WEBVTT 1 00:00:00.080 --> 00:00:03.200 So too for the great groundbreaking and opening. So let's 2 00:00:03.200 --> 00:00:05.919 see with that we can move to I guess Q 3 00:00:06.040 --> 00:00:12.240 and A. We've obviously got significant bench strength here should 4 00:00:12.240 --> 00:00:18.800 probably hit like a bench and anyway, which we maybe 5 00:00:18.800 --> 00:00:21.719 have too many people on stage, but we'll try to 6 00:00:21.719 --> 00:00:26.079 answer questions within reason, you know, which this is meant 7 00:00:26.120 --> 00:00:29.000 to be kind of more of a long term sort 8 00:00:29.039 --> 00:00:34.119 of discussion as opposed to, uh, you know, what will 9 00:00:34.119 --> 00:00:36.679 be the production for the rest of the quarter type 10 00:00:36.719 --> 00:00:42.359 of thing. So let's try to orient our questions towards 11 00:00:42.799 --> 00:00:50.320 long term value creation and with that far away. 12 00:00:49.119 --> 00:00:49.679 Rob. 13 00:00:54.560 --> 00:00:58.560 All, it's a road lash for the Wolf research. Very 14 00:00:58.560 --> 00:01:03.000 exciting plans about the the next generation vehicle and power 15 00:01:03.000 --> 00:01:05.519 trains and batteries. I was hoping you can maybe talk 16 00:01:05.560 --> 00:01:09.280 to us a little bit about the timeline for deploying this. 17 00:01:09.640 --> 00:01:12.040 And it sounds like it's more than just a vehicle. 18 00:01:12.040 --> 00:01:14.719 This is a kind of a paradigm change on how 19 00:01:14.799 --> 00:01:19.439 vehicles are assembled, how batteries are put together and everything, 20 00:01:19.480 --> 00:01:24.159 and does that also just get reconfigured into everything that 21 00:01:24.200 --> 00:01:27.319 you do. So the model wise that are being built 22 00:01:27.359 --> 00:01:29.640 here will be built very differently in the future. Maybe 23 00:01:29.680 --> 00:01:32.319 just give us some feel for what happens from here 24 00:01:32.359 --> 00:01:33.959 and what's the timeline for implementation. 25 00:01:36.280 --> 00:01:37.640 Well, talk a little bit about that, but. 26 00:01:40.959 --> 00:01:45.680 Broadly speaking, the most profound architectural changes will be in 27 00:01:45.719 --> 00:01:50.640 future vehicles. Retooling a factory means bringing the factory down 28 00:01:50.719 --> 00:01:55.439 for an extended period of time, and that's I would 29 00:01:55.560 --> 00:02:01.120 preferred not to do that, I think. But but there 30 00:02:01.120 --> 00:02:03.920 are variants in how Model Y is produced. So we've 31 00:02:03.920 --> 00:02:08.599 got variants where there's rear casting, where there's a front 32 00:02:08.639 --> 00:02:10.400 and rear casting, and. 33 00:02:10.400 --> 00:02:11.039 We have the. 34 00:02:12.479 --> 00:02:16.400 Structural battery pack, and then there are a number of 35 00:02:16.400 --> 00:02:20.280 smaller improvements that occur. But I think for really really 36 00:02:20.280 --> 00:02:23.000 big changes those would be future vehicles. 37 00:02:24.319 --> 00:02:25.840 Yeah. I know, you guys want to add. 38 00:02:27.599 --> 00:02:31.400 Lars maybe, I mean yeah, so, I mean, as far 39 00:02:31.439 --> 00:02:34.000 as I agree with you one hundred percent, Elan, it's 40 00:02:34.080 --> 00:02:37.280 it's it's really easy to put innovations in new vehicles, 41 00:02:37.280 --> 00:02:39.599 but long term we'll obviously bring them back. We've always 42 00:02:39.840 --> 00:02:41.199 talked about that, but we don't want to take our 43 00:02:41.240 --> 00:02:44.319 factories down. As far as the timeline goes, you know, 44 00:02:44.319 --> 00:02:46.199 we're gonna go as fast as we can left or right. 45 00:02:47.159 --> 00:02:49.919 As always, you know, Elon alluded to the fact that 46 00:02:50.599 --> 00:02:53.319 Mexico will build our next end vehicle, but we will 47 00:02:53.319 --> 00:02:55.520 also be doing that in other plants, and so it's 48 00:02:55.560 --> 00:02:58.599 really about getting them all up and running. We expect 49 00:02:58.639 --> 00:03:02.319 that to be a huge volume product and yeah, we're 50 00:03:02.319 --> 00:03:04.599 going to move that quickly over the next couple of years. 