Introduction
Tesla’s Q1 2025 Earnings Call was a long one, going almost 90 minutes. On the call Tesla leadership discussed a wide variety of topics including autonomy, Optimus, and energy, alongside its financial performance. They reiterated their commitment on bringing out new, low cost models in 2025 and provided more detail on their Unsupervised FSD rollout starting in Austin, TX this June. Here are my raw notes from the call:
Key Notes and Takeaways from Q1 2025
- Elon Musk emphasized Tesla is not in a crisis and is highly optimistic about its future.
- Tesla is continuing to focus on large-scale autonomous vehicles and humanoid robots.
- The company is continuing to localize supply chains to reduce risks from tariffs and geopolitical issues.
- Elon reiterated why he was involved with the Department of Government Efficiency (DOGE) in the first place by saying, “If the ship of America goes down, we all go down with it”.
- From May onward, Elon will shift more focus to Tesla, reducing government-related time.
- Tesla reiterated their commitment to low-cost vehicle models that will begin production in the 1st half of 2025.
- Despite brand damage concerns, Tesla achieved a record number of test drives in Q1 2025.
Autonomy and Cybercab
- Tesla targets a June 2025 robotaxi launch in Austin, starting with Model Y vehicles.
- These robotaxis will use the same Model Y hardware produced today, with no changes for autonomy.
- The Austin robotaxi version of the Model Y will feature audio input, likely via external microphone(s), to handle emergency vehicles.
- Expansion to other US cities is planned by year-end, prioritizing personal use first
- Factory-to-customer Model Y deliveries are slated for the end of 2025
- Large-scale autonomy is expected by mid-to-late 2026, with millions of Teslas fully autonomous by the 2nd half of 2026
- Localized parameter sets may be needed for regions like the snowy Northeast, though a generalized approach persists
- In China, minimal localized data was used, suggesting a mixture of experts for situational parameters.
- The QA fleet in Austin sees few disengagements, but validation requires time and sophisticated simulation to speed up development
- Cybercab is in B sample validation, with major builds scheduled for the end of Q2 2025
- Large-scale manufacturing equipment installation at Giga Texas is set for later this year.
- Full-scale Cybercab production aims to produce one unit every ~5 seconds. This is compared to the industry-leading rate of 1 vehicle every 33 seconds in Giga Shanghai (Model Y).
- Lower-cost models face last-minute issues, with a slower-than-expected ramp using existing lines. Contrary to what the press has been saying, Tesla is fully committed to bringing these new models to market and they are still set to enter production in the next few months.
- These new vehicle models will be available at a noticeably cheaper cost to customer but also help Tesla increase utilization of their existing factories in lines.
Optimus
- Tesla mentioned that they are currently producing a limited number of Optimus robots in their Fremont factory as they perform supply chain & manufacturing optimization.
- The current generation of Optimus appears to be up to v3 which include new hand and shoulder designs.
- Tesla plans to deploy thousands of Optimus robots in its factories by the end of 2025.
- The target is to scale to millions of units annually, possibly hitting a million by 2029 or 2030.
- Supply chain challenges include sourcing rare earth magnets from China for Optimus actuators.
Tesla Semi
- No specific updates on the Tesla Semi were shared during the call.
Energy
- Energy storage hit a record gross profit in Q1 2025, despite fewer deployments.
- Megapack boosts utility energy output by buffering power during low-demand periods.
- The energy business is expected to scale to terawatts per year.
- Tariffs on Chinese LFP battery cells pose challenges, but Tesla is pursuing local US manufacturing and alternative suppliers.
- Elon mentioned their cathode factory & lithium refinery will both open as scheduled in 2025 by saying, “So, like we’re not growing rubber trees and mining iron yet, but we have built a lithium refinery in South Texas, and it’s the biggest lithium refinery outside of China. So, and then we’ve got the cathode refinery in Austin, next to the gig factory. We’re gonna figure out what to do about the anode. This is an ongoing subject of discussion. The best possible worlds would be figuring out how to have no anode.”
Financial
- Auto margins dropped due to lower deliveries, reduced fixed cost absorption, and fewer regulatory credits.
- Operating expenses grew from AI efforts, including Optimus, and vehicle program development.
- Other income fell sharply due to a Bitcoin market-to-market loss and FX remeasurements.
- Regionalization efforts ensure ~85% of US vehicles are USMCA compliant, softening tariff impacts.
- All Model 3 & Model Y battery packs are 100% produced in the United States.
- The full tariff impact on capital investments and supply chains is still under evaluation.
These notes summarize Tesla’s general direction and operational updates from the Q1 2025 Financial Results Call, highlighting their push toward autonomy and resilience amid financial and supply chain challenges.