Tesla Investor Meeting: New models to be launched in H1 2025, with an annual sales growth target of 20-30%. Computing power to significantly enhance FSD, with no competitors in autonomous driving in Europe and the United States

Recently, as part of Deutsche Bank's Autonomous Driving Day, Deutsche Bank held an investor meeting with Tesla's Head of Investor Relations, Travis Axelrod.

The meeting focused on Tesla's Full Self-Driving (FSD), robotaxi, and Optimus, while also discussing the status of new models in 2025 and the positive and negative impacts on profit margins.

After the meeting, Deutsche Bank raised Tesla's target stock price from $295 to $370, primarily reflecting a higher valuation of Tesla's autonomous driving efforts. Since the beginning of the year, Tesla's stock price has risen by 57%.

Deutsche Bank summarized the key points of this investor meeting in the report:

New models to be launched in the first half of next year, with a sales growth target of 20-30% for the year

New model release plan: Tesla plans to launch a new model named "Model Q" in the first half of 2025, with a post-subsidy price of under $30,000, which means a price of $37,499 if the U.S. electric vehicle tax credit policy is canceled. In the second half of 2025, Tesla also plans to launch other new models to expand its potential market size. It is speculated that one of these may be a three-row long-wheelbase Model Y variant launched in China.

Capacity growth: All these new models will be manufactured on existing production lines. Tesla reiterated that the sales growth target for 2025 is 20-30%, and this growth range is based on the ability to maximize existing capacity utilization.

Supply chain and capacity: Tesla stated that to achieve the upper end of the growth range, flawless execution is essentially required, and expressed confidence in the rapid expansion capability of the supply chain in the Chinese market, while it may be more challenging in North America.

Mexico factory plan: Tesla's factory plan in Mexico will continue to depend on geopolitical dynamics and tariff situations under the new Trump administration.

New product launches will disrupt profitability

Product launches and profit margins: Tesla explained that 2025 will be a year of product launches, and whenever this occurs, profitability will be disrupted due to the lower fixed cost absorption efficiency during the early construction phase of the products.

Cost reduction: However, this impact may be offset by the reduction in goods sold costs brought about by more affordable products.

Demand curve and profit margins: The profit margins in 2025 will also depend on the average selling price (ASP) determined by the demand curve.

Growth targets: The main goal is to focus on increasing sales volume and adding additional gross profit, rather than targeting a specific gross margin percentage, with the aim of at least achieving overall free cash flow (FCF) breakeven.

Launch of autonomous taxi operations next year

Autonomous taxi service: Tesla still expects to launch an autonomous taxi service in California and Texas next year using existing vehicles (Model 3/Y), providing paid ride servicesUser Interface and Value Chain: In terms of user interface, the company plans to use an internally developed ride-hailing application and control the "value chain."

Regulatory Challenges: Tesla believes that regulation is the biggest obstacle to the widespread deployment of autonomous driving taxis, and the company hopes to adjust through updates to federal-level rules.

Fleet Adjustment: Management intends to initially use the company's own fleet entirely and eventually adjust supply dynamically based on customer demand/traffic patterns.

The expected cost to build a CyberCab will be less than $30,000

Manufacturing Cost: By adopting a boxless manufacturing process, the expected cost per vehicle is projected to achieve a reduction of about $20,000 to $30,000 at operating rates, which is not achievable under current traditional manufacturing processes.

CyberCab Production: The CyberCab is expected to be the first product using boxless manufacturing when production begins in 2026, and any subsequent products are also expected to use the boxless process.

Production Cost Target: At full production capacity, the company expects the cost to build a CyberCab to be less than $30,000.

Investment in Services and Charging Facilities: With the launch of the CyberCab in 2026, the company will need to invest in its service/cleaning and charging facilities (e.g., installing wireless charging), with Texas and California likely being the first states to roll out such services due to their proximity to manufacturing facilities and headquarters.

Computing Power Drives Significant Improvement in FSD

FSD Version 13: FSD Version 13 has been rolled out to early users, and if no issues are found, it typically takes 2-3 weeks to roll out to a broader audience.

Performance Improvement: This version is expected to demonstrate a performance improvement of 3-5 times compared to v12.5 in terms of critical intervention mileage (approximately once every 10,000 miles).

FSD Unsupervised Version: Management continues to target the launch of the FSD unsupervised version in the second to third quarter of next year, coinciding with the start of autonomous taxi operations.

Training Computing Power Improvement: The significant improvements seen over the past year can be attributed to the increase in training computing power, from 20,000 GPUs to about 90,000 GPUs in just 10 months.

FSD Adoption Rate: Tesla commented that the adoption rate increased after the V12 version was released in North America (over 20%), compared to April of this year, and rose again during the 10/10 event.

No Competitors in Autonomous Driving in Europe and America

U.S./European Competition: Management does not believe there is any real competition in the U.S./Europe from a cost/scale perspective.

Waymo and Cruise: For pure autonomous taxi efforts like Waymo and Cruise, Tesla believes they are essentially using more sensors (e.g., LiDAR) to compensate for the shortcomings of rule-based software.

Data Generation and Scale: Unlike Tesla, which has a large customer fleet to generate sufficient data to effectively train large end-to-end models, Waymo relies on a very small fleet that cannot generate enough dataChina Competition: In China, Tesla has observed more entities adopting a similar end-to-end visual architecture approach.

European Regulatory Challenges: For Europe, the regulations surrounding autonomous driving create a challenging environment, as drivers must approve the vehicle's automated responses, undermining the purpose of autonomous driving capabilities.

Third Generation Dojo Chip: The third generation Dojo chip, expected to launch in 2028, will be another significant driving factor, as the first generation could not compete with Nvidia in terms of cost/performance, and the second generation (2026) still cannot compete in performance (but should achieve cost parity).

Optimus Progress: Over 1,000 Humanoid Robots to be Deployed Internally by 2026

Deployment Goal: The goal is to deploy over 1,000 humanoid robots internally by 2026, and then sell them to external customers.

Optimus Intelligence Development: From a development perspective, the "intelligence" of "Optimus" will continue to improve and should eventually reflect the rapid advancements in FSD over the past year.

Manufacturing Goal: The ambitious target is to reduce the bill of materials (BoM) to around $30,000.

Sales Strategy: When selling to customers, the strategy may be to sell or lease the robots with both hardware and software together.

Others

Megapack Demand: Demand for Megapack remains very strong, and the company maintains its expectation of over 100% growth this year, which translates to about 27 GWh of production.

Legal Litigation: The company believes that the recent court ruling rejecting Musk's compensation plan is incorrect and will appeal the decision, although there is no timeline for the response.

Origin: Wall Street Insight