FSD Beta numbers and everything else revealed at Tesla's Q2 earnings call

Tesla produces its 2 millionth vehicle at Fremont/Nevada

Tesla

Yesterday Tesla held its second quarter earnings call. Although Elon Musk has previously said he wouldn't be on earnings calls in the future, he did make this one.

As with previous earnings calls, plenty of data and statistics were revealed relating to production, future products, and FSD Beta.

Below is a recap of the entire event, including the Q&A session. The recap was originally posted to dburkland.com.

You can also listen to the earnings call below. The call begins at the 11 minute mark.

Opening remarks from Elon Musk

• Unique quarter for Tesla due to Shanghai shutdown
• Production records achieved in Fremont & Shanghai
• Set up nicely for record breaking 2nd half of 2022
• Past years have thrown several force majeure at Tesla yet the team continues to overcome
• Giga Berlin Production Ramp continues with 1000 cars / week in June, Giga Austin to follow with the same number in the next few months
• Still making cars w/ 2170 cells in parallel and important to note they aren’t dependent on 4680s and will still hit their production numbers 
• FSD Beta deployed to over 100,000 owners
• 5-6 years ago they set out to be the best manufacturer in the world
  • Pro-manufacturing mindset has given them a competitive edge
• Currently make the largest castings in the world
• As a result of improved manufacturing processes in Berlin & Texas, Tesla has reduced body welding robot count by 70% per unit of capacity
  • Body shop is roughly 3x smaller as it would be otherwise
  • New vehicle bodies are lighter, cheaper, and quieter thanks to reduction in NVH
  • Another level of simplicity and improvements are coming with Cybertruck (as well as future products coming down the road)
• Intelligent seat belt tensioning based on vision system recently released, first in the industry to do this
  • Can also adjust the airbag deployment as well
  • Delivered via OTA update
  • Will have profound impact on passenger safety
  • Compatible for all HW3-equipped Teslas
• Cybertruck
  • Production still expected to start middle of 2023
  • “Best product ever” -Elon
• FSD Beta
  • Planned to be released to all North American customers by end of 2022
  • FSD will then be released to other geos such as Asia and EU soon after pending regulatory approval

Opening remarks from Zach Kirkhorn

• Made substantial progress in almost every area of the business
• New production records reached in existing factories and new ones actively ramping
• Highest solar production volumes in years
• Temporary shutdown had noticeable impact to vehicle margin
  • Factory ramping also associated with negative impact on vehicle margin
• Inflation, commodities, and logistics continue to be headwinds
• Resource constrained on Powerwall and Megapack which should be resolved in the 2nd half of 2022
• Austin & Berlin operating costs are going down as production ramps up
• Tesla sold 75% of Bitcoin holdings 
  • They did so as they were uncertain when COVID lockdowns in China would end
  • As a result they wanted to maximize cash position
  • They are still interested in Bitcoin and have not yet sold any Dogecoin
• Highest operating margins ever at 14.6%
• Still targeting 50% of growth and still within reach

