Article: By Jingtao Wu

Is it about determination or just “drawing a big cake”?

On Thursday afternoon, August 4th, Eastern Time, Tesla held its annual shareholder meeting at the super factory in Austin, Texas.

Undoubtedly, the most eye-catching and newsworthy content of the meeting was the statement made by Tesla CEO, Elon Musk: “I’d be surprised if we’re not producing more than a hundred million vehicles in, let’s say 10 years.”

This statement quickly became the focus of media coverage both at home and abroad. However, in fact, the amount of information revealed by Musk during the meeting covered a wide range of topics from corporate operations and future plans to product updates and pricing.

Today’s article will briefly summarize and categorize the information that is most relevant to us. Let’s take a look at whether the information given by Musk is “abundant and comprehensive” or whether it is just a “big and round” cake he is painting.

Capacity and Layout

Regarding capacity, Musk first reviewed Tesla’s initial stage ten years ago when it only produced about 3,000 cars. Today, this number has exceeded 3 million.

By 2030, Tesla aims to produce 20 million vehicles per year, which is approximate to the total production capacity of Volkswagen and Toyota.

The most impactful news among these is Musk’s statement that in the next ten years, Tesla is confident it will produce accumulatively over a hundred million vehicles.

To achieve this goal, the key task is to increase production capacity, which depends on the quality and quantity of factories. Regarding Tesla’s factory operations and layouts, Musk stated that later this year, Tesla will announce the result of the selection of the newest super factory location. (According to industry insiders, the new factory is most likely to be located in Canada).

Tesla expects that the total number of global super factories will reach 10-12 in the future, and each super factory is expected to have an annual production capacity of 1.5 to 2 million vehicles.

Since 2022, Tesla has already welcomed two super factories in Berlin and Austin.

Elon Musk said, “There will be a healthy competition among the three factories in Austin, Fremont, and Berlin. The Fremont factory has become the highest-capacity factory in North America. But it’s hard to surpass the Shanghai Gigafactory, and we have to admit that the Shanghai team is really outstanding.”

In addition to gradually increasing production capacity and ramping up new factories, upgrading technology is also an important means to increase production. With the benefit of an integrated die-casting technology, Tesla’s vehicle manufacturing has achieved a higher degree of simplification.

For example, with the Model Y produced in the Austin factory, previously 171 independent parts have been simplified into two large die-casting parts, reducing over 1600 welds.

At the same time, the number of robots required to produce the Model Y in the Austin and Berlin Gigafactories will be reduced to about half of that in the Fremont factory, where the number of robots required to produce the Model Y will also be about half of that required to produce the Model 3.

Tesla believes that in the long run, production and manufacturing will be its biggest advantage, which is also the core element that makes Tesla difficult to replicate.

The advancement of technology has brought positive help to the increase of production capacity. Regarding vehicle integration technology represented by “integrated die-casting”, we have also conducted a brief analysis of its pros and cons before. Interested friends can take a look at our previous article. “Tesla Model Y Battery Damage Cannot Be Repaired? You Should Know the Pros and Cons of Integration“.

Model Planning

Regarding news related to vehicle models, this shareholder meeting mainly mentioned two models: the Model Y and Cybertruck.

First, regarding the Model Y, Musk said: “In terms of revenue, this year the Model Y has already become Tesla’s highest revenue model. In terms of sales, it is estimated that by the end of next year, the Model Y will be Tesla’s best-selling model.”

In addition, the next-generation 4680 battery production equipment has been installed in the Austin Gigafactory and is currently undergoing debugging, with production capacity continuing to ramp up.# Elon Musk expects Tesla to achieve mass production of new 4680 battery by the end of 2022, which means that Tesla’s new vehicles are expected to be equipped with 4680 batteries on a large scale in 2023.

In terms of performance, the use of the 4680 battery pack with structural battery technology can reduce the weight of the whole vehicle by 10% and increase the range by 16% in Model Y.

