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Tesla & Elon Musk’s Exceptional Q1 Earnings Call Triggers a Tesla Short Squeeze – Tesla Stock Up 13% (Up $50 Billion) – “CyberCab,” 50,000 Cybertrucks, New Vehicles, Ride-Hailing

Following an exceptional earnings call, Tesla's value has increased by $50 billion in a single day. Tesla’s one-day increase is equivalent to Ford & GM’s entire market capitalization. Here are the highlights of the earnings call and ensuing short squeeze.
Tesla Gigafactory

From its peak in November 2021, Tesla’s market cap has fallen by a whopping $750 billion. In other words, Tesla has lost nearly two-thirds of its value in the past two and a half years.

The fall in Tesla’s stock price has accelerated in the past few weeks as the EV maker announced a massive 20% decline in deliveries for the year's first quarter.

Yesterday, before the earnings call, Tesla’s stock closed at $144 a share, significantly lower than its highest price of $407.

After hours, in line with earlier communicated delivery numbers, Tesla posted one of the company’s worst quarterly financial performances in the past five years.

Tesla revealed that the company’s free cash flow decreased by a whopping $2.5 billion. This decrease was mainly driven by an increase in vehicle inventory, which was equivalent to $2.5 billion.

Tesla’s earnings were starting to look gloomy and doomy. However, this is where the bad news ends, and all the good news starts. First, explaining the rise in inventory vehicles, Tesla revealed that this line item was affected by several one-time headwinds.

Related News: Elon Musk Defends Tesla’s Recent Massive FSD Price Cuts Against Suggestions “A Monkey Can Come Up With a Better Pricing Strategy” – Musk Says “Only a Fool Thinks the MSRP is the Real Price”

Tesla revealed that an earlier arson attack on Giga Berlin, retooling for the refreshed Model 3 at the Fremont factory, and the Red Sea conflict that disrupted Tesla’s supply chain were to blame for Tesla’s subpar deliveries and financial performance.

In addition to explaining some of the one-time issues in this quarter, in the company’s earnings report and following the earnings call, Tesla and Elon Musk painted a rosy future for the EV maker that investors absolutely loved.

Here are the main highlights of the earnings call…

  • New, cheaper vehicles built with a combination of Model 3/Y platform and next-generation platform to start production in late 2024
  • Tesla already has the installed capacity to produce 3 million cars a year, which will be met using the new vehicles.
  • Cybertruck production has reached a run rate of 50,000 trucks per year
  • Tesla's company-wide restructuring will save the company more than $1 billion
  • Elon Musk unveils “CyberCab,” reiterates robotaxi unveiling in August, 
  • FSD progress, Doubled AI training capacity in a single quarter, & FSD computer HW 5
  • Tesla Teases an upcoming ride-hailing service and gives a preview of the company’s forthcoming ride-sharing app

New Cheaper Vehicles Coming in Late 2024

One of the biggest announcements during the Q2 earnings call is that Tesla is working on several new vehicles. Inside the shareholder deck, Tesla wrote…

“We have updated our future vehicle line-up to accelerate the launch of new models ahead of our previously communicated start of production in the second half of 2025. These new vehicles, including more affordable models, will utilize aspects of the next generation platform as well as aspects of our current platforms and will be able to be produced on the same manufacturing lines as our current vehicle line-up.”

Although he stopped short of revealing the upcoming vehicles, during the earnings call, Elon Musk confirmed that these new vehicles could start production as early as late 2024 or early 2025.

Details about the upcoming vehicles are scarce; however, Elon Musk elaborated that the new vehicles will be cheaper and will utilize a mix of the Model 3/Y platform and Tesla’s next-generation platform to get to market quickly.

Tesla can grow its annual production to 3 million vehicles using existing factories

Another shock from the Q1 earnings report is that Tesla can build 3 million vehicles annually by simply expanding production in its current factories.

In 2023, Tesla delivered a record 1.8 million vehicles. However, the EV maker has revealed that the current factories can be expanded to increase that number by more than 50%.

Tesla says the additional 1.2 million vehicles per year will be made up of the new vehicles built on a combination of the Model 3/Model Y platform and the next-generation vehicle platform. Tesla explaining this change of strategy, writes…

“This update may result in less cost reduction than expected but enables us to grow our vehicle volumes prudently and more capex-efficiently during uncertain times. This would help us fully utilize our expected maximum capacity of nearly three million vehicles, enabling more than 50% growth over 2023 production before investing in new manufacturing lines.”

Cybertruck production ramp update

Recently, a scary flaw in the Cybertruck accelerator pedal that can leave the truck stuck at full power caused Tesla to temporarily halt Cybertruck deliveries. In the days after Tesla stopped Cybertruck deliveries, over 900 Cybertrucks were seen pilled up at Giga Texas.

Tesla has recalled 3,800 cyber trucks currently in customers' hands, and the EV maker is at present rolling out a simple fix that addresses the issue in less than 30 seconds.

The unexpectedly high number of Cybertrucks seen at Giga Texas was a headscratcher at the time; however, last night, Tesla officially revealed that the EV maker was able to produce 1000 Cybertrucks in a single week.

If Tesla can keep up this number throughout the year, the EV maker will reach a production run rate of 50,000 Cybertrucks annually. Tesla’s current Cybertruck production run rate is 25% of the way from the company’s planned peak production rate of 250,000 Cybertrucks per year.

