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Negotiations are under way to authorize FSD to a large car company.

Author | Cao Tingting in the state

Musk didn't take much advantage in the face of a fierce price war.

According to the latest financial report, Tesla's gross profit margin fell to 18.2%, lower than the market expectation of 18.8%, which is also the lowest in nearly three years.

Source: boss Tesla but Ma does not believe in evil and wants to fight the price war to the end even if the profits are reduced.

"if the market as a whole is stable, I think prices will be stable, and if they are unstable, then our prices will be even lower."

Obviously, Musk is willing to sacrifice profits to seize the market in order to sell the car. In his view, this is very meaningful, because "it will make Tesla's valuation rise significantly."

During the earnings call, Musk also revealed a lot of hot news:

For example, FSD (fully autopilot) is talking about licensing with "some mainframe factory"

Although production capacity has dropped this year, the delivery target is still 1.8 million vehicles.

Brain-computer interface company Neuralink can provide bionic prosthetics for amputees.

Revenue increases, gross profit margin drops, Q3 production capacity may decline in the second quarter, Tesla's revenue was 24.927 billion US dollars, an increase of nearly 8 billion US dollars compared with 16.934 billion US dollars in the same period last year, a year-on-year increase of 47 percent, and this figure is also up from 23.329 billion US dollars in the previous quarter.

In terms of delivery volume, Tesla also ushered in a new record. Tesla delivered a total of 466100 electric vehicles in the second quarter, an increase of about 86% over the same period last year, and produced a total of 479800, still better than market expectations.

Source: Tesla but Musk also revealed on the earnings call that production capacity is expected to show a "slight decline" in the third quarter due to disturbances such as seasonal factors.

In the second quarter, Tesla's net profit was $2.703 billion (about 19.4 billion yuan), up 20% from a year earlier and much higher than market expectations of $2.39 billion, while free cash flow was $1.01 billion, below market expectations of $2.18 billion.

Source: behind Tesla's eye-catching delivery and revenue, it is lower than the market expected gross profit margin.

Tesla's gross profit margin was as low as 18.2% in the second quarter and 19.3% in the first quarter, which is Tesla's lowest gross profit margin in nearly three years, and his operating profit margin also fell to 9.62%, down to varying degrees from last year and the same period.

Dan Ives, an analyst at Wedbush, predicts that Tesla's gross profit margin is expected to pick up in the coming quarters and return to 20 per cent in 2024.

Tesla's expenditure also increased sharply, rising to US $2.134 billion in the second quarter, an increase of 21% over the same period last year.

As of press time, Tex Latin America shares fell 4% to 279.61 in after-hours trading.

02. The price war will continue. The reason why the gross profit margin has been reduced is mainly due to Tesla's continuous price reduction in the first half of the year.

In the two major markets of China and the United States, Tesla has repeatedly cut the prices of his main selling models Model 3 and Model Y, as well as introduced promotional policies such as discounts and bonus points.

The sharp reduction in prices also puts direct pressure on gross margins. Reuters calculates that Tesla's gross profit margin for cars excluding regulatory credit fell to 18.1 per cent in the second quarter from 19 per cent on Q1. By comparison, the figure was 26 per cent a year ago.

Even so, under the pressure of the overall environment, Musk said that the price war will continue.

"sometimes it seems that the world economy is collapsing, but the next day everything seems to be all right. I really don't know what happened. We are in a period of turmoil."

Since in the turbulent period, it means that Tesla will continue to implement the strategy of small profits and quick turnover, reducing the price to ensure the share of sales.

As for the price reduction, Musk has said many times that the price reduction is not malicious competition, but because Tesla's production capacity is upgraded and manufacturing costs become lower, so he cannot continue to sell the original price, which is a normal market price adjustment.

Of course, Tesla kept adjusting prices, he also dumped the Federal Reserve, saying that Tesla's performance is good enough, but we can not control the Federal Reserve, this is the real problem.

03. FSD is already talking about customers. FSD is Musk's most valued asset, and it is also the strength that Tesla can continue to fight a price war.

Mr Musk said at the earnings conference that Tesla's autopilot software would be a business with the biggest change in asset value. Before that, he even said that he could sell cars at "zero profit".

At present, the owner of Tesla has used the FSD Beta version to drive a total of 320 million miles. Musk did not give a direct answer to the question when the official version of FSD will be released, saying only that by the end of this year, the driving level of FSD will surpass that of human beings.

Source: Tesla said on Twitter in early June that he was willing to license Autopilot or FSD to other car companies. In his view, authorizing FSD is as simple as an open charging standard.

Now that FSD's first potential customer has arrived, Musk revealed that he is in talks to license FSD technology to a large car company, but he didn't say which one.

Guess, which brand is the first to win the bid for FSD?

In fact, there are not many options. In the United States, GM and Ford are both developing their own self-driving technology, so there is a good chance that Tesla's FSD will not be used directly.

04, on Cybertruck and 4680 Musk said that the Cybertruck is the first truck with four doors, more than 6 feet of cargo compartment and can fit into a 20-foot garage, using a lot of new technology. "Tesla has worked hard on every millimeter of the Cybertruck."

The superplant in Texas is currently installing equipment to produce the Cybertruck, and the delivery schedule is still on schedule, which means it can be delivered by the end of the third quarter of this year and begin mass production next year.

Source: Tesla just last weekend, Tesla's first Cybertruck went offline at a super factory in Texas. But the backlog of orders has also become a worry for Musk's happiness.

According to overseas Tesla Cybertruck order statistics, as of June 2023, the effective order volume of the car has exceeded 1.87 million.

"the demand for Cybertruck is much higher than expected and there is no end in sight."

At Tesla's 2023 shareholders' meeting in May, Mr Musk said Cybertruck was expected to produce between 250000 and 500000 vehicles a year. This also means that Tesla will need about 4 years of full production to meet the existing Cybertruck demand.

Source: Tesla in terms of batteries, Tesla executives said in a conference call that Tesla's current focus is to increase production, battery costs have been reduced by 25%. The 4680 output of the Texas plant also increased by 80%. When Cybertruck becomes large-scale, Tesla expects his 4680 project to reach a fairly good level.

The implication is that Cybertruck comes standard with 4680 batteries.

For the next-generation platform, Tesla said that its next-generation platform continues to "make progress".

Dojo produces this month and delivers 920000 new cars in the second half of the year. Musk said he would invest more than $1 billion in his so-called "Dojo project" by the end of 2024.

The internal supercomputer is being designed to process large amounts of data, including videos from Tesla's car, which are necessary to create self-driving software.

Source: Tesla plans to start production of Dojo computers this month. Tesla said that the use of self-designed Dojo hardware can meet the huge neural network training needs, the stronger the neural network training ability, the greater the chance for Tesla's autopilot team to iterate out a new version of the plan.

At present, Tesla has produced 10 Optimus robots and is expected to do some simple work in the factory next year.

Speaking of plans for next year, Tesla still expects 1.8 million cars to be produced for the whole year. This means that Tesla will have to deliver 920000 vehicles in the second half of the year to achieve his target.

In addition, Tesla also mentioned that the Shanghai super factory, which is still a major export center, has been operating at nearly full capacity for several months and is not expected to increase much per week.

This article comes from the official account of Wechat: Superelectricity Lab (ID:SuperEV-Lab), author: Cao Tingting in Zaizhou

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