Q&A

• Chinese EV Manufacturers & Software Innovation
  • Elon believes Tesla China is the best EV manufacturer in China
  • Chinese car companies will be a force to be reckoned with going forward
  • Tesla has respect for Chinese automakers but believes they have whats necessary to compete
• Unified Vector Space
  • Unified Vector Space would be if instead of knitting together dynamic & static objects w/ C++ you knit them together at the NN level (meaning you no longer need to reconcile them in C++ heuristics)
  • Architecturally better way
  • Slight improvement in efficiency of FSD stack and something they want to get to
  • Nirvana situation would be to have surround video auto labeling for all static & dynamic objects as well as surround video inference w/ spacial memory
  • Elon believes they have a unified vector space by the end of 2022
  • Elon is also very confident that Tesla will improve the frame rate as they delete legacy NNs and further optimize the FSD software stack
  • The goal is to get FSD Beta to operate at 36fps for all 8 cameras compared to the current 24 frames which will reduce latency when reacting to a dynamic environment
• Inflation & Future Price Reductions
  • They do not control so therefore Elon says take w/ grain salt but thinks inflation to decrease by end of 2022
  • Carbon, steel, aluminum, etc are trending down in cost which should see impact later in 2022, early 2023
  • Processing of lithium is insanely costly
  • Elon again encouraging entrepreneurs to enter the lithium business as there are, “software margins”
  • “License to print money” -Elon
• Bitcoin
  • Cryptocurrency is not something Tesla thinks about a lot according to Elon
  • Main goal is production and addressing climate change by making sustainable energy & transport a reality
• 4680s
  • Structural pack is a monumental step forward from a physics perspective and is the way to go
  • Gained perspective through entering production w/ structural pack Teslas which proved their hypotheses
  • Cost improvements are thanks to solving technical issues and scale
  • They have saved 4-5kg in mass from the early cast Model Y underbodies since their initial production
  • Plan is to reduce mass of castings and to include more parts (and to adapt vehicle to work better with castings)
  • Cybertruck will be another big step in this area
  • Making progress on 4680 production ramp but continuing to leverage supplier cells (2170s) to ramp Giga Berlin & Texas
  • Total production ramp of 4680 packs to 1000 per week by end of the year (preferably earlier)
  • Q2 @ Kato fully automated powder conveyance for the dry anode electrode tool there unlocking major improvements in production & yields too
  • Production as a result has increased 35% MoM since March and yields throughout factory are already at targets or trending towards them
  • Took learnings from Fremont cell & pack lines and built optimized lines in Giga Berlin & Texas
  • Cell design was revved to unlock higher performance and manufacturing simplicity
  • Lines were fully integrated and insourced additional content
  • As a result new challenges for ramping in Giga Berlin & Texas
  • Last quarter cell equipment was fully installed at Giga Texas and they have since produced their first commissioning car sets of 4680s cells
  • The target for Texas is to begin mass producing 4680 cells in Q3 2022 with the goal of being able to exceed the weekly cell production capacity of the Kato battery plant by end of 2022
  • Priority with 4680s initially is simplicity and scale, Tesla was not aiming to include all of the bells & whistles right off the bat
  • As manufacturing goals are achieved they plan to layer in new material technologies into their structural packs (and increase range as well)
  • Currently in regards to 4680s Tesla’s main focus is to remove low hanging issues that would prevent further production ramp
  • Dry electrode anode & cathode are included in the current 4680 process which makes things harder to ramp (yet they continue to achieve success here)
  • Once mass production achieved they plan to quickly iterate w/ an increase in energy density and overall performance soon thereafter
  • Tesla cell production will continue to compliment production volumes from suppliers
  • Fundamental rate limiter for transition to sustainable energy is rate of li-ion battery pack production
    • Not due to scarcity of raw materials, refining lithium in ultra high purity is quite difficult and requires massive amounts of machinery
    • Super difficult to create anode and cathode
    • Elon believes 2/3 of batteries in the future will be iron phosphate, maybe some with manganese
    • Tesla is actively working with suppliers to ramp as quick as possible
  • Tesla is taking action by building their own Cathode plant at Giga Texas as well as taking the plunge into lithium refinement
• FSD Development Progress & Andrej Departure
  • While Andrej Karpathy will be missed (recent departure), Elon remains very bullish on current team of 120 people in software / AI group and believes that they will solve FSD by end of 2022
  • No major setbacks or delays in FSD timeline should occur as a result of Andrej’s departure
  • Elon believes they will raise FSD price just before they go to wide beta (targeted for end of 2022)
  • Value of FSD is extremely high and not well understood by most people, Elon thinks its ridiculously cheap if promises of performance materialize
• Semiconductor Supply Chain Constraints
  • Tesla procures about 1600 unique pieces of silicon from 43 different companies
  • Supply chains are more stable w/ latest generation of chips
  • Chips from the analog & mixed signaling space still remain a challenge from a supply chain perspective
  • Supply chain line of sight continues to match planned outputs for both factories (no constraints)
  • Long term contracts already in place for key battery materials and so there are no concerns about future constraints
  • Tesla does not plan to manufacture their own chips however they continue to work with suppliers to ensure future product goals are achieved
  • Chip shortage forced Teslas to delete redundant chips and update software accordingly (big positive in hindsight)
• Cybertruck
  • Deliveries to begin by the middle of 2023
• Vehicle Demand
  • Vehicle demand not an issue for Tesla for the foreseeable future
  • No sizable macro impact on demand
  • Difference between value in money and affordability and why you can’t just keep increasing prices
  • Elon feels that they have raised prices to “frankly embarrassing levels”
    • Supply chain and inflation are main culprits for price increases
    • Elon is hopeful Tesla can reduce prices soon
  • Elon thinks its achievable to produce 40,000 vehicles per week by end of 2022
    • Teslas has already produced 30,000 vehicles per week many times, 40,000 vehicles per week is definitely in reach
    • Plan is to get Giga Berlin & Texas to ramp to 5,000 vehicles per week by end of 2022 and 10,000 vehicles per week by end of 2023
  • Elon reaffirms that Tesla does not have a demand problem but instead a production problem
• Elon’s Role At Tesla
  • If there is only good news Elon won’t plan to join the future earnings calls
  • Elon is committed to working at Tesla as long as he can continue to help advance the company
• AI
  • Elon didn’t want to steal thunder from AI day so he will save the news / updates regarding Dojo & Optimus for then

You can follow Dan Burkland on Twitter at @DBurkland.