Tesla restructuring

After publishing the subpar vehicle deliveries in the first quarter, Tesla decided to fire more than 10% of its workforce globally in a single day. This is despite several Tesla investors blaming Elon Musk’s online antics for damaging Tesla’s brand and causing a decrease in Tesla's sales.

At the time, Musk harshly responded to these suggestions, even resorting to sling slurs at investors pushing this narrative.

The massive layoffs were also preceded by recently fired Tesla executives airing their dirty laundry in public. The executives criticized Elon Musk, even going so far as to call the Tesla founder “a pigeon CEO.”

However, Tesla says that after laying off 15,000 employees, it expects to save more than a billion in 2024 directly from this move.

Tesla “CyberCab” 

During the Q1 earnings call, Elon Musk revealed the name of the upcoming purpose-built robotaxi that is expected to eliminate the steering wheel and pedals. Musk called this upcoming vehicle the Tesla “CyberCab.”

The CyberCab name gives us a hint that the upcoming robotaxi will borrow some design cues from the Cybertruck.

Also, to be clear, Tesla separated the CybertCab from the upcoming new vehicles, stating, “Our purpose-built robotaxi product will continue to pursue a revolutionary “unboxed” manufacturing strategy.”

This means that the CyberCab, unlike the new vehicles that will start production at the end of the year, will be built entirely using Tesla’s next-generation platform.

Tesla says the 3rd generation platform will usher in a new era of vehicle manufacturing by completely rethinking how vehicles are assembled.

Tesla FSD, AI training Compute, & FSD Hardware 5.0

Currently, AI is all the rage in the stock market. Companies positioned to be leaders in the AI race are seeing their share prices skyrocket, whereas others seen as falling behind are getting punished.

During this earnings call, Tesla revealed that the company was able to more than double its AI training compute capacity only in the first quarter of the year.

Tesla said that AI computing capacity in Q1 2024 reached the equivalent of 38,000 Nvidia H100 chips. The Nvidia H100 chip is widely regarded as the best chip in the market for AI training.

Elon Musk also said that the launch of FSD v12.3 has gotten the company one step closer to achieving level 5 autonomy. Musk revealed that the EV maker already has FSD v12.4 and v12.5 in the pipeline, which should significantly improve FSD's capability.

Musk also added that Tesla has rolled out FSD v12 to 1.8 million vehicles in the US and that half of those individuals have started using the software. Tesla revealed that the number of miles driven on FSD has already surpassed 1.25 billion.

Finally, Musk added that Tesla has already finished work on Tesla’s next-generation in-vehicle AI inference computer. Musk says this chip, FSD Hardware 5, will start rolling out next year.

Tesla Ride-Hailing Service

If you think Tesla’s AI and self-driving promise is still far off, in a surprise move, the EV maker showed off a teaser of its upcoming ride-hailing app with a sleek, futuristic interface.

Although Tesla did not outright confirm it, the EV maker kept the possibility open that it could launch a human-driven ride-hailing service until full autonomy is achieved.

During the earnings call, Musk, explaining this service, said it would be something like Uber and Airbnb combined.

Other highlights from the earnings call

In response to an analyst's question, Elon Musk reiterated that despite running multiple companies, his focus remains primarily on Tesla.

Musk said he had no plans to leave the company and would “make sure Tesla is prosperous.”

Overall, Tesla’s Q1 earnings call was exceptionally positive, and it appears that it has set off a chain of events that drove the stock price high.

This morning, Tesla's stock opened up by a massive 13%. To put this number into perspective, Tesla’s market cap is up by more than $50 billion following this earnings report.

For comparison, Ford and GM’s market caps are around $50 billion each. The exceptional performance of Elon Musk and Tesla executives during the Q1 earnings call has grown Tesla’s value more than Ford or GM’s market cap in a single day.

When stocks increase in value this high in a single day, it is usually due to a short squeeze. If you are unfamiliar, shorting a company entails borrowing a company’s stock and selling it in the hopes that the stock price will decrease and you can repurchase it cheaper later.

However, if shares of a company go up sharply while someone is shorting it, he/she will be forced to buy the stock and return it to the lender.

This forces several short sellers to buy back the stock at once, and the increased demand will further drive the stock price up, forcing more short sellers to cover, causing a self-propagating avalanche that wipes out short sellers.

It’s challenging to definitively state that a Tesla short squeeze is ongoing; however, if the EV maker’s up equivalent to the entire market cap of Ford and GM in a single, we can at least be sure several Tesla short sellers are unhappy as we speak.

Today appears to be a great day for long-term Tesla shareholders, and we will be sure to keep you posted on Tesla’s share price, upcoming new vehicles, and execution of the company’s plans. 

Until then, visit our site, torquenews.com/Tesla, regularly for the latest updates.

So, what do you think? Are you surprised to see Tesla’s stock price go up this high following the earnings call? What were the highlights of Tesla’s Q1 earnings in your opinion?  Let us know your thoughts in the comments below.

Image: Courtesy of Tesla, inc.

For more information,  check out: First Tesla Cybertruck Crash With a Semi-Trailer Leaves the Cybertruck Mangled – A Painful Video Shows the Cybertruck Reach the Limits of Its Indestructibility

Tinsae Aregay has been following Tesla and The evolution of the EV space on a daily basis for several years. He covers everything about Tesla, from the cars to Elon Musk, the energy business, and autonomy. Follow Tinsae on Twitter at @TinsaeAregay for daily Tesla news.

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