51 00:03:12.080 --> 00:03:14.159 Let's go through all them. 52 00:03:14.599 --> 00:03:19.520 Thanks first in not Buena Mexico, Marmos, that's great, congratulations. 53 00:03:20.120 --> 00:03:27.039 Uh elon a question on applying first principles thinking and 54 00:03:27.199 --> 00:03:30.639 innovation to an area that up to now has seemingly 55 00:03:30.680 --> 00:03:34.080 been outside of your control, and that is on mining 56 00:03:34.159 --> 00:03:36.280 and extraction of some of the key materials. 57 00:03:36.759 --> 00:03:37.520 I believe a couple of. 58 00:03:37.520 --> 00:03:40.840 Years ago you you had a patent on sodium chloride 59 00:03:41.240 --> 00:03:44.800 to extract lithium from some from some clays and spodyming 60 00:03:44.840 --> 00:03:48.520 clay and things of that nature. Any How, how does 61 00:03:48.560 --> 00:03:51.319 that fit into the plan of maybe bringing real innovation 62 00:03:51.439 --> 00:03:54.120 into a mining sector that could use a little you know, 63 00:03:54.159 --> 00:03:56.199 maybe waking up and getting those costs down, because that 64 00:03:56.199 --> 00:03:57.280 could be a relegating factor. 65 00:03:57.319 --> 00:04:02.520 It seems well, we're gonna address whatever we think the 66 00:04:02.560 --> 00:04:06.560 limiting factor is at any point in time, so we 67 00:04:06.919 --> 00:04:10.919 would like to do the least amount possible, So we 68 00:04:11.280 --> 00:04:14.520 don't want to get into the mining or refining sector. 69 00:04:15.000 --> 00:04:16.480 We will do that if we have to. 70 00:04:18.920 --> 00:04:26.360 I do think the focus really should be on refining capacity. 71 00:04:26.439 --> 00:04:30.839 You know, we need to make just a very giant 72 00:04:31.879 --> 00:04:38.879 amount of anode cathode lithium, latinatruxide, liatin combinates. It's really 73 00:04:38.920 --> 00:04:46.319 the refining capacity that is the biggest choke point. Yeah, 74 00:04:46.519 --> 00:04:49.000 so that's that's why we're building a lithium refinery in 75 00:04:49.040 --> 00:04:49.759 Corpus Christy. 76 00:04:52.920 --> 00:04:56.560 In terms of the mining companies that are out there, 77 00:04:57.240 --> 00:04:59.959 uh and looking at that part of the value chain. 78 00:05:00.079 --> 00:05:03.160 And so we do have large suppliers of lithium right 79 00:05:03.199 --> 00:05:06.639 now and they are aware of you know, how we're 80 00:05:06.680 --> 00:05:11.360 approaching the Corpus refinery and the technologies we're trying there. 81 00:05:11.560 --> 00:05:14.319 And the reason we're making them aware of it is 82 00:05:14.360 --> 00:05:16.959 because we think they're fundamentally more scalable. And as we 83 00:05:17.040 --> 00:05:20.560 prove them out, we plan to share that with them because, 84 00:05:20.720 --> 00:05:22.439 as Elon says, like, it's not really like we want 85 00:05:22.480 --> 00:05:24.000 to do these things. We're doing them because it's not 86 00:05:24.079 --> 00:05:26.439 happening fast enough. So if we can prove that it 87 00:05:26.519 --> 00:05:28.839 can be done faster, the intention is to transfer that 88 00:05:28.959 --> 00:05:32.839 knowledge to our large our current suppliers, and the same 89 00:05:32.959 --> 00:05:35.600 is actually true. It was actually a clay process that 90 00:05:36.000 --> 00:05:37.920 we were playing with and we continue to work on 91 00:05:38.319 --> 00:05:40.639 the same is true on that. So we've worked with 92 00:05:40.680 --> 00:05:44.399 our suppliers as well on trials and we're sharing knowledge 93 00:05:44.439 --> 00:05:46.920 there and the intention is just to help the whole 94 00:05:46.959 --> 00:05:51.040 world do this better. And ultimately this here is getting 95 00:05:51.079 --> 00:05:53.319 the lithium or whatever it is out of the order. 