Starting a business can be overwhelming. You're juggling multiple roles, designer, marketer, logistics manager, all while bringing your vision to life. Shopify helps millions of business sell online. Build fast with templates and AI descriptions and photos, inventory and shipping. Sign up for your one euro per month trial and start selling today at shopify.nl. That's shopify.nl. It's time to see what you can accomplish with Shopify by your side. hey everybody i'm zach and i'm jesse you're watching tesla time news episode 614 well it's been a good run jess but the tesla q1 2026 earnings call i got well i guess it's over Yeah, I mean, just just look at these headlines. Oh, my goodness. What is happening? Oh, my. I mean, we know why the media does this, right? Every Tesla earnings call, they find something negative to spin as much as they can. So, yes, Tesla's energy division, mega packs and power walls were down in deployments and revenue was down 12 percent year over year to $32.4 billion. So I guess we've got to pack it up. That's the end of the show. Right. I mean, that thing that we never talk about. I'm sorry, the thing that the media never talks about, Tesla's battery division. All of a sudden, they want to talk about it as soon as it's one of the only things that they're actually losing. Well, they're not losing money on that they had any bad news about at all. Also, yes, vehicle deliveries were down quarter over quarter, but we're up year over year because that's the more important thing since nobody buys cars in January. And as per usual, Tesla spent a lot of money on building out factories and AI training centers and building new factory lines, 2.4 billion in Q1. But because cash flow continues to be positive. Yeah. At 1.4 billion dollars of free cash flow this quarter, Tesla continues to grow their free cash by 700 million this quarter. So that means they're now sitting on 44.7 billion dollars of cash, of cash, of cash, of cash, big pile of cash. It's just other car companies have debt. Yes. They don't have cash. They have debt. I mean, they have cash like in the bank, but like they have more debt than cash. Exactly. And as we see here with point nine billion dollars of gap operating income, point five billion of gap net income and one point five billion of non gap net income, Tesla was profitable, profitable. So let's go to the opening remarks. Elon said that Tesla will be substantially increasing investments in the future, substantially increasing revenue stream and vehicle production. He said that he expects Optimus to be useful outside of Tesla in 2027. He said again that it will be the biggest product ever. Megapack 3, which I know no one's excited about because it's just a big giant rectangle, but that is going to be produced outside of Houston later this year. New mega factory in Houston is being made. Yes, as we speak. So version 14.3 FSD, which is rolling out to everybody right now. He basically said that that is the whole pipeline for FSD that will lead to unsupervised FSD. Now, version 15 should be out at the end of this year or early next year. He said this is a whole overhaul. It will run on AI4. So new cars and cars that have been produced since around 2021 that have the AI4 hardware will be able to do full self-driving, period. Full self-driving, unsupervised. Fremont is now preparing to build Optimus later this year. So they're stopping at Model X and Model S production, which will stop completely in May. And then they're gearing up for Optimus. Version 3 of Optimus is almost ready, but he doesn't really want to show it to anyone until they're ready to do production. Because he's like, the competitors just zoom in on each frame by frame and they copy us. And I don't blame them. I don't blame them either. The Tesla team is now discussing Dojo 3. That's very exciting. Even though, again, no one seems to understand what that means. But that is the training that is so important for all this. And they're finalizing plans for the research chip fab, which is being built on the Giga Texas campus. That will start construction. Starting a business can be overwhelming. You're juggling multiple roles, designer, marketer, logistics manager, all while bringing your vision to life. Shopify helps millions of business sell online. Build fast with templates and AI descriptions and photos, inventory and shipping. Sign up for your one euro per month trial and start selling today at Shopify.nl. That's Shopify.nl. It's time to see what you can accomplish with Shopify by your side. This year. Now, the CFO pointed out that even though sales of EVs in Europe have been down in Q1, growth Q over Q has been phenomenal in France and Germany, 150% growth. And auto margins are up from 17.9% to 19.2%, something that analysts used to spend a lot of time talking about when they were dipping. FSD adoption is also up, 7% up for buying full self-driving, with 1.3 million paid customers globally. And keep in mind when he says globally you can even like use it in Europe yet Well Netherlands The Netherlands That it And he said that FSD is continuing to get more approvals in China and they expecting to get full approval hopefully in Q3 And they for the first time called the vehicles as a delivery mechanism for FSD. They're now talking about it openly that the vehicles don't really matter much. It's FSD that matters. Get it? It's kind of like how they sell you an Xbox so that way they can start to sell you the games for it. Or a printer. And it's to get you the ink. FSD is the ink. So they did talk about the fact that energy deployments are down, but they said they expect 2026 energy deployments to be higher than 2025 when you take the whole year into account, even though Q1 was down 