Tesla Has Something Big About To Happen...
Tesla had a major shutdown in Giga Shanghai this year and Giga Berlin has been dependent on Giga Shanghai for exports. Tesla still earned $1.95 per share for Q2, 2022, and they will have a good quarter for Q3, 2022. What will happen next?
There are a new set of worries concerning China. The U.S. has banned the selling of computer chips from NVIDIA to China. Tesla has a large neural network of NVIDIA chips which is training its full self-driving software.
Tesla isn't directly affected by this NVIDIA ban, but it won't matter what happens anyway. Because Tesla is building its own computer chips, Dojo, in order to train for its FSD software, as well as future AI projects like Tesla Bot.
Tesla has a massive business in China and Tesla is definitely reliant on China for sales and profits. This will be less over time as new giga factories are built and ramp up (Giga Texas and Giga Berlin), and any newly announced factories.
The Big Things About to Happen
Tesla's 4680 batteries ramping is the first big thing that Tesla will do. Tesla says that production ramping is about 35% per month for the 4680 batteries. Tesla wants to get the semi out to customers as fast as possible. The 2170 battery supply has increased greatly due to 3rd party suppliers and this is helping the Model 3 and Model Y. Tesla is enabled to switch the Model Y from 4680 batteries to 2170 batteries with non-structural packs.
Shouldn't Giga Texas be making Model Y vehicles with 4680 batteries? It seems like a waste to put these in the Model Y which can handle the 2170 form factor. The Tesla semi and Cybertruck will need the 4680 batteries in order to ramp up and those projects should use those batteries first.
The good thing is that Tesla has some 4680 battery vehicles on the road already now with the Model Y in Giga Texas and will be able to get validation. The Cybertruck must use the 4680 batteries along with the Cybertruck in order to get the performance and range needed.
The 4680 batteries don't have any silicon in the earliest versions. Silicon is used to increase energy density and can store 10 times the energy of graphite. But the longevity isn't as much and there is more battery degradation. The Tesla semi will need Tesla's best batteries for range and power.
Tesla is also working on FSD to be at wide release this year. This is the second big thing that most people are sleeping on. When Tesla starts to make robotaxi vehicles and they start driving people around, this is going to boost Tesla and the value of the business. Tesla has a deferred revenue of about $1 billion for FSD. Tesla's price increase shows that this revenue could be recognized as milestones related to FSD are achieved.
The third big thing is Tesla's earnings. People aren't impressed with Tesla's Q2, 2022 financial reports. Tesla delivered 254,000 last quarter and that is an impressive number. Tesla delivered 310,000 in Q1, 2022. Keep in mind, Giga Shanghai was shut down for a month... Tesla made 98% more money from a year ago with just 25% more vehicles delivered from a year ago. Higher prices affected this, along with more Model X and Model S vehicles. Tesla's expenses only increased 13%.
Tesla is going to surprise with its strong growth in the next two quarters this year. Be prepared for outstanding numbers.
What do you think Tesla will do in Q3 and Q4, 2022 for its financial statements?
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Jeremy Johnson is a Tesla investor and supporter. He first invested in Tesla in 2017 after years of following Elon Musk and admiring his work ethic and intelligence. Since then, he's become a Tesla bull, covering anything about Tesla he can find, while also dabbling in other electric vehicle companies. Jeremy covers Tesla developments at Torque News. You can follow him on Twitter or LinkedIn to stay in touch and follow his Tesla news coverage on Torque News.