Tesla plans to start making a dedicated Robotaxi with no steering wheels or pedals from 2024, CEO Elon Musk said today after unveiling yet another record net profit of $US3.3 billion in the March quarter.
The autonomous rideshare service will cost about as much to ride as much as a subsidised subway ticket, Musk said, also announcing that Tesla will hold a dedicated Robotaxi day will be planned in 2023.
It’s not clear yet if the Robotaxi will be something Tesla customers can buy. As Tesla expands horizontally into other sectors such as insurance, it’s likely it may operate its own rideshare business independent of its car business.
The Tesla Robotaxi will also contain a “number of other innovations” although Musk did not elaborate further.
The Tesla boss said in a recent TedX interview that the Teslabot, which will precede the Robotaxi, is part of a wider plan to solve AI (presumably by busting through development ceilings with a lighter and slower product.)
Rounding up another quarter of record-making profits at the company’s first-quarter earnings call for 2022 on Wednesday (US time), Musk described it as a “challenging but extremely successful quarter.”
Musk also repeated comments to TED boss Chris Anderson: “I’ve never been more optimistic or excited about Tesla’s future than I am right now.”
Despite numerous chip shortages, supply chain challenges and the costs of completing its Texas and Berlin giga-factories, Tesla once again beat analyst expectations, reporting $18.8bn in revenue and carving out a 29.1% GAAP gross margin. Its car business achieved margins of 32 per cent.
Tesla shares jumped 6% in after hours trading upon news of the results, taking its market value back above $US1 trillion.
Production ramp ups and volume
Although the company has had its Shanghai Gigafactory closed for several weeks, and it is now outputting at 33% capacity as the city grapples with another Covid-19 outbreak, Musk thinks the final year results could in fact better than the previous guidance of 50% growth year-on-year.
“We remain confident of a 50% growth in vehicle production in 2022 versus 21. I think we actually have a reasonable shot at a 60% increase over last year,” he said.
Key to this will be the ramp-up of production at the company’s two new gigafactories. While Tesla says it will take until the fourth quarter for ramp inefficiencies to stop sponging up profits, but expects the ramp to be quicker at both factories thanks to learnings from the Shanghai ramp.
Also on a ramp up is production of the 4680 battery cell, which is expected to require 20% less capital expenditure than similar battery programs.
“I think probably it’s fair to say that 4680 and structural pack will be competitive with the best alternatives later this year, and we think we’ll exceed the best alternatives next year.”
Sizeable 2170 cell inventory to support 2022 volumes. 4680 volume production in Q4
— Tesla Ahead of the Curve 🔋⚡️🚘📉📈🇦🇺 (@Ahead_of_Curve) April 20, 2022
Tesla may expand into mining raw materials
Top of mind for some investors and customers is the recent skyrocketing prices of materials to make electric vehicles, which has seen price rises in numerous markets including Australia where the base Model 3 now starts at $63,900.
With wait times for certain vehicles now extending into 2023, Musk attributes the price hikes to future planning for further increases in logistics and material costs.
“We’re obviously not demand-limited, we are production-limited,” he said.
For now, the main limiting factor – other than ramping up production capacity – is lithium, which accounts for 2-3% of battery materials but is by far the largest cost growth. While the company made just shy of 1,000,000 vehicles in 2021, it has plans to make as many as 20 million a year.
Musk hinted that Tesla may expand into mining itself, saying, “we’ll have some exciting announcements in the months to come.”
“Can more people please get into the lithium business. It’s like, do you like minting money. Well, the lithium business is for you.”
With lithium-iron-phosphate batteries now accounting for half of vehicle output, the company says it is also working on the ability to make cathodes from a wide range of materials to be able to respond to market availability.
Fundamental limiting factor: currently lithium We’ll need to help industry in this front. Get into lithium – currently software margins Spot 10x higher than extraction cost i.e. 90% margins
— Tesla Ahead of the Curve 🔋⚡️🚘📉📈🇦🇺 (@Ahead_of_Curve) April 20, 2022
Tesla second-largest insurer in Texas, will expand globally from 2023
Now the second-largest insurer of Tesla cars in Texas, the EV maker has now also expanded its offering into Virginia, Colorado and Oregon. The three new states is under a new model, with Tesla acting as the underwriter but not holding the risk.
While it has to apply for approval to insure on a state-by-state basis, chief financial officer Zach Kirkhorn says the company has goals to expand into 80% of US states by the end of 2022, after which it will turn its eyes to global markets.
Recycling batteries and aluminium wheels of any carmaker
In the meantime, Tesla is recycling materials wherever possible. It is recycling 50 tonnes of batteries a week at its Reno, Nevada operations with plans to ramp this to 150 tonnes, and putting all reclaimed material directly back into its cathode supply chain.
Additionally, Musk says the company is installing massive furnaces at the Texas gigafactory in which it can throw all sorts of used aluminium resources, including “wheels from practically any car.”
“We can take both alumina, both scrap from the casting machine and pick the gating that comes out and put that back. Just really toss that back into the aluminium melting pot. And … also take any stampings and any other aluminium scrap and also throw that in the melting pot,” he said.
Bridie Schmidt is associate editor for The Driven, sister site of Renew Economy. She has been writing about electric vehicles since 2018, and has a keen interest in the role that zero-emissions transport has to play in sustainability. She has participated in podcasts such as Download This Show with Marc Fennell and Shirtloads of Science with Karl Kruszelnicki and is co-organiser of the Northern Rivers Electric Vehicle Forum. Bridie also owns a Tesla Model Y and has it available for hire on evee.com.au.