96 00:05:56.399 --> 00:06:02.279 And we're obviously building a cathode processing facility just adjacent 97 00:06:02.319 --> 00:06:05.319 to this building. So a little further down the road 98 00:06:05.639 --> 00:06:12.800 you'll see another large construction that's for cathode refining. But 99 00:06:13.120 --> 00:06:15.000 like I said, we'd really prefer if others did that. 100 00:06:16.240 --> 00:06:18.360 We're doing it because we have to, because we want to. 101 00:06:19.079 --> 00:06:21.519 Yeah, And in that case, there just isn't really any 102 00:06:21.639 --> 00:06:23.800 large scale cathode production in the United States and it 103 00:06:23.879 --> 00:06:26.639 needed to be done. And again, if we're going to 104 00:06:26.720 --> 00:06:28.199 do it, we're going to try to do it from 105 00:06:28.199 --> 00:06:30.800 a first principles perspective. So we have tried a bunch 106 00:06:30.800 --> 00:06:32.879 of new things there. We're confident that they will work, 107 00:06:33.360 --> 00:06:35.480 and as they prove out again, we want to bring 108 00:06:35.560 --> 00:06:38.199 them back to our supplier so they can build new 109 00:06:38.439 --> 00:06:40.839 facilities more quickly with less investment. 110 00:06:44.560 --> 00:06:47.160 Right, let's go to ben Hi ben Cala for bair. 111 00:06:47.600 --> 00:06:51.279 So similar On the renewable side, Is there more that 112 00:06:51.399 --> 00:06:56.199 you can do in Tesla to nudge the rest of 113 00:06:56.240 --> 00:06:58.879 the renewable industry to speed up since it's such a 114 00:06:58.920 --> 00:07:01.879 big a pillar of the master plan Three? 115 00:07:04.639 --> 00:07:06.759 Well, I mean, I don't know more we can do, 116 00:07:07.000 --> 00:07:12.160 but I can say that if there's like entrepreneurs out 117 00:07:12.199 --> 00:07:16.600 there that wanted to have like a guaranteed chance of success, 118 00:07:16.920 --> 00:07:22.279 it would be refining lithium or anode and cathodes or 119 00:07:22.319 --> 00:07:27.160 any any materials whatsoever for uh leathium on cells as 120 00:07:27.240 --> 00:07:27.720 no brainer. 121 00:07:30.759 --> 00:07:30.959 Yep. 122 00:07:32.000 --> 00:07:37.199 I think we're doing everything we can. So yeah. 123 00:07:37.240 --> 00:07:40.439 On the on the reneable energy thing, the thing that 124 00:07:40.879 --> 00:07:43.839 we can do Tesla is the more we reduce the 125 00:07:43.920 --> 00:07:46.240 cost of storage, the more we reduce the cost of 126 00:07:46.279 --> 00:07:49.759 stationary storage, and the more we bring like flexible load 127 00:07:49.839 --> 00:07:51.639 to the grid in the form of like cars charging 128 00:07:51.680 --> 00:07:55.439 at the right times, the more valuable renewables are. Because 129 00:07:55.800 --> 00:07:58.360 in like Texas right now, I wasn't joking like that's 130 00:07:58.399 --> 00:08:04.360 off or whatever. So so bringing really low cost storage 131 00:08:04.439 --> 00:08:08.519 onto the grid makes renewables more valuable. Which ultimately will 132 00:08:08.560 --> 00:08:11.160 accelerate their deployment. So that's how we focus on it. 133 00:08:11.199 --> 00:08:11.800 I guess. 134 00:08:14.079 --> 00:08:28.639 Felippe, thank you. It's Sidi Bouscher Jeffries. I've got two questions. 135 00:08:29.120 --> 00:08:32.200 The first one, when I think about in this industry, 136 00:08:32.279 --> 00:08:34.919 everybody wants to be Tesla. Every comic er is trying 137 00:08:34.960 --> 00:08:37.840 to emulate what you're doing well done. The one thing 138 00:08:37.919 --> 00:08:44.000 they don't do is focus on having as much growth 139 00:08:44.039 --> 00:08:46.759 as possible with as hew models as possible. So I'm 140 00:08:46.799 --> 00:08:50.120 just trying to understand, as you aim for twenty million 141 00:08:50.240 --> 00:08:53.320 units in twenty thirty, how many models do you think 142 00:08:54.200 --> 00:08:56.519 you need to get there, and how does it fit 143 00:08:56.600 --> 00:08:58.360 into your drive to hyper scale? 144 00:09:00.080 --> 00:09:00.879 How do you manage this? 145 00:09:01.159 --> 00:09:03.960 And also the fact that probably consumers at some point 146 00:09:04.480 --> 00:09:06.080 I don't want to see your tests out the same 147 00:09:06.120 --> 00:09:08.679 test at every street corner, So I'm just trying to 148 00:09:08.759 --> 00:09:10.120 get your your sense of that. 149 00:09:11.039 --> 00:09:12.320 And my other question is on. 150 00:09:14.360 --> 00:09:17.799 Bidirectional I mean, you talked a lot about making you 151 00:09:17.879 --> 00:09:21.080 know a world more renewables and better use it of cars. 152 00:09:21.559 --> 00:09:24.879 I think bidirectional charging is one way of better using cars, 153 00:09:25.039 --> 00:09:27.919 but you seem to have been reluctant about doing that 154 00:09:28.039 --> 00:09:30.080 in the past, so I'm just wondering what your latest 155 00:09:30.159 --> 00:09:31.320 views are on the topic. 