Next, let’s talk about the mass production time of Cybertruck, which has been a controversial topic. Elon Musk also gave an answer, saying that Cybertruck will be officially produced in mid-2023. At the same time, Musk also hinted at some news – the configuration and price of the mass-produced Cybertruck will be a little different, which can be roughly understood as “adding money!”

As for the entry-level Model Q that has been widely circulated online, there was no mention of any relevant information at the meeting.

Operation and Development

Regarding the company’s revenue performance, which Tesla fans and investors are concerned about, Musk stated that Tesla has the highest operating profit margin in the entire industry, surpassing traditional automobile giants such as BMW, Daimler, and Ford.

According to Tesla’s Q2 2022 financial report, Tesla achieved an industry-leading operating profit margin of 14.6% this quarter, with positive free cash flow reaching USD 621 million, and has been profitable for 12 consecutive quarters.

At the shareholder meeting, Tesla’s shareholders also approved a stock split plan, splitting Tesla’s stock into three shares, which will reduce Tesla’s stock price to the range of $300.

Tesla subsequently announced that the start date of the split will be Thursday, August 25, 2022, which means that investors can buy stocks at a lower price, thereby attracting individual investors.

Regarding the overall economic situation, Musk also expressed his opinion. He believes that the cost of commodities and Tesla’s components may decrease in the next six months, and existing data indicate that “we have passed the peak of inflation.”Meanwhile, he also predicts that the US will experience a “relatively mild recession” that will last 18 months.

It’s worth noting that Musk has repeatedly stated that Tesla’s current models are priced too high and if inflation stabilizes, Tesla can lower vehicle prices.

On the technical planning front, Tesla released a poster for the second AI Day to be held at the end of September at the shareholders’ meeting. Musk previously stated on social media that Tesla will showcase the latest progress in Optimus robot prototypes, FSD and other products and technologies at this AI Day.

At the meeting, Musk mentioned Optimus robots, believing that they will be more valuable than cars, and in the long run, they will address labor shortages.

At last year’s AI Day, Tesla unveiled its humanoid robot, which stands at 175cm tall, weighs 56kg, can move at a speed of 8km/h, and has a maximum load of 20kg.

As a side note, Musk is quite concerned about population and labor shortages.

He previously stated on social media, “I will do everything I can to help solve the crisis of a population shortage. Collapsing birth rates are the greatest danger humanity has faced so far.“

He believes that too many people are fantasizing about an excess of human population on Earth, but the trend of declining birth rates is very clearly pointing towards a population collapse. Musk has always advocated having more children, and he himself has had many children.

Conclusion

When he was asked about succession-related questions at the shareholders’ meeting, Musk humorously replied, “Even if I am abducted by aliens or returned to my mother planet, Tesla will continue to do well.”

He believes that even without him, Tesla will have a bright future. He then stated that he has no plans to leave Tesla at the moment and will stay as long as he is needed.# Summary of the Shareholders’ Meeting

Apart from the routine “Performance Report” and voting procedures, what we witnessed at this shareholders’ meeting was the confidence and determination of Elon Musk and Tesla, their confidence in the current operational status and product strength of the company, and their determination for future planning and technological development.

Moreover, from Musk’s discussions on the company’s operations, economic environment, and even the rapidly changing international relations, we can feel his cognitive style and some aspects of Tesla’s corporate culture. Therefore, we highly recommend watching the replay of the shareholders’ meeting if you have time on weekends.

To return to the topic, Elon Musk proposed the “visionary plan” of building 10-12 super factories and producing 100 million Tesla models within the next ten years at this meeting, as well as making “short-term commitments” such as lowering the prices of models and mass producing the CyberTruck.

What do you think about the feasibility of these proposals? Feel free to leave a comment and share your thoughts.

This article is a translation by ChatGPT of a Chinese report from 42HOW. If you have any questions about it, please email bd@42how.com.