Tesla 2Q15 Earnings Call Notes

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There’s not not a need to raise capital

“I don’t think that there’s not a need to raise equity capital. There may be some value in doing so as a risk reduction measure, but to be clear, we – what Deepak is saying is that even in the absence of any additional capital generation activity, we would have on the order of $1 billion through – basically that would be, our minimum cash position.”

Well over $1B in powerpack reservations already taken

“if you just take the reservations that have been made thus far, it’s well over $1 billion worth of Powerpacks and Powerwalls. So – and that’s with no marketing, no advertising, no sales force to speak of, really, we’re not trying to sell it, it’s basically a presentation and a webcast and 30 minutes of press Q&A.”

Doing our best to make sure Model 3 production doesn’t impact S and X production

“For the Model 3, we really are doing our best to make sure that it does not affect S and X production. We don’t currently anticipate it affecting S and X production in 2016, but there may be some effect in 2017.”

We have to create our own map data for autopilot, we can’t think of another way to do it

“there’s not publicly available data that is sufficiently accurate for Autopilot as far as navigation data, street data, it’s too coarse. So it looks like we don’t really have much choice, but to create our own data set for driving in order to – in the long-term, in order to provide a high quality Autopilot experience. Yeah, I mean, it’s – yeah, that’s just the only way we can think of to do it.”

Stationary storage isn’t just about renewable energy

“It seems like sometimes people link this too much to renewable energy. Of course we’re huge believers in renewal energy, but that is not the gating function of demand for stationary storage. Stationary storage is really as compared to existing power plants.”

The passenger can’t just go away with autopilot. It’s like an airplane

“in the initial Autopilot. The – we don’t want to set the expectation that it’s – that you can just basically pay no attention to what the car is doing, we do want to set the expectation that it’s much like the Autopilot in a plane where you turn the Autopilot on in a plane but there’s still some expectation that the pilot will pay attention to what the plane is doing and weren’t sort of go to sleep or disappear from the cockpit. So we do want to set that expectation with consumers.”

Autopilot is very strong right now when you have a tracking vehicle in front of you

“it’s capability in steering and control of acceleration and braking is excellent. When it has a tracking vehicle in front and you can basically have high confidence in steering, braking, and acceleration when basically when you’re in some kind of traffic situation where there’s a car on the road in front of you. I think it’s pretty good in the absence of that, so if it’s just lanes, it’s pretty good, and it will get better over time as we refine the software. So I would certainly not take the initial version of Autopilot as the final version. It will just get better and better over time.”

We’re going to try to push production in favor of X because people have been waiting a long time for their cars

“we’re going to try to do is to push the production slightly more in the direction of X because people have been waiting for a long time for their cars. And then, in any given month it could be 60/40 one way or the other. If you look at worldwide demand for SUVs and sedans, it’s almost dead-even, at 50/50”

We have found that we can do even more with the Gigafactory than we thought

“what we have found is, with the Gigafactory, that as we spent more and more time on it, we found we’ve been able to improve the space efficiency of the production and the overall efficiency by more than our initial expectations.”

I am confident that we can produce 500k cars in 2020

” I do remain confident about half a million cars in 2020, and maybe being able to exceed that. It’s worth noting that, so 2020, that’s five years from now. If you go five years in the past for Tesla, we were producing 600 cars per year. Now we can produce 600 cars in three days. So I think going from here to 500,000 cars a year is a much smaller leap than what we did over the past five years.’

To go larger than 500k we’ll need to localize production in other markets

“Long-term, again, we’re getting very speculative here, but in the three to five-year timeframe, it’s going to make sense for us to think about localizing production in different markets, having a factory in Asia, a factory in Europe, other factories in North America. So in order to go beyond the 500,000 units a year, that’s what we would need to do. ”

We’d love for the whole industry to go electric

“what we’ve said is like we’re really excited to see other car companies do electric vehicle programs. What’s been done to-date is not much. They’ve generally been fairly small programs and often just set to achieve a regulatory minimum. So that hasn’t been great thus far, but I’m encouraged by what I see about the future plans, they sound like they’re headed in the right direction and I would be super happy to see the whole industry to go electric.”