shy of $100,000 for the base model, with another trim level retailing for around $107,000.
The top-of-the-line, high-performance RS model will cost $139,900, $10,000 more than Tesla’s sportiest sedan, the Model S Plaid. The RS E-Tron GT, we found out in May, is an absolute hoot to drive.
Although the E-Tron GT doesn’t promise quite the same extreme performance as the Plaid, it’s certainly not lacking on that front. It shares its underpinnings with the Porsche Taycan, as both brands fall under the Volkswagen umbrella.
Powered by two motors – one at each axle – the standard model puts out a combined 469 horsepower and 464 lb-ft of torque, by Audi’s estimation. The company says it can hit 60 mph in 3.9 seconds, on its way to a top speed of 152 mph.
The RS version steps things up a notch with a more powerful rear motor that boosts total output to 590 horsepower and 612 lb-ft of torque. The RS goes from 0-60 in 3.1 seconds and has a top speed of 155 mph, Audi claims. The RS accelerates quicker than the V10-powered Audi R8 sports car, the company notes.
As for range, Audi says the E-Tron GT can travel 238 miles on a charge, while the RS model can go 232 miles. Using DC fast charging, the car can add 62.1 miles of range in five minutes or recharge from 5% to 80% battery in a little over 22 minutes, according to Audi. Tesla, for comparison, doesn’t sell a Model S with less than 390 miles of estimated range.
The E-Tron GT gets a leather-free interior as standard, featuring recycled and synthetic materials instead – although buyers can add leather as an option. It comes equipped with a 12.3-inch display for the instrument cluster and a 10.1-inch main touchscreen, a bit more restrained than Tesla’s 17-inch center screen.
Notable options include four-wheel steering, upgraded headlights, a head-up display, massaging seats, adaptive air suspension, and a carbon-fiber roof for the RS model.
Audi plans to have 30% of its US lineup be either fully electric or hybrid by 2025. The brand has made headway on that front by launching the E-Tron and E-Tron Sportback crossovers – and in April it revealed its cheapest EV yet, the sub-$45,000 Q4 E-Tron.
“Deutschland rocks,” Elon Musk told reporters during a September 2020 visit to the construction site of Tesla’s first European car plant. Nearly a year later, Gigafactory Berlin’s planned July 1 opening date has come and gone, and there’s no word yet on when it will open.
Since beginning work on the sprawling plant in early 2020, Tesla has faced setback after setback over issues like environmental impact and permitting. It all means that Tesla is way behind schedule in opening up the factory, the cornerstone of its European strategy where it plans to churn out half a million cars annually.
With traditional carmakers like Volkswagen, BMW, and Mercedes-Benz doubling down on electric cars and breathing down Tesla’s neck, the company likely wants to avoid any more stumbles. But it remains unclear when the plant will open its doors.
Elon Musk vs. German bureaucracy
Tesla has hit one bureaucratic slowdown after another since it broke ground in the small town of Grünheide, near Berlin.
This whole time, Tesla has been building the factory under a series of provisional permits – at its own financial risk – as it waits for full approval from the environmental authority in Brandenburg. Theoretically, it would have to dismantle the plant if the project isn’t given the green light, and it’s unclear when Tesla will get full authorization.
Tesla has gotten fed up with the delays. In April, the company sent a letter to the Brandenburg state government complaining about the “irritating” approval process that had begun 16 months earlier, Bloomberg reported.
The problems haven’t gone unnoticed by Musk, either.
“I think there could be less bureaucracy, that would be better,” the CEO told reporters at the Grünheide site in May.
A battle over lizards
Tesla has also met fervent opposition from environmental groups who are concerned about the mammoth plant’s impact on the local wildlife and water supply. Activists have mounted demonstrations and gone through the courts to make their voices heard.
In February 2020, as Tesla prepared the site for construction, a German court ruled that the company had to temporarily stop clearing trees while it considered objections from the Green League. Courts told Tesla to suspend deforestation efforts again in December after activists complained that construction was disturbing the habitats of hibernating snakes and lizards.
Environmentalists are also worried about the plant’s effect on the local water supply since part of it is located in a drinking-water protection area. Tesla has revised down its water demands.
A delayed opening
While Tesla’s sky-high share price makes it the most valuable car company on the planet, it didn’t earn that title by selling the most cars. Far from it.
The company moved a record 500,000 vehicles in 2020. Some of the world’s largest automakers sell that many of a single model. Expanding production volumes and ramping up sales is crucial to Tesla’s future profitability, especially as legacy manufacturers and startups begin to flood the market with new EVs.
So when will Gigafactory Berlin get up and running?
In April, Musk said Tesla could start limited production at the plant by the end of the year. But, as Musk himself admits, he’s not the best with predictions.