156 00:09:35.480 --> 00:09:43.039 Sure, on bi directional it it wasn't like a conscious 157 00:09:43.320 --> 00:09:45.480 decision to not do it. It just wasn't a priority 158 00:09:45.519 --> 00:09:47.320 at the time. I think is maybe the way to 159 00:09:47.360 --> 00:09:50.120 think about it. As we looked, as we continue to 160 00:09:50.159 --> 00:09:54.399 improve the para electronics in our vehicle, we've found ways 161 00:09:54.480 --> 00:09:57.480 to bring brighter actionality while actually reducing costs of para 162 00:09:57.519 --> 00:10:01.519 electronics in the vehicle. And at allten Tesla, the goal 163 00:10:01.639 --> 00:10:05.960 is usually to get more for less, and so we 164 00:10:06.080 --> 00:10:07.559 are in the middle of kind of like a power 165 00:10:07.600 --> 00:10:11.120 electronics retool. I would say that we'll bring that functionality 166 00:10:11.159 --> 00:10:13.399 to all of our vehicles over the next you know, 167 00:10:14.000 --> 00:10:14.919 two years, let's say. 168 00:10:16.159 --> 00:10:17.759 But but it's. 169 00:10:19.200 --> 00:10:20.679 Yeah, I guess that's how I'll say there. 170 00:10:21.159 --> 00:10:22.639 I don't think very many people are going to use 171 00:10:22.679 --> 00:10:26.039 my directional charging unless you have a power wall, because 172 00:10:26.080 --> 00:10:28.759 if you unplug your car, your house goes dark and 173 00:10:28.879 --> 00:10:30.320 this is extremely inconvenient. 174 00:10:34.759 --> 00:10:37.159 Yeah, most of the value it comes in charging the 175 00:10:37.240 --> 00:10:39.840 car at the right time. It's not really about sending 176 00:10:40.039 --> 00:10:40.840 energy the other way. 177 00:10:42.159 --> 00:10:42.360 Yeah. 178 00:10:42.399 --> 00:10:44.919 I mean, if if you have a power wall that 179 00:10:45.039 --> 00:10:47.759 can take the house load then you can use your 180 00:10:47.840 --> 00:10:51.480 car as supple as a supplementary energy source to the 181 00:10:51.559 --> 00:10:54.320 power wall, and then you know you're not gonna drive 182 00:10:54.480 --> 00:10:58.279 one crazy by unplugging your car and having the house goal. 183 00:10:59.200 --> 00:11:02.320 So I think there's some value there as. 184 00:11:02.159 --> 00:11:06.480 A supplemental energy source down the road where if you 185 00:11:06.559 --> 00:11:07.559 have a power wall. 186 00:11:07.399 --> 00:11:13.840 You've not diminished the convenience of the people in the house. 187 00:11:16.200 --> 00:11:21.600 And the question of number of models, how many models? 188 00:11:22.159 --> 00:11:26.679 But if not that many, I'm really ten, I don't know, 189 00:11:27.080 --> 00:11:32.480 not that many. There's I mean what's happened with the 190 00:11:32.519 --> 00:11:34.559 conventional cars is people have run out of things to do. 191 00:11:34.840 --> 00:11:36.759 So if you run out of things to do, they 192 00:11:36.840 --> 00:11:38.960 just end up reshuffling the deck and you have pretty 193 00:11:39.000 --> 00:11:42.600 much the same. I mean, how many variants of a 194 00:11:42.679 --> 00:11:47.679 car are there on the road. There's like hundreds. But 195 00:11:48.320 --> 00:11:52.960 there are they good variants? No, mostly not. They're just 196 00:11:53.120 --> 00:11:57.679 variants for the sake of variance. But look at how 197 00:11:58.120 --> 00:12:01.240 have things converged with the phone. I mean, there used 198 00:12:01.279 --> 00:12:02.720 to be hundreds of flip phones. 199 00:12:02.960 --> 00:12:05.639 Now what do we have? It'll be like that. 200 00:12:10.039 --> 00:12:15.320 George George Genericas from Cannon Coordenuity just had a question 201 00:12:15.399 --> 00:12:19.519 about your plans to grow market share in China, and 202 00:12:19.679 --> 00:12:23.679 also whether or not the political tensions between the United 203 00:12:23.679 --> 00:12:26.600 States and China impact your long term ambitions there. 