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Tesla Intel Atom (MCU 2) and AMD Ryzen (MCU 3): Feature Differences and How to Tell What You Have

DirtyTesla

Tesla vehicles are equipped with two main computer systems: the MCU (Media Control Unit), which is responsible for entertainment and display functions, and the Autopilot/FSD Unit, often referred to as the FSD Computer.

Both of these systems have evolved over the years, and they’re commonly referred to by their generation. For example, MCU 2 refers to the second generation of the Media Control Unit. Similarly, the FSD computer is identified by its generation, often called Hardware 3 or Hardware 4, when referring to the third and fourth-generation hardware. More recently, Tesla has started referring to the FSD Computer as AI3 and AI4, but you’ll still hear the older terms used interchangeably.

These two systems are separate and they’re not upgraded at the same time, meaning it’s possible to have a vehicle with MCU 2 and FSD Hardware 3 or MCU 3 with Hardware 3. Some vehicles even feature MCU 1 alongside Hardware 3.

The MCU is not involved with Autopilot or FSD functions—it’s purely for infotainment and in-vehicle features such as vehicle visualization, gaming, maps, and entertainment. It doesn’t impact the capabilities or limitations of Tesla’s autonomous driving systems.

MCU 1 - NVIDIA Tegra 3

MCU 1 was the first media control unit to be introduced in Tesla vehicles, starting back in 2012. This system was used in the Model S and Model X until about April 2018, when Tesla began transitioning to MCU 2.

By the time the Model 3 launched in late 2017, it already included MCU 2. To keep legacy vehicles up to date, Tesla offers an infotainment retrofit that upgrades MCU 1 to MCU 2, which helps make the infotainment unit much more responsive and adds a variety of newer features. Tesla continues to support vehicles with MCU 1, although upgrades are much further apart. In 2024, Tesla added Automatic Emergency Braking (AEB) improvements to vehicles with MCU 1 and even support for FSD V12.3.6 (FSD HW3 required).

Period Offered: 2012 through April 2018

Upgrade: Available as a paid upgrade for Model S and Model X vehicles to go from MCU 1 to MCU 2.

MCU 2 - Intel Atom

The launch of the Model 3 introduced MCU 2, which ran on Intel’s Atom mobile processor. While the Intel Atom was capable at the time, it’s now considered outdated compared to modern standards. As Tesla continues to roll out new features, the limitations of the Atom processor have become more apparent.

There is a notable list of features that are unavailable to vehicles with MCU 2. Although Tesla has optimized software to improve compatibility, not all features have been made accessible to these vehicles.

Period Offered: MCU 2 was offered in 2017 (Model 3) through 2022 (availability differs based on region and model).

Upgrade: As of now, Tesla has not offered an upgrade path or retrofit to transition from MCU 2 to MCU 3, and they’re unlikely to do so.

MCU 3 - AMD Ryzen

In December 2021, Tesla began shipping vehicles with MCU 3, powered by AMD’s Ryzen processor. The first vehicles to feature MCU 3 were the refreshed Model S and Model X, which debuted in 2021. Shortly after, Model 3s and Model Ys were also equipped with MCU 3, and today, all Tesla vehicles, including the Cybertruck, come standard with MCU 3.

This MCU is now the most widely used on the road and is Tesla’s most advanced infotainment processor. It supports impressive 3D visualizations, allows improved gaming on the center touchscreen (and rear screens in equipped vehicles), and offers a host of other capabilities. MCU 3 is also the most feature-complete version, with new features being designed for it first and then backported to MCU 2 or MCU 1 when possible.

Period Offered: The first MCU 3 vehicles were released in December 2021 and is current through today.

Upgrade: MCU 3 is the most current infotainment unit that Tesla offers.

Features Missing on MCU 2 (Intel Atom)

High-fidelity park assist is limited to vehicles with MCU 3

Not a Tesla App

While Tesla does its best to continue to support MCU 2, there is a growing difference between the features available on a vehicle with an Intel Atom infotainment unit and one with the AMD Ryzen processor.

