Tesla: What Now...
Overall Thesis
Earnings beat (41c EPS), energy gross margin ~40%, FSD take-rate jumped to 14% from 1.5% — exponential. The Terafab + $25B capex reset is pandemic-sized investment for the 2030+ scale (5M+ vehicles + 1M Optimus) — supply-chain secure-now-or-lose-later decision. Short-term investors who want cash flow this year should move on. Long-term (2030+) the path is clearer than ever.
Narratives
Q1 beat (41c EPS, energy gross margin ~40%), FSD take rate up from 1.5% → 14% QoQ — exponential inflection. Short-term cash flow goes negative as Tesla pours $25B+ capex into Terafab + chip capacity for the 2030+ scale (10M+ Optimus target, cyber cab scale). The long game requires making the chip investment now; later is too late to catch the supply curve. Long-term bull thesis intact, near-term headline pain expected.
Key Arguments
- FSD take rate: 1.5% → 14% QoQ — exponential curve, before Europe and China open up
- Auto backlog largest in company history per CFO
- Energy gross margin ~40% despite 33% sequential deployment drop; 2026 deployment > 2025
- Optimus factories: Giga Texas (10M/yr target) breaking ground now; Fremont (1M/yr) starts this summer
- Terafab + chip capacity thesis: making the hard supply-chain investment now is what enables 50M+ bots per year by 2035-40
- $45B cash cushion supports a year of negative cash flow comfortably (ends at ~$33B)
Hedges & Caveats
- Hardware 3 FSD customers need hardware 4 upgrades to reach unsupervised
- Negative cash flow for the next ~year — won't be attractive to short-term holders
- Robotaxi commentary subdued; 12 cities by EOY