204 00:12:26.840 --> 00:12:35.080 Thank you. I don't know, Hey, Tom Nott, do don't 205 00:12:35.159 --> 00:12:36.360 don't swear too hard. 206 00:12:39.360 --> 00:12:44.799 Yeah, well, we're still growing up our markets here in 207 00:12:44.919 --> 00:12:49.840 China quite strongly, actually, especially you know early this year 208 00:12:50.320 --> 00:12:54.480 we had this price adjustment. After that we actually generated 209 00:12:54.960 --> 00:12:59.200 a huge demand more then we can produce. Really, and 210 00:13:00.440 --> 00:13:06.399 as Elon said, as long as you're offer a product 211 00:13:07.600 --> 00:13:11.279 with value at affordable price, you know, you don't have 212 00:13:11.360 --> 00:13:14.759 to worry about demand. That's basically the philosophy that we 213 00:13:14.960 --> 00:13:19.279 we follow. We try everything to cut cost from supply chain, 214 00:13:20.240 --> 00:13:23.440 from improve the efficiency in the factory, and to pass 215 00:13:23.480 --> 00:13:26.159 down that value to our customers. I think you as 216 00:13:26.720 --> 00:13:28.639 long as we'll continue to do that, I'm not too 217 00:13:28.679 --> 00:13:32.840 concerned about the market share in China. In the second part, Geopolic, 218 00:13:33.080 --> 00:13:33.600 no one else. 219 00:13:34.559 --> 00:13:35.399 We do our best. 220 00:13:35.879 --> 00:13:38.360 We we we actually create a lot of jobs to 221 00:13:38.480 --> 00:13:42.480 look low community, and we tender also. 222 00:13:43.720 --> 00:13:45.639 With at our suppliers. 223 00:13:46.759 --> 00:13:48.879 Factories will create a lot of jobs as well, and 224 00:13:49.759 --> 00:13:54.120 we'll contribute with a lot of to the local economy. 225 00:13:54.919 --> 00:13:57.679 I think you know, as long as we're needed in 226 00:13:57.759 --> 00:13:59.919 this country. I don't see there much. 227 00:13:59.799 --> 00:14:05.440 Of the risk of that, Colin, Colin Rush from Oppenheimer. 228 00:14:05.840 --> 00:14:07.480 You know, one of the things I was struck by 229 00:14:07.559 --> 00:14:10.559 in the presentation was the operational efficiency metrics that you 230 00:14:10.600 --> 00:14:12.639 guys are talking about. Could you talk a little bit 231 00:14:12.639 --> 00:14:15.759 about the velocity of learning cycles and how you guys 232 00:14:15.879 --> 00:14:18.559 track that and think about that as an organization as 233 00:14:18.600 --> 00:14:21.080 you work into a variety of other areas from a 234 00:14:21.120 --> 00:14:29.759 innovation perspective, if anyone wanted to try that, I. 235 00:14:29.799 --> 00:14:32.600 Mean, I'll say one very high level thing, which is 236 00:14:33.039 --> 00:14:35.360 you can't improve something you don't measure. And we're like 237 00:14:35.519 --> 00:14:41.559 ruthless measurers at Tesla, and once you start measuring things 238 00:14:41.639 --> 00:14:44.720 that contribute to operational efficiency, you actually have a path 239 00:14:44.840 --> 00:14:48.080 to doing something about it. So I guess the key 240 00:14:48.200 --> 00:14:49.240 is a good measuring stick. 241 00:14:52.799 --> 00:14:59.360 Okay, it's something I should say with respect to demand, 242 00:14:59.519 --> 00:15:01.679 which I've said a few times over the years, but 243 00:15:01.759 --> 00:15:06.399 it sometimes it needs to be set again, which is. 244 00:15:08.240 --> 00:15:11.960 The overwhelmingly the uh. 245 00:15:12.799 --> 00:15:16.000 There's the desire for people to own a Tesla is 246 00:15:16.080 --> 00:15:19.519 extremely high. The limiting factor is their ability to pay 247 00:15:19.600 --> 00:15:22.639 for a tesla, not do they want to eat Tesla. 248 00:15:24.320 --> 00:15:27.279 It's easy for people in this room to lose sight 249 00:15:27.320 --> 00:15:30.480 of that. If your income is far in excess of 250 00:15:30.559 --> 00:15:33.320 what a car costs, then you look at value for money, 251 00:15:33.399 --> 00:15:37.159 but you do not consider affordability. But for the vast 252 00:15:37.240 --> 00:15:41.000 majority of people it is affordability driven. This is why 253 00:15:41.080 --> 00:15:44.440 we cannot simply double the price of the car. Or 254 00:15:44.480 --> 00:15:46.399 you could say and think about things in the limit 255 00:15:46.639 --> 00:15:50.159 where if you hadn't you know, an infinitely desirable car, 256 00:15:50.399 --> 00:15:55.360 but it costs ten million dollars, it wouldn't matter because 257 00:15:55.360 --> 00:16:00.399 people can Most people do not have that, So demand 258 00:16:00.559 --> 00:16:06.720 is very much a function of affordability, not desire. Very important. 