One of the biggest pieces of news from the earnings call is that they're planning on supplying batteries/powertrains to other carmakers.
That's a great idea for several reasons:
1) Of all parts of the car (ignoring autonomy-related stuff), Tesla is best at the battery and powertrain. They have a sizable efficiency advantage compared to almost anyone else. By supplying this key part, they should be able to maximize the value of this advantage. Other carmakers are probably better at super high luxury interiors or low cost interiors (although Tesla has interesting ideas and a nice aesthetic--which is subjective and thus could limit their demand, which this move avoids).
2) It indirectly gives them access to more EV credits. Tesla's credits are all but expired in the US. They will be all gone after Q4. So they'd be at a huge disadvantage to a company like VW who owns a bunch of "manufacturers" which each have access to their own set of EV credits but could use a common powertrain platform. By providing powertrains to other car companies, they can indirectly pull kind of the same trick.
3) It means they can make them compatible with the Supercharger network, thus spreading the cost of developing and expanding that network over more companies and giving them an economy of scale. At a large enough scale and serving other carmakers, they could actually make some money this way.
4) It allows them to focus on automating this aspect of electric car manufacturing. Their sizable R&D budget for powertrain can now access tens of millions of vehicles per year instead of just a few hundred thousand vehicles. It also maximizes the benefit of streamlining cell production and bringing it in-house (although I think it's possible Tesla may keep the higher performance cells for their own vehicles and use Panasonic or LG Chem cells for 3rd party vehicles, like they've done with Powerwall and are doing with Shanghai Model 3). Fully automating production of the powertrain/battery would become far more plausible at two orders of magnitude greater scale.
5) Allows them to make the biggest impact on climate emissions as fast as possible. Scaling up carmaking is hard. Focusing on the battery and powertrain is something they're already good at and can significantly help reduce global emissions.
6) Allows them to decarbonize their service vehicles and other logistics vehicles (perhaps even mining equipment), making a better argument about how their embodied emissions are actually very low (and falling).
7) It also helps other carmakers which helps Tesla curry social and political support (instead of the "Tesla vs the World" status they currently seem to have).
They provided powertrains/batteries to other companies in the past, like the Smart car or Toyota's electric Rav4. Back when it looked like Tesla might be in financial trouble, I considered this strategy as a significant backstop in case things went south. But deploying it now is probably an even better idea, now that they've scaled up to the point that they've used up all their EV credits.
That's a great idea for several reasons:
1) Of all parts of the car (ignoring autonomy-related stuff), Tesla is best at the battery and powertrain. They have a sizable efficiency advantage compared to almost anyone else. By supplying this key part, they should be able to maximize the value of this advantage. Other carmakers are probably better at super high luxury interiors or low cost interiors (although Tesla has interesting ideas and a nice aesthetic--which is subjective and thus could limit their demand, which this move avoids).
2) It indirectly gives them access to more EV credits. Tesla's credits are all but expired in the US. They will be all gone after Q4. So they'd be at a huge disadvantage to a company like VW who owns a bunch of "manufacturers" which each have access to their own set of EV credits but could use a common powertrain platform. By providing powertrains to other car companies, they can indirectly pull kind of the same trick.
3) It means they can make them compatible with the Supercharger network, thus spreading the cost of developing and expanding that network over more companies and giving them an economy of scale. At a large enough scale and serving other carmakers, they could actually make some money this way.
4) It allows them to focus on automating this aspect of electric car manufacturing. Their sizable R&D budget for powertrain can now access tens of millions of vehicles per year instead of just a few hundred thousand vehicles. It also maximizes the benefit of streamlining cell production and bringing it in-house (although I think it's possible Tesla may keep the higher performance cells for their own vehicles and use Panasonic or LG Chem cells for 3rd party vehicles, like they've done with Powerwall and are doing with Shanghai Model 3). Fully automating production of the powertrain/battery would become far more plausible at two orders of magnitude greater scale.
5) Allows them to make the biggest impact on climate emissions as fast as possible. Scaling up carmaking is hard. Focusing on the battery and powertrain is something they're already good at and can significantly help reduce global emissions.
6) Allows them to decarbonize their service vehicles and other logistics vehicles (perhaps even mining equipment), making a better argument about how their embodied emissions are actually very low (and falling).
7) It also helps other carmakers which helps Tesla curry social and political support (instead of the "Tesla vs the World" status they currently seem to have).
They provided powertrains/batteries to other companies in the past, like the Smart car or Toyota's electric Rav4. Back when it looked like Tesla might be in financial trouble, I considered this strategy as a significant backstop in case things went south. But deploying it now is probably an even better idea, now that they've scaled up to the point that they've used up all their EV credits.