38%. So that's good. They see what the sales logs are. They know what's coming. Right. And these are slow moving things. And, you know, you might have a bunch of projects that just couldn't take place in Q1. That doesn't mean they didn't want to do it. It's just they're waiting on regulatory approval. But unlike a car where it's like, hey, I want to buy a car and I want to pick it up in a week and a half. When you buy a mega pack, you go like, hello, I am a utility and I would like to have a mega CapEx in Q4 of 2027. So they know this stuff's happening. Bitcoin holdings were down 22% quarter over quarter. And just put in context, when Elon said they're going to be spending a lot on CapEx, they expect over the next two years to spend about 25 billion building out factories and stuff. And actually, that's not really out of line of what they normally spend. They normally spend around $2 billion a quarter. So it's not that big an increase. Oh, and they're already placing orders for research fab equipment to go into the new research fab building. So that's really exciting. To start to make chips. So they're going to figure out how to make chips. Exactly. Oh, there's lots of stuff that's exciting about that. So investor question number one, when will Optimus 3 be revealed? When will production start and what's the expected rate and what are the skills? Elon said they're going to push the Optimus 3 unveil closer to production. So probably late July, early August. He says that he doesn't know the Optimus production rate this year. He said that that it's impossible to predict. I mean, essentially, they're ramping up a production line that has never happened before. It's not like a car where you're like, well, we're going to need some tires. Let's go talk to a tire supplier. They need like, oh, I need like an arm motor for a robot that currently does not exist. To answer the question about skills, he said the initial skills will basically be simple factory skills and they'll build up from there. Question number two, what milestones for robotaxi and revenue growth? Elon said that unsupervised FSD should be operating in 12 or so states by the end of this year. And he said it won't be super material to revenue this year, but it will be material next year. When do you expect FSD unsupervised to reach customer cars? And Elon said that he's guessing in the fourth quarter. So big question here that we're going to talk a bit about. How will hardware three cars reach FSD? For those of you who don't know, hardware three is older hardware, and many people are worried that their cars like yours may not be able to drive. What did Elon say? He said that hardware three does not have the capability for unsupervised full self-driving. And why is that? Basically, it has relatively one eighth the memory bandwidth of hardware four and that that is a key element to full self-driving. So what's going to happen to you? He basically said that for customers who bought full self-driving on hardware three. So that is not everyone who has a hardware three car. Because only a small percentage bought it like you did. Those people will get a discounted trade in offer. So that way they could basically buy a new Tesla at a discounted trade in. Okay. But you say you can't upgrade? He said that they're going to have to set up micro factories in major metro areas to replace the cameras and the computer for hardware three cars. How much do you have to pay for that? He did not say in this earnings call that it would be free. He said that they would offer it. I don't. He has said before that it would be free in this earnings call. He didn't say anything about it being free. I hope that it's free. I think it will be. I think that it will be free. He didn't say. And I just want to tell you what he said because we listened to the call. And he did say over time, it'll make sense to convert all hardware three to hardware four. And so, look, there's a lot to unpack here. And it's a big deal because this is the first time that Elon has really clarified some of these details. Details that are not only important for over 4 million Tesla owners, but also to the company itself. All right, let's get into it. All right, so the number of Teslas on the roads is about 9.2 million. That's total Teslas, right? And of those, how many of them are hardware three and how many are hardware four? Hardware three vehicles, about 4.1 million to 4.3 million. Okay. Hardware four vehicles, 4.4 million to 4.6 million. Wow, so like half. I mean, at first glance, it may appear that Tesla has to upgrade over 4 million cars to hardware 4. But not so fast. By Grok's estimates, only about 600,000 to 700,000 were people like you who bought it with FSD. And that's an important distinction because we believe that that's all that Tesla is obligated to upgrade. So not if you've been paying for a subscription. Right. Not if you basically bought a car secondhand from someone who bought full self-driving. Right. That's a big question that nobody knows the answer to. Exactly. But okay, this is still over half a million cars. I mean, how much will it cost to upgrade each one to hardware four? Well, Grok has been very helpful here too. So here's a breakdown of what it estimates. So the hardware four computer, $300 to $600. The hardware four camera suite, $400 to $800. The wiring harness to Yeah but I mean labor labor 500 to a thousand So the total per car estimated by Grock is 1 to 2 with a realistic midpoint around 1,800 to 2,300. So if you multiply that out by, say, 650,000 cars, that would be 1.2 to 1.5 billion dollars. Really? Mm-hmm. It's a lot. Okay. So if Grock's estimates are correct, then Tesla has to eat approximately 1.2 to 1.5 billion dollars total