Tesla Q3 2025 Earnings Call and Webcast

Summary

Tesla held its Q3 2025 earnings call highlighting record financial performance with $4 billion in free cash flow and strong delivery growth across all regions. CEO Elon Musk emphasized Tesla's leadership in real-world AI and announced plans to remove safety drivers from robotaxi operations in Austin by year-end, with expansion to 8-10 metro areas. The company has accumulated 6 billion miles of supervised FSD data and expects significant demand increases as the technology improves. Musk detailed the upcoming AI5 chip, claiming 40x performance improvement over AI4, with production planned at both Samsung and TSMC facilities in the US. Tesla targets expanding vehicle production to 3 million units within 24 months, driven by confidence in achieving unsupervised full self-driving capabilities. The CyberCab, optimized for autonomy without steering wheel or pedals, is scheduled for Q2 2026 production. The company is also advancing its Optimus humanoid robot program, with production targeted for late 2025 and a prototype demonstration planned for Q1 2026. Musk emphasized the manufacturing challenges, particularly in developing dexterous hands, and Tesla's unique position with real-world AI, manufacturing capabilities, and vertical integration. The energy storage business achieved record results despite tariff headwinds exceeding $400 million. Tesla is also seeking shareholder approval for Musk's compensation package and board elections, with Musk expressing concerns about maintaining sufficient voting control over the company's AI and robotics developments. The call concluded with emphasis on Tesla's mission of 'sustainable abundance' through AI and robotics technologies.

Key Points

• Tesla achieved record Q3 deliveries, revenues, and free cash flow of $4 billion
• Company expects to remove safety drivers from robotaxi operations in Austin by end of year
• Full Self-Driving (FSD) has accumulated 6 billion miles of supervised driving data
• AI5 chip in development claims to be 40x better than AI4 by some metrics
• Optimus humanoid robot production targeted for end of 2025, with Q1 prototype showcase
• Energy storage business hit record deployments and margins despite tariff headwinds
• Tesla operates robotaxi services in Austin and Bay Area, expanding to 8-10 metro areas
• CyberCab production scheduled to begin Q2 2026, optimized for full autonomy

Action Items

• Prepare production-intent Optimus prototype for Q1 2026 demonstration
• Continue FSD v14 development and release v14.2 for improved comfort
• Develop FSD v14 Lite version for Hardware 3 vehicles by Q2 2026
• Expand robotaxi operations to Nevada, Florida, and Arizona by year-end
• Begin CyberCab production in Q2 2026
• Ramp Megapack production at Shanghai factory to avoid tariffs
• Scale AI5 chip production with both Samsung and TSMC facilities

Decisions

• Focus both Samsung and TSMC on AI5 chip production initially
• Expand Tesla vehicle production as fast as possible given FSD confidence
• Continue cautious robotaxi deployment approach with safety drivers in new markets
• Pursue vertical integration for Optimus manufacturing due to lack of supply chain
• Target annualized vehicle production rate of 3 million within 24 months
• Increase CapEx substantially in 2026 for next growth phase

Participants