259 00:16:07.960 --> 00:16:10.399 One of the things we weren't sure about was the 260 00:16:10.519 --> 00:16:14.879 price elasticity of demand for Tesla's, so like, as we 261 00:16:15.080 --> 00:16:21.200 lower the price, how much does demand increase? And we 262 00:16:21.360 --> 00:16:25.320 found that even small changes in the price have a 263 00:16:25.480 --> 00:16:29.399 big effect on demand, very big. So that was a 264 00:16:29.480 --> 00:16:38.039 good thing to learn. Yeah, and then this autonomy question. 265 00:16:39.639 --> 00:16:40.720 Is very very big. 266 00:16:42.080 --> 00:16:44.480 Because it could potentially have I don't know, five times 267 00:16:44.519 --> 00:16:47.559 the utility of the asset that you currently have. 268 00:16:47.799 --> 00:16:49.360 So passenger car. 269 00:16:49.360 --> 00:16:54.200 Is ten or twelve hours a week of usage plus 270 00:16:54.240 --> 00:16:58.360 a lot of parking expenses, an autonomous car could be 271 00:16:58.399 --> 00:17:04.599 fifty sixty hours a week or something like that, and 272 00:17:04.680 --> 00:17:06.839 you could get rid of a lot of parking expenses. 273 00:17:07.559 --> 00:17:12.640 So you know, if this, if this is true, then 274 00:17:13.319 --> 00:17:19.759 as autonomy is effectively turned on for the fleet, it 275 00:17:20.119 --> 00:17:23.160 may be that it probably will be the biggest asset 276 00:17:23.240 --> 00:17:34.519 value increase in history overnight, Emmanuel, Thank you so much. 277 00:17:34.559 --> 00:17:39.519 Emanuel Raznov from Deutsche Bank. So, as you start launching 278 00:17:39.599 --> 00:17:43.279 this next generation vehicle and ramping up volume, what will 279 00:17:43.319 --> 00:17:47.519 be your nearest term priority in terms of segment or 280 00:17:47.640 --> 00:17:51.279 vehicles focus. The slide that you showed with two vehicles 281 00:17:51.359 --> 00:17:54.279 under wrap seemed based on form factor one of them 282 00:17:54.319 --> 00:17:56.240 maybe he looks like a van, another one looks like 283 00:17:56.359 --> 00:17:59.680 maybe like a smaller vehicle, like potentially a model. To 284 00:18:00.440 --> 00:18:02.440 what is the nearest focus for you in terms of 285 00:18:02.839 --> 00:18:05.559 ramping up the next gen vehicle and how do you 286 00:18:05.680 --> 00:18:09.279 make sure that by lowering the price point so much, 287 00:18:09.319 --> 00:18:11.880 because the costs is going down fifty percent, you're not 288 00:18:12.039 --> 00:18:23.240 cannibalizing demand, you know for your existing vehicles, I mean 289 00:18:23.359 --> 00:18:25.480 demand for our vehicles in terms of desire to own 290 00:18:25.559 --> 00:18:31.200 them may as well be infinite. It's indistinguishable from infinite 291 00:18:31.240 --> 00:18:35.160 at this point, affordability is what matters. So as you 292 00:18:35.240 --> 00:18:40.279 make the car more affordable, we will have demand go crazy. Basically, 293 00:18:41.680 --> 00:18:43.440 the issue is how do we build the cars. The 294 00:18:43.519 --> 00:18:47.000 hard part is building the cars. I can't emphasize that enough. 295 00:18:47.039 --> 00:18:49.480 The hard part is building the cars and the entire 296 00:18:49.519 --> 00:18:51.240 supply chain that goes with the cars. 297 00:18:52.039 --> 00:18:52.480 This is a. 298 00:18:54.119 --> 00:19:02.279 Logistics challenge of extraordinary difficulty. All the things that have 299 00:19:02.319 --> 00:19:03.839 to go into the car have to scale with the 300 00:19:03.920 --> 00:19:09.359 car while everything is doing an exponential ramp. And if 301 00:19:09.400 --> 00:19:15.039 you miss even one of those things doesn't matter. Why earthquake, 302 00:19:15.319 --> 00:19:19.119 flood fire, revolution, I thought I've heard them all. 303 00:19:19.440 --> 00:19:20.359 I mean, it's. 304 00:19:22.720 --> 00:19:25.680 Any part of that supply chain gets interrupted, you're now 305 00:19:25.920 --> 00:19:32.720 then you have a seizure. The hard part is building 306 00:19:32.759 --> 00:19:37.200 the cars, by far, and the supply chain that goes 307 00:19:37.240 --> 00:19:40.440 with it. You guys want to talk about the supply 308 00:19:40.519 --> 00:19:44.960 chains though, yeah they might, I think, you know. 309 00:19:45.440 --> 00:19:49.039 And the presentation I'd mentioned perfection is a passing great. 