for the 650,000 hardware three cars and 1.5 billion ain't cheap. Oh, you betcha. Yeah. But I think people may be overlooking this. Those cars will now be eligible to run on the Tesla RoboTaxi network. And let's say 50 percent of owners put them on Tesla's network, at least sometimes. That's an extra 350,000 cars, which could help RoboTaxi in dozens of cities. And you know what? We'll be discussing that on Investor Club Bonus Stories today. And we'll be discussing what happens to the remaining 3.5 million hardware three cars. Yeah. So please join us there. And if you haven't joined us on Patreon before, this might be your opportunity to do it. Help support us. And I think you're going to get a lot out of it because you get six bonus stories a week. All right, but let's get back to the earnings call questions. Okay. The next question from say.com was what enabled AI five tape out early and will AI five chips be used for vehicle roadmap? Elon said the team worked incredibly hard every weekend for six months straight, even holidays. So that's how they did it. He said, I expect AI5 for Optimus and the data center. And then he said this big thing, unsupervised FSD can be done with the AI4 chip. So it's not immediately needed in the car. And I think this is great news. He said at some point, the AI5 chip will go in the car, but he said the AI4 is actually getting an upgrade planned. So a newer generation RAM that'll go up to 32 gigs of RAM. So with two of them, you get 64 gigs of RAM, a 10% increase in compute and memory bandwidth. So it'll be called like the AI four plus chip. And that should be coming in mid 2027. That's confusing. It is confusing, but it's good news. It basically means that I think we don't need AI five or AI six chips to get to full self-driving, which is good because so many people who like in my camp who had the hardware three car were like, so then what about everyone with hardware four? Are they going to have to, you know, because obviously more people bought full self-driving with hardware four, would they have to change out all of their computers to hardware five. Sounds like you don't. There was a question about robo taxi strategy for Europe because now Europe is realizing it. It's a thing. And Elon said that they're jumping the gun for talking about European robo taxi. They haven't even gotten full self-driving supervised, fully approved in Europe. And that may take until at least May. He has no idea of the time frame on Europe. Right. They're just so freaking slow. There's the question. Is version 14.3 FSD still the last piece of the puzzle or do we need version 15 for robo taxi? And Elon said that version 14.3 is the last piece for unsupervised FSD. Yeah, he said there's a lot of known architectural improvements that need to take place in the software. So he said it doesn't make sense to launch RoboTaxi until the new software. I know that's confusing. Basically, he's saying 14.3 can do it, but they want to wait until 15 to really do it, is what it sounds like. So they're using 14.3 right now in Austin, Dallas, Texas, San Francisco, but version 15 will be the major upgrade. Sounds like that's coming later this year. And then I think that's when RoboTaxi is going to fly. To be clear, it's version 14.3 variants in Austin, Dallas. So like if you're like, well, why does my car drive like the robo taxis do? It's probably on 0.2 or 0.3 after that. Or basically they've just turned up a couple of confidence sliders. So that way your car, since you have the steering wheel right there, isn't going to make some stupid decision that maybe the robo taxi would have to in order to get out of some certain situation. Really good point. You know what? There's so much more to talk about, but we can't fit it in today's show. So that's going to be over on Patreon bonus stories today. So for as little as a buck a month, you can go get that three times a week. We'll see you there for that. So business owners. Every day, there are thousands more EVs on the road in America. That's right. An estimated 4,000 more EVs driving around every day. Why is this important to you? Well, if you're a landlord, then more and more of your tenants are parking EVs at your buildings. If you're a florist. A restaurateur. An escape the room owner. A dry cleaner. You name it. More and more of your customers are going to be showing up in EVs. You know what your customers would like while they're shopping with you? EV charging. Yep. And you know who installs EV chargers all across America? Smart Charge America. That's right. So here's what you're going to want to do. Go to SmartChargeAmerica.com right now, fill out their quick and easy project form, and then tell them that Zach and Jesse sent you to save 15% off your project. Do it today. Go to SmartChargeAmerica.com and you're going to thank us. And your customers and clients are going to want to thank you. So overall, Q1 was another great quarter for Tesla. The things that analysts don't really talk about, right? Tesla installed AI training capacity and that's going up. Their battery manufacturing continues to grow. Tesla is approaching 10 billion miles of cumulative miles driven with FSD. Cumulative paid robo-taxi miles is growing exponentially. In more and more cities. With Elon aiming for 12 states by the end of this year. And installed annual manufacturing capacity continues to grow nicely around the world. You stay classy, planet Earth. Yeah, so a great quarter. Now, let's go to Patreon bonus story, shall we We are giving away an EVJECT escape connector this month on Patreon This little baby allows you to drive away while charging your EV That right You don have to get out of your car to unplug it in the event the hopefully that never