Elon Musk stated on Tesla’s earnings call that the EV manufacturer is in talks with a “major OEM” to license FSD software despite the fact that Q3 output may slightly decline.
After the electric vehicle manufacturer posted a revenue and earnings beat but margins that came in below estimates, Tesla shares (TSLA) fell 9.7% on Thursday, its worst day since April.
Elon Musk Optimistic Despite Short-Term Challenges
Elon Musk, the CEO of Tesla, also hinted that third-quarter output might be slightly lower.
We’re still shooting for 1.8 million vehicle deliveries this year, but we anticipate that Q3 production will be a little bit lower due to summer factory shutdowns.
Musk predicted that there would likely be a small drop in Q3 production due to the global factory upgrades.
Tesla’s widely monitored gross margins for the second quarter came in at 18.2%, falling short of analyst projections of 18.8%.
Additionally, Tesla’s operating margin dropped below 10% to 9.6%, which is precisely 4.93 basis points, or nearly 5%, below where it was a year ago.
The short-term variations in profitability and gross margin are very insignificant when compared to the bigger picture.
Musk noted during the Q&A segment of the call that autonomy will make all of these figures look ridiculous, adding later that it does make sense to forgo margins in favor of producing more vehicles.
Tesla stock had increased by more than 130% in 2023 before the company’s results were released on Wednesday.
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Tesla In Talks To License Full-Self-Driving Software
Gigafactory near Austin, Texas, where initial manufacturing and customer deliveries are expected to start later this year, is where Tesla said it was installing the Cyber Truck technology.
Regarding additional services, Musk disclosed that Tesla currently has more than 5,000 stations and close to 50,000 Supercharger connectors worldwide.
Musk also revealed that his business is in preliminary talks to license its full-self-driving (FSD) software with a significant OEM.
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