310 00:19:49.519 --> 00:19:53.200 We really need everything to happen perfectly, and the strategy 311 00:19:53.240 --> 00:19:56.000 for mitigating the different risks, some of which were anticipated 312 00:19:56.039 --> 00:19:59.240 and some weren't, is really bespoke to the situation. And 313 00:19:59.720 --> 00:20:04.440 then really the unique subject matter expertise and a deep 314 00:20:04.519 --> 00:20:07.319 knowledge of the particular supply chain you're managing to come 315 00:20:07.400 --> 00:20:10.480 up with those strategies. So we've seen everything from as 316 00:20:10.519 --> 00:20:13.400 Elon mentioned, you know, first the tariffs that flew back 317 00:20:13.440 --> 00:20:17.559 and forth, then the ocean logistics issue, a chip shortage, 318 00:20:17.960 --> 00:20:21.559 COVID floods, there was a fire and a fab in 319 00:20:21.680 --> 00:20:26.400 Japan that knocked down. There was a massive COVID spike 320 00:20:26.400 --> 00:20:28.119 in Malaysia where a lot of the chips to the 321 00:20:28.200 --> 00:20:30.799 back end of a lot of chips was down there. 322 00:20:31.079 --> 00:20:33.920 In more, this was one that Elon was involved with 323 00:20:34.039 --> 00:20:39.640 as well. And yeah, that's it's nerve wracking, but somehow 324 00:20:40.000 --> 00:20:40.440 it works. 325 00:20:42.240 --> 00:20:45.160 Yeah, and although it is difficult, I think we have 326 00:20:45.240 --> 00:20:50.000 been laying the foundation to be as intimate to all 327 00:20:50.079 --> 00:20:54.039 the tiers of the supply chain, building that control and 328 00:20:54.640 --> 00:20:57.920 you know, directing the different tiers of supply chain. That's 329 00:20:57.960 --> 00:21:00.960 the way we are trying to make it. The risks 330 00:21:01.000 --> 00:21:05.680 that come with it, you know, again, dual sourcing, triple sourcing, 331 00:21:06.240 --> 00:21:10.359 having redundancy is the way we've been trying to mitigate 332 00:21:10.440 --> 00:21:10.640 for it. 333 00:21:12.759 --> 00:21:12.960 Yeah. 334 00:21:13.400 --> 00:21:16.279 On that point, when we think about vehicles, when you 335 00:21:16.319 --> 00:21:19.440 think about three y as an architecture SX as an architecture, 336 00:21:19.759 --> 00:21:22.079 our next generation platform is more than one segment, and 337 00:21:22.160 --> 00:21:24.279 really we're thinking about all the segments that are available 338 00:21:24.279 --> 00:21:26.079 that we haven't captured and where the market would be 339 00:21:26.480 --> 00:21:29.240 and designing it with our supply chain partners so that 340 00:21:29.319 --> 00:21:32.000 we can go quickly through those segments for where we need. 341 00:21:32.119 --> 00:21:35.000 But to Elon's point, if you make a car desirable 342 00:21:35.799 --> 00:21:40.799 and affordable, you know, oftentimes it doesn't necessarily matter what 343 00:21:40.920 --> 00:21:43.880 segment it's in because it's one that you want. And 344 00:21:44.319 --> 00:21:46.000 we've seen that with Model three when a lot of 345 00:21:46.000 --> 00:21:47.680 people thought that sedan was not going to be a 346 00:21:47.759 --> 00:21:51.039 great hit, but we sell tons of them. So the 347 00:21:51.119 --> 00:21:54.400 next generation platform is not one vehicle, it is multiple, 348 00:21:54.440 --> 00:21:57.559 and it's on the segment that we will, you know, 349 00:21:57.640 --> 00:22:00.279 really try and focus on that affordability and desira ability 350 00:22:00.319 --> 00:22:02.200 point more over than where we start it. 351 00:22:04.559 --> 00:22:07.359 Yeah, I mean there's like, I