happens event, that something scary happens while you're inside your car playing backgammon or Castle Doombat and then a bear or serial killer or a fire erupts while you're charging. Just hit the stop charging button, then the open charge port button, and then simply drive away. Your escape connector will sacrifice itself for your safety and you'll have a story to tell instead of someone telling a story about you. So go to edject.com and get yours. Use our code NYK to save 50%. Do it now before you forget, and then you can have peace of mind like Zach and I do. All right, we're back from our Patreon bonus stories. Time for the shout outs. Who do we got? We've got Ballsmeyerhans, Donald Morrison, JT, Norton Slovak of the Elon Club, and William Wolff. Thank you so much for supporting us. We can't do this show without you. All right, it's time for Elon's X's of the week. NextBigFuture said Blue Origin New Glenn is likely grounded for four months to investigate the upper stage failure on the weekend. Elon said space is hard. Falcon flies every few days. You can see launches in person from Florida or California. Love how we rubbed that in. The Rabbit Hole said SpaceX has launched more than every other company combined. Elon said it's a start. Vastly more will be needed to extend consciousness to the stars. Elon said SPLC, and that is the Southern Poverty Law Center, funded a large number of false flag right-wing organizations and events. Total scam. Mark Andreessen said the Southern Poverty Law Center was one of the most powerful censorship forces in the country for decades, lavishly supported by many big American companies for many years. This is astonishing and deeply concerning. Elon said 100 percent outrageous. SPLC executives who did this need to go to prison for a long time. And just a reminder, Elon has been known about this for a while. This is what he said last year. The SPLC is an evil organization that spreads hate propaganda relentlessly and needs to be shut down. And the year before that, he said the Southern Poverty Law Center is a criminal organization, in my opinion. Just so that we're all on the same page here. The Southern Poverty Law Center. Yes. Those people that you're thinking of funded. Oh, it was a kind of it was a kind of socialist. Oh, nationalist socialist. Right. Right. They funded them. Real Nazis. Real Nazis. Also the KKK. And the KKK. Oh, and the area. What's the Aryan? Aryan Nation. The Aryan Nation. They fund. I can't believe this. Right. That doesn't seem to. 11 indictments from the federal government. So yeah, Flopper posted, we pay people to be racist so we can fight racism. And Elon said their scam worked for decades. Marc Andreessen said, which other prominent nonprofits and NGOs are doing this? And Elon said many. Now, do you see why so many people were upset about Elon and Doge? Because this is what they were finding out. This is what they were about to uncover. Yeah. Adam said Democrats fought Elon because he was ending their grift. They were getting angry that they could no longer steal from the taxpayers. And Elon said, exactly. Just I just can't I cannot fathom that you have the Southern Poverty Law Center, which came out right and said like Elon is a Nazi, right? They came out and said that when they were supporting literal real Nazis. And the whole reason we have to say real Nazis is because they've been spreading this idea that everyone is a Nazi who doesn't agree with them about literally everything. And the crazy part is this is what the actual Nazis did in the 30s. You're like, How did how did Hitler rise to power? This is part of how they did it. The Nazis burned down the Reichstag. That was the German parliament at the time. And did they say we burned? No, they they lied. They blamed a Dutch communist guy. And so the very next day they got President Hindenburg to sign a decree to suspend all civil liberties, such as freedom of speech and freedom of the press, along with lots of other nasty stuff that they did. So they did it. That was that's called a false flag. That's where you do something and then you blame it on somebody else. You do something awful, like because normally people don't do stuff that's awful. What was the justification for Germany invading Poland? You might go, oh, it's because Hitler said so. No, they made up justifications to get people on board with invading Poland, the German people. They sent in SS groups to attack German positions dressed in Polish uniforms. So if you don't study history, you don't know why Zach and I are like humming along and we're going like, oh, this this rhymes. This rhymes. And we know when the chorus is coming because we're going, oh, oh, it's far. Oh, it's following. It's following this whole thing. The financials came out for the SPLC and Elon said quite the return on investment that the SPLC crime syndicate received. But on a happy note, Elon reposted Tesla saying happy Earth Day. Thank you to our owners, employees and advocates for helping us build a world of amazing abundance. Oh, and then and Wokeness posted each dot represents 100 migrants. This is what an invasion looks like. Elon said that's a lot of illegal immigrants. The drunk Republican said the left quickly realized that if the boogeyman of white supremacy disappeared, so did their power. So they literally funded it. And Elon said, yep. And then he again said that the SPLC is an evil crime syndicate. Wow. Wow. Well, thank you so much for joining us today, everybody. So much more that we have to talk about about the earnings call over on Investor Club and over on Patreon bonus stories. So today might be a great day to join us because we're always giving away fun stuff. We'll see you there today. Now you know.
