Beta Finch - Tesla - TSLA - EN

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**BETA FINCH PODCAST SCRIPT**---ALEX: Welcome to Beta Finch, your AI-powered earnings breakdown. I'm Alex.JORDAN: And I'm Jordan. Today we're diving into Tesla's Q4 2025 earnings call, and folks, this was quite a ride.ALEX: Before we get started, I need to mention that this podcast is AI-generated content for educational and entertainment purposes only. Nothing we discuss should be considered investment advice. Always do your own research and consult a qualified financial advisor before making any investment decisions.JORDAN: Absolutely. Now Alex, where do we even begin with this call? Elon Musk literally opened by changing Tesla's mission statement to "amazing abundance" and talked about universal high income for everyone.ALEX: Right? And then immediately pivoted to announcing they're killing off the Model S and X next quarter. Jordan, let's start with the numbers because there's a lot to unpack here.JORDAN: The financial picture was actually pretty solid despite some challenges. Tesla hit record gross margins at 20.1% - something they haven't achieved in over two years. Automotive margins excluding credits improved sequentially from 15.4% to 17.9%, which is impressive given they had 16% lower deliveries in the quarter.ALEX: That margin improvement despite lower volumes tells us a lot about their operational efficiency, doesn't it?JORDAN: Exactly. CFO Vaibhav Taneja explained this was largely due to regional mix - they had proportionally more deliveries in Asia-Pacific and EMEA markets. But here's the kicker - they ended 2025 with a bigger backlog than in recent years, and none of those countries even have the latest FSD version yet.ALEX: Speaking of FSD, the Full Self-Driving adoption numbers were interesting. They hit nearly 1.1 million paid customers globally, with 70% being upfront purchases. But they're transitioning to a subscription-only model going forward.JORDAN: That subscription pivot is huge, Alex. It's going to impact automotive margins in the short term, but it sets them up for recurring revenue. Think Netflix for cars, but instead of entertainment, you're getting autonomous driving.ALEX: And on the autonomy front, they're already running fully unsupervised robotaxis in Austin - no safety monitor, no chase car, just empty cars picking up paying customers.JORDAN: The robotaxi deployment is scaling fast too. Musk said they're "well over 500" vehicles carrying paid customers between Bay Area and Austin, and he expects that to "double every month." Those are some aggressive scaling projections.ALEX: Now let's talk about the elephant in the room - that massive CapEx guidance. They're projecting over $20 billion in capital expenditures for 2026, more than double their previous guidance of $9 billion.JORDAN: This is where it gets wild, Alex. They're building six new factories simultaneously - refinery, LFP factories, CyberCab, Semi, a new mega factory, and that Optimus factory. Plus massive investments in AI compute infrastructure.ALEX: The Optimus story is fascinating. They're literally converting the Model S and X production space in Fremont into a million-unit-per-year robot factory. Musk said Optimus 3 is so human-like that people could easily mistake it for a person.JORDAN: And he's not just talking small numbers here. Long-term, he expects to make "far more CyberCabs than all other vehicles combined" because 90% of miles driven are with one or two passengers. They're essentially redesigning transportation around autonomous two-seaters.ALEX: The CyberCab production starts in April, by the way. No steering wheel, no pedals - it's fully autonomous or it doesn't work. That's a bold statement about their confidence in the technology.JORDAN: But here's what really caught my attention - Musk spending his Saturdays designing the AI5 chip. When the CEO is personally involved in chip architecture on weekends, you know it's critical.ALEX: And he thinks chip supply will be their biggesThis episode includes AI-generated content.