think it's an old saying, 352 00:22:07.400 --> 00:22:09.319 like battles the one with tactics or is the one 353 00:22:09.359 --> 00:22:14.960 with logistics. The logistics challenges here are enormous, and when 354 00:22:15.000 --> 00:22:19.200 you start like being a very significant percentage of an industry, 355 00:22:20.200 --> 00:22:24.759 you can't overcapacitize. It's not realistic, and some of these 356 00:22:25.319 --> 00:22:27.799 things like you say, like well you dual source or 357 00:22:27.839 --> 00:22:30.200 triple source. You can do that maybe for small things, 358 00:22:30.240 --> 00:22:33.559 but you can't do it for big things because if 359 00:22:33.640 --> 00:22:37.799 you're if you're triple sourced and one of it's like 360 00:22:37.880 --> 00:22:41.279 having a plane with three engines, where if any of 361 00:22:41.319 --> 00:22:42.720 the three engines fails, you crash. 362 00:22:43.680 --> 00:22:45.799 It's like, you know, so. 363 00:22:47.599 --> 00:22:50.240 You have to eat the overcapacitizes, which drives your cafex 364 00:22:50.319 --> 00:22:54.920 up and it has idle suppliers somewhere and big warehouses, 365 00:22:55.839 --> 00:23:00.640 or you're designed to some overage that's you know, reasonable, 366 00:23:03.079 --> 00:23:06.599 and then you have expedite costs because inevitably there's something 367 00:23:06.640 --> 00:23:08.519 goes wrong somewhere and you've got to fly things around. 368 00:23:10.680 --> 00:23:13.559 So it's really just the rate of progress is the 369 00:23:13.640 --> 00:23:17.000 rate of which we are able to scale a ten 370 00:23:17.079 --> 00:23:18.680 thousand logistics problems. 371 00:23:20.079 --> 00:23:21.839 The most significant of those is the. 372 00:23:22.039 --> 00:23:29.559 Cell production, and so we actually liberately try to overdo 373 00:23:31.000 --> 00:23:33.799 cell production or self supply. 374 00:23:35.480 --> 00:23:38.200 To have that exceed what is needed in vehicles. 375 00:23:38.559 --> 00:23:41.160 Because if it goes below what's needed in vehicles, then 376 00:23:41.880 --> 00:23:46.799 with the factories stall. But then what do you do 377 00:23:46.880 --> 00:23:49.440 with all these extra cells? It's like, well, okay, so 378 00:23:49.559 --> 00:23:52.720 the much easier thing to scale up and down is 379 00:23:53.480 --> 00:23:58.480 is powerwall and megapac output stationary storage. So we can 380 00:23:58.519 --> 00:24:05.039 then overcapacities and sells and packs and scale production of 381 00:24:05.200 --> 00:24:09.279 stationary storage, which is much easier to scale than vehicle production. 382 00:24:10.440 --> 00:24:13.079 So that's strategically, I think, a good thing. 383 00:24:15.480 --> 00:24:18.200 Yeah, I mean the capex for megapac is tiny compared 384 00:24:18.200 --> 00:24:19.200 to capex for vehicles. 385 00:24:20.359 --> 00:24:23.960 And also megapac demand is quasi infinite. 386 00:24:24.559 --> 00:24:28.799 It basically as long as we are competitive with utilities, 387 00:24:29.079 --> 00:24:35.359 we can sell as many like it's yeah, quasi infinite 388 00:24:35.400 --> 00:24:39.720 demand for that really for multi tier many Taro White hours, 389 00:24:40.359 --> 00:24:41.599 and we got a long way to go to get 390 00:24:41.799 --> 00:24:43.200 to many Taro White hours per year. 391 00:24:46.680 --> 00:24:49.160 Then let's go to down. 392 00:24:51.480 --> 00:24:55.640 Thank you, Dan Leevy Barclays. I think we know competitive 393 00:24:55.920 --> 00:25:01.519 dynamics differ significantly by region. Cost dynamics different by region. 394 00:25:01.599 --> 00:25:04.519 We saw that with your China Giga factory, far superior 395 00:25:04.599 --> 00:25:06.039 cost to what you had for a month I realized 396 00:25:06.039 --> 00:25:09.000 it was a new factory. But uh, they're clearly different dynamics. 397 00:25:09.039 --> 00:25:13.119 So to what extent are the cost strategies that you've 398 00:25:13.200 --> 00:25:16.079 laid out today, Do they differ by region or or 399 00:25:16.160 --> 00:25:18.599 is there more of a global, one size fits all 400 00:25:19.160 --> 00:25:27.680 approach on reducing costs? 401 00:25:29.119 --> 00:25:33.039