intercst
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Because the effect of tariffs on battery supply to Tesla presently depends a great deal on China, Trump announcing tariff pull backs just before this CC is what likely move the share price up.
Tesla changed out production lines across all 4 Model Y factories this quarter. It did this with āno major disruption,ā although it did lose a few weeks of production during the quarter. Leadership explicitly told us to expect this during the Q4 call. During the refreshes, the company said they also prepped capacity for the launch of its low cost mass-market model ready for shipments this year and likely Cybercab also.
Broader time frame Market share losses are also understandable:
Musk politics and the Model Y overhaul contributed to market share losses this last quarter, but I donāt think thatās the sole source; trends were worsening long before any of that began. The trend shows a marked decrease beginning a full year before Elon backed Trump, I believe the decrease in market share is easily explained by the massive media push by the petroleum backed incumbents +$B spend to convince the public to wait to switch to BEVs.
This Quarter:
Megapack (Grid Scale Battery Storage- 1/2ing the cost of energy by doubling the usefulness of Grid energy production) and Powerwall (home battery storage) both remain supply constrained, along with EV auto Credits from competitors, have increased Tesla margins while auto purchases decline during this time of economic uncertainty (good the lower priced autos are at least beginning to ramp this year).
Shareholder letter
- 4th straight quarter for record powerwall deployments.
- More than 1 gigawatt hour of powerwall deployments for the first time this quarter.
- Following completion of its Shanghai factory, it produced 100+ Megapacks (what was the entire Companysā prior Quarterly volume) at this facility.
- Humanoid robot is on track for 2025 pilot production with deployment of āthousands of bots doing useful work in the factories.ā this year.
- Models 3, Y & Cybertruck drive āare fully autonomous from production to specific locationsā coming out of the factory in Austin
- Launched Supervised Full Self-Driving (FSD) in China little to no local training data. Proof Tesla AI is a generalizable solution that will, āramp to the entire US extremely quickly next yearā!
- Continues to work towards Supervised FSD approval in Europe.
Batteries:
- Tesla debuted a Cybertruck 4680 cell battery that qualifies for the $7500 tax credit.
- Its USA lithium refinery is on track to start production in 2025.
- Model 3 and & Y deliveries in the USA now feature 100% USA-built batteries.
- Tesla says it makes the lowest cost-per-kilowatt hour battery cells in North America.
- On schedule for volume production of its semi-truck next year.
- Supercharging stations rose 17% Y/Y.
Because Iām still working, I am willing to own a mega-cap that is reliant on more favorable trade outcomes and/or value creation coming from potential product launches. Based on Teslaās track record, Iām confident that revenue and Gross Margin will re-accelerate by middle of next year. But, Tesla will need to keep convincing me that the future is theirs.
I understand that Muskās decision to act on the fact that time had run out for small measures, to save this planet, has alienated many. If Optimus and Robotaxi time-to-market optimism is well-placed, the runway is loaded with promising opportunity at Tesla. I deeply admire Tesla for their saving this planet in a timely manner, this one is a +30% position for me!
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Curious. I have not seen a single ad trying to convince people to wait. A few are promoting their hybrids, but that is a different thing. And one might wonder why this tremendous advertising push only affected Tesla, while virtually every other EV manufacturer showed gains.
From the āHook, Line, and Sinkerā newsletter, you might want to parse the words āUSA builtā, meaning āassembledā, while pondering the question of āwhat are they assembled out of?ā
As it turns out, Tesla batteries contain large quantities of imported materials, mostly from China but also from the Congo and elsewhere, as lithium and other materials like nickel-cobalt are in insuffient supply domestically. Itās like saying that car that claims itās āMade is Americaā forgets to mention that itās assembled in America from parts MADE IN JAPAN.
Here, perhaps this will help:
Where Does Tesla Get Itās Lithium
has deals with multiple lithium suppliers, some that are already producers and some that are juniors developing lithium projects.At the end of 2021, Tesla inked a three-year lithium supply deal with top lithium producer Ganfeng Lithium, and the Chinese company began providing products to Tesla starting in 2022. Major miner Arcadium Lithium (NYSE:[ALTM], which is set to be [acquired] by Rio Tinto also has supply contracts in place with the EV maker. (Rio Tinto is an Australian company. )
Chinaās Sichuan Yahua Industrial Group agreed to supply battery-grade lithium hydroxide to Tesla [through 2030]. Under a new, separate agreement finalized in [June 2024], Yahua is set to supply Tesla with an unspecified amount of lithium carbonate between 2025 and 2027, with the option to extend the contract by another year.
{Australian company} Liontown Resources (ASX:[LTR] is [set to supply Tesla] with lithium spodumene concentrate from its AU$473 million Kathleen Valley project. The deal is for an initial five year period set to begin this year, and production began in [July 2024]. https://www.nasdaq.com/articles/where-does-tesla-get-its-lithium
Finally,
* 4th straight quarter for record powerwall deployments.
90% of the company is cars. The rest is a sideshow. Maybe they will become important in the future, but for now the company lives and dies on cars, and that part is not going so well.
Maybe Elon is right. Maybe being an absentee work-from-home employee isnāt such a great idea, even for a CEO?
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Hi GoofyHoofy,
I appreciate what you wrote about the supplychain, above.
Regarding your question about why I wrote that there is $Bs being spent to slow the transition from a petroleum based economy, having watched dozens of full length interviews only to be reported later as factually the opposite of what was said leads me to follow the money that pays for those reports. You are correct, of course, there are no advertisements overtly telling people to not to buy Teslaās. However, Tesla clearly is the BEV targeted, in the multiple daily false reports 
, given by the media. And no Iām not going bother detailing this. Iām not trying to sell anything. I rarely if ever post here. Iām only trying to respectfully explain, given your thoughtful response above.
Best,
Jason
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