Tesla, Inc. Q2 FY2025 earnings call

• Robotaxi: Launched in Austin, expanded service area there, expecting to expand further in a couple of weeks, aiming to have autonomous ride-hailing in half the U.S. population by end of year subject to regulatory approvals.
• FSD: Continuing to improve software, expecting to 10x parameter count; sales in Europe and China hampered by lack of supervised FSD approval, but progress being made; autopilot experience to improve as elements from robotaxi in Austin are added back.
• Optimus: Evolving design, Optimus 3 in development, prototypes expected end of this year, production start early next year, with production ramp challenging but aiming for 1 million units a year in less than 5 years.
• Tariffs and legislation: IRA EV credit repeal impacts U.S. vehicle supply this quarter, tariffs increasing costs, BBB affecting solar projects and storage revenue but storage demand growing.
• Automotive portfolio: Entire lineup updated, lower-cost model production ramp delayed to next quarter due to focus on U.S. deliveries before EV credit expiration and new product complexity, FSD adoption increasing in North America.

Automotive: Model Y in June became the best-selling car in Turkey, Netherlands, Switzerland and Austria; globally, there's an increase in test drives. Energy: Megapack capacity expanding quickly, Powerwall deployment had record in Q2. Service and other: Margins improved sequentially, primarily from supercharging and insurance/service center profitability. However, specific absolute financial numbers and revenue contribution percentages weren't detailed in terms of exact figures but focused on business developments.

• Robotaxi: Aim to have autonomous ride-hailing in half the U.S. population by end of year subject to regulatory approvals.
• Optimus: Prototypes of Optimus 3 expected in 3 months, production start early next year, aiming for 1 million units a year in less than 5 years.
• FSD: Expect to have unsupervised FSD available for incentivized personal use by end of this year in certain U.S. geographies.
• Lower-cost models: Production ramp of lower-cost model delayed to next quarter, slower than initially expected.

• Regulatory: Uncertainty in getting approvals for supervised FSD in Europe, China, and other regions.
• Tariffs: Impact on costs, with full impact to be felt in following quarters, and unpredictable environment on tariff front.
• Legislation: BBB elimination of tax credits for solar projects affecting sales pipeline for Megapack, and impact on residential storage business due to early expiration of consumer credits.
• Supply chain: Challenges in production ramp due to unexpected supply chain interruptions or internal process mistakes.

Q: How will the BBB elimination of tax credits for solar projects affect your sales pipeline for Megapack?

A: Michael Snyder said sales pipeline for Megapack is diversified, not heavily weighted in projects paired with solar, storage in data center and stand-alone projects growing, forecasting strong second half of year, investing in U.S. manufacturing to mitigate impacts.