Key Notes and Takeaways From 2024
- Record Deliveries: Tesla set a new record for vehicle deliveries in Q4 2024, achieving an annualized rate close to 2 million vehicles. This was attributed to excellent work by the Tesla team in production and delivery management.
- Model Y Dominance: The Model Y was declared the best-selling vehicle globally in 2024, surpassing all other vehicles, not just EVs, highlighting Tesla’s market penetration.
- Autonomy Ambitions: Elon Musk stressed Tesla’s commitment to autonomy, predicting significant advancements in unsupervised Full Self-Driving (FSD) technology, with a planned launch in Austin in June 2025.
- Optimus Development: Tesla is rapidly developing Optimus, with plans to produce several thousand units for internal use by the end of 2025. The long-term vision sees Optimus contributing over $1 trillion in revenue.
- Energy Storage Growth: Tesla is expanding its energy storage capabilities with new factories, emphasizing the role of storage in enhancing grid efficiency and meeting future demand.
- Financial Performance: Despite challenges like lower ASPs due to discounts and financing options, Tesla grew both its auto and energy storage volumes, focusing on inventory reduction and cost per vehicle.
Autonomy
- Starting with Austin in June 2025, Tesla aims to expand unsupervised FSD to multiple US cities by the end of the year, with plans for nationwide deployment in 2026.
- Safety Standards: The focus is on ensuring FSD is much safer than human drivers, addressing the high visibility of autonomous vehicle accidents.
- Several major automotive companies are interested in licensing Tesla’s FSD technology, but Tesla is only considering high-volume partnerships to avoid engineering complexity.
- “We haven’t stopped working on Hardware 3 yet, we are still making software releases, we released the 12.6 release recently which was like it’s like a baby v13, but it’s a significant improvement compared to what they had previously. People are still finding ways to distill larger models into smaller models, so we have not given up on Hardware 3 we still working on it. Just the releases will trail the hardware 4 releases.” -Ashok Elluswamy
- “I think the honest answer is that we’re gonna have to upgrade people’s Hardware 3 computer for those that have bought full self-driving, and that is the honest answer and that’s going to be painful and difficult but we’ll get it done. Now I’m kind of glad that not many people bought the FSD package.” – Elon Musk
- These statements indicate that while HW3 will continue to receive updates, a hardware upgrade will eventually be necessary for feature-complete full self driving.
- “I continue to be amazed by how effective auto regressive transformers are at solving a wide range of problems” -Elon Musk
- V14 of FSD will focus on scaling model size, increasing context length, increase amount of memory (minutes of context for driving), audio inputs to handle emergency vehicles better, corner cases from fleet interventions, scaling training compute, and increasing reinforcement learning objectives.
- Regulatory approval for FSD in different markets, particularly Europe and China, could delay rollouts due to bureaucratic processes or data transfer restrictions.
Optimus
- Tesla aims to produce around 10,000 Optimus robots in 2025 for internal factory use, with external commercial availability potentially starting in late 2026.
- Design and Manufacturing: Optimus’s design is still evolving, requiring simultaneous development of both the robot and its production process, highlighting the complexity of scaling from prototype to mass production.
- Optimus will initially handle mundane, dangerous, or repetitive tasks within Tesla’s factories, with broad applications envisioned in various sectors due to its humanoid form.
Semi
- The factory in Reno for the Tesla Semi is nearing completion, with mechanical installations scheduled for 2025 and mass production expected to ramp up in 2026.
- The Semi’s economic model is based on total cost of ownership, where it promises to be significantly cheaper than traditional diesel alternatives, addressing the driver shortage in logistics.
- Potential for the Semi to generate billions in profit for Tesla once production is fully ramped.
Energy
- With new factories, particularly in Shanghai, Tesla is scaling up energy storage production to meet the rising demand for grid and residential solutions.
- Musk highlighted how energy storage can almost double the effective capacity of existing power grids by storing energy during low demand periods.
- Despite being a premium product, Tesla remains committed to solar roofs, shifting strategy towards leveraging certified installers rather than direct installations.
Financial
- Q4 saw aggressive inventory reduction, leading to lower ASPs but also achieving the lowest inventory levels in two years, with a focus on cost reduction despite increased production costs.
- 2025 capex is expected to remain flat, with significant investments in AI and manufacturing infrastructure, like the Cortex training cluster.
- Musk emphasized the need for the US to make manufacturing appealing to retain and attract talent, reflecting on Tesla’s efforts to ensure manufacturing resilience amidst global tensions.