*Many recent game additions are available to MCU 3 only, including the ever-popular Vampire Survivors and Castle Doombad. Only certain Model S and Model X vehicles include a GPU and the ability to play games on Steam.

**Atari Games were removed from MCU 3 vehicles due to Emulator Licensing issues.

How to Tell - Intel or AMD

Identifying which MCU your vehicle has is straightforward. Simply go to Vehicle Options > Software > Additional Vehicle Information.

In the interface, you’ll find details about whether your vehicle is equipped with an Intel Atom (MCU 2) or AMD Ryzen processor (MCU 3).

MCU 4?

It’s been more than three years since Tesla introduced the AMD Ryzen-powered MCU. Despite advancements, including the transition from FSD Hardware 3 to AI4—and eventually AI5—there’s been no indication of an MCU 4 on the horizon.

The Ryzen processor’s impressive capabilities make it a solid choice for infotainment, and it’s well-suited to serve until there’s another big leap in CPU performance.

While Tesla will upgrade to MCU 4 at some point, it doesn’t seem imminent. Some may argue that Tesla transitioned to MCU 3 too late, leaving vehicles just a few years old feeling outdated. It’s possible Tesla might choose to introduce MCU 4 ahead of the need for more processing power, ensuring that older vehicles can continue to benefit from new software features in the future.

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Tesla Expected to Add Turn Signal Stalk Back to Model 3

Not a Tesla App

Following the surprising return of the turn signal stalk on the refreshed Model Y, reliable Tesla source Chris Zheng has indicated that the Model 3 will also be receiving a turn stalk. While it initially seems surprising, Tesla mentioned that after receiving lots of customer feedback, there is a lot of demand for the return of the stalk.

For those who appreciate the newer turn signal buttons on vehicles like the Cybertruck, this might come as a surprise. However, the Model 3 and Model Y are designed for the average driver transitioning from a traditional vehicle, making the removal of the turn signal stalk an unexpected and potentially disappointing change.

Turn Stalk

In a conversation during the latest episode of Jay Leno’s Garage, Tesla’s VP of Vehicle Engineering, Lars Moravy, mentioned that Tesla works to remove superfluous parts. In this case, they removed one part too many - and are now bringing back the turn signal stalk.

The updated stalk on the refreshed Model Y is a simplified version of the current Model Y stalk. It doesn’t include multi-stage turn signals (short three flashes versus staying), buttons, or other features. Pure and simple - it is utilized for signaling left and right. The rest of the functions of a traditional stalk remain either on the wheel or on the screen.

Lack of Right ‘Shifter’ Stalk

Tesla has no intent to bring back the right stalk, which is traditionally used to shift the vehicle from Drive to Reverse and Park in Teslas. It’s also used to activate Autopilot. The shifting functionality will remain on-screen or available via the backup by tapping the buttons on the ceiling near the hazards button. Shifting via the dash is intuitive and convenient once you get used to it - and with AutoShift hopefully coming out of Beta sometime soon, this could get even better.

Autopilot activation will remain with a button on the steering wheel. While a vehicle with a single stalk may look a little odd at first, Lars mentioned that Tesla didn’t receive many complaints about shifting or Autopilot use.

Retrofit

Not a Tesla App

We haven’t heard anything about retrofitting the 2024+ Model 3s with the turn signal stalk at this point. However, we imagine this may be a possibility in the future.

However, we can recommend using the wireless Enhauto’s S3XY Stalks if you want to bring a single or dual stalks back to your refreshed Model 3 and don’t want to wait for an official retrofit to arrive. They’re easy to install, well-designed, and reliable.

Other Models

The big question now is: will Tesla bring back the turn signal stalk for its other models? It’s possible, but we doubt it. The Model S and Model X, especially with the Yoke, feel more natural without a stalk, and the button-based signals suit their design. While a stalk might occasionally be useful—like signaling in and out of a roundabout—any future refresh of the S or X would likely include steer-by-wire instead.

On the Cybertruck, the absence of a stalk goes unnoticed, thanks to steer-by-wire, as the squircle steering wheel is never in an awkward position. After thousands of kilometers of daily driving, including plenty of roundabouts, the author can confidently say the signal stalk isn’t missed at all. In fact, the turn signal buttons feel more intuitive, given how the Cybertruck handles.

That said, could Tesla offer signal stalks as an option for those who prefer them? It’s not out of the question. We’ll keep you updated, but in the meantime, let us know—do you prefer turn signal buttons or a traditional stalk?

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