Speaker 1: So too for the great groundbreaking and opening. So let's
Speaker 1: see with that we can move to I guess Q
Speaker 1: and A. We've obviously got significant bench strength here should
Speaker 1: probably hit like a bench and anyway, which we maybe
Speaker 1: have too many people on stage, but we'll try to
Speaker 1: answer questions within reason, you know, which this is meant
Speaker 1: to be kind of more of a long term sort
Speaker 1: of discussion as opposed to, uh, you know, what will
Speaker 1: be the production for the rest of the quarter type
Speaker 1: of thing. So let's try to orient our questions towards
Speaker 1: long term value creation and with that far away.
Speaker 2: Rob.
Speaker 3: All, it's a road lash for the Wolf research. Very
Speaker 3: exciting plans about the the next generation vehicle and power
Speaker 3: trains and batteries. I was hoping you can maybe talk
Speaker 3: to us a little bit about the timeline for deploying this.
Speaker 3: And it sounds like it's more than just a vehicle.
Speaker 3: This is a kind of a paradigm change on how
Speaker 3: vehicles are assembled, how batteries are put together and everything,
Speaker 3: and does that also just get reconfigured into everything that
Speaker 3: you do. So the model wise that are being built
Speaker 3: here will be built very differently in the future. Maybe
Speaker 3: just give us some feel for what happens from here
Speaker 3: and what's the timeline for implementation.
Speaker 2: Well, talk a little bit about that, but.
Speaker 1: Broadly speaking, the most profound architectural changes will be in
Speaker 1: future vehicles. Retooling a factory means bringing the factory down
Speaker 1: for an extended period of time, and that's I would
Speaker 1: preferred not to do that, I think. But but there
Speaker 1: are variants in how Model Y is produced. So we've
Speaker 1: got variants where there's rear casting, where there's a front
Speaker 1: and rear casting, and.
Speaker 2: We have the.
Speaker 1: Structural battery pack, and then there are a number of
Speaker 1: smaller improvements that occur. But I think for really really
Speaker 1: big changes those would be future vehicles.
Speaker 2: Yeah. I know, you guys want to add.
Speaker 4: Lars maybe, I mean yeah, so, I mean, as far
Speaker 4: as I agree with you one hundred percent, Elan, it's
Speaker 4: it's it's really easy to put innovations in new vehicles,
Speaker 4: but long term we'll obviously bring them back. We've always
Speaker 4: talked about that, but we don't want to take our
Speaker 4: factories down. As far as the timeline goes, you know,
Speaker 4: we're gonna go as fast as we can left or right.
Speaker 4: As always, you know, Elon alluded to the fact that
Speaker 4: Mexico will build our next end vehicle, but we will
Speaker 4: also be doing that in other plants, and so it's
Speaker 4: really about getting them all up and running. We expect
Speaker 4: that to be a huge volume product and yeah, we're
Speaker 4: going to move that quickly over the next couple of years.
Speaker 5: Let's go through all them.
Speaker 6: Thanks first in not Buena Mexico, Marmos, that's great, congratulations.
Speaker 6: Uh elon a question on applying first principles thinking and
Speaker 6: innovation to an area that up to now has seemingly
Speaker 6: been outside of your control, and that is on mining
Speaker 6: and extraction of some of the key materials.
Speaker 7: I believe a couple of.
Speaker 6: Years ago you you had a patent on sodium chloride
Speaker 6: to extract lithium from some from some clays and spodyming
Speaker 6: clay and things of that nature. Any How, how does
Speaker 6: that fit into the plan of maybe bringing real innovation
Speaker 6: into a mining sector that could use a little you know,
Speaker 6: maybe waking up and getting those costs down, because that
Speaker 6: could be a relegating factor.
Speaker 1: It seems well, we're gonna address whatever we think the
Speaker 1: limiting factor is at any point in time, so we
Speaker 1: would like to do the least amount possible, So we
Speaker 1: don't want to get into the mining or refining sector.
Speaker 2: We will do that if we have to.
Speaker 1: I do think the focus really should be on refining capacity.
Speaker 1: You know, we need to make just a very giant
Speaker 1: amount of anode cathode lithium, latinatruxide, liatin combinates. It's really
Speaker 1: the refining capacity that is the biggest choke point. Yeah,
Speaker 1: so that's that's why we're building a lithium refinery in
Speaker 1: Corpus Christy.
Speaker 8: In terms of the mining companies that are out there,
Speaker 8: uh and looking at that part of the value chain.
Speaker 8: And so we do have large suppliers of lithium right
Speaker 8: now and they are aware of you know, how we're
Speaker 8: approaching the Corpus refinery and the technologies we're trying there.
Speaker 8: And the reason we're making them aware of it is
Speaker 8: because we think they're fundamentally more scalable. And as we
Speaker 8: prove them out, we plan to share that with them because,
Speaker 8: as Elon says, like, it's not really like we want
Speaker 8: to do these things. We're doing them because it's not
Speaker 8: happening fast enough. So if we can prove that it
Speaker 8: can be done faster, the intention is to transfer that
Speaker 8: knowledge to our large our current suppliers, and the same
Speaker 8: is actually true. It was actually a clay process that
Speaker 8: we were playing with and we continue to work on
Speaker 8: the same is true on that. So we've worked with
Speaker 8: our suppliers as well on trials and we're sharing knowledge
Speaker 8: there and the intention is just to help the whole
Speaker 8: world do this better. And ultimately this here is getting
Speaker 8: the lithium or whatever it is out of the order.
Speaker 1: And we're obviously building a cathode processing facility just adjacent
Speaker 1: to this building. So a little further down the road
Speaker 1: you'll see another large construction that's for cathode refining. But
Speaker 1: like I said, we'd really prefer if others did that.
Speaker 1: We're doing it because we have to, because we want to.
Speaker 8: Yeah, And in that case, there just isn't really any
Speaker 8: large scale cathode production in the United States and it
Speaker 8: needed to be done. And again, if we're going to
Speaker 8: do it, we're going to try to do it from
Speaker 8: a first principles perspective. So we have tried a bunch
Speaker 8: of new things there. We're confident that they will work,
Speaker 8: and as they prove out again, we want to bring
Speaker 8: them back to our supplier so they can build new
Speaker 8: facilities more quickly with less investment.
Speaker 2: Right, let's go to ben Hi ben Cala for bair.
Speaker 9: So similar On the renewable side, Is there more that
Speaker 9: you can do in Tesla to nudge the rest of
Speaker 9: the renewable industry to speed up since it's such a
Speaker 9: big a pillar of the master plan Three?
Speaker 1: Well, I mean, I don't know more we can do,
Speaker 1: but I can say that if there's like entrepreneurs out
Speaker 1: there that wanted to have like a guaranteed chance of success,
Speaker 1: it would be refining lithium or anode and cathodes or
Speaker 1: any any materials whatsoever for uh leathium on cells as
Speaker 1: no brainer.
Speaker 9: Yep.
Speaker 2: I think we're doing everything we can. So yeah.
Speaker 8: On the on the reneable energy thing, the thing that
Speaker 8: we can do Tesla is the more we reduce the
Speaker 8: cost of storage, the more we reduce the cost of
Speaker 8: stationary storage, and the more we bring like flexible load
Speaker 8: to the grid in the form of like cars charging
Speaker 8: at the right times, the more valuable renewables are. Because
Speaker 8: in like Texas right now, I wasn't joking like that's
Speaker 8: off or whatever. So so bringing really low cost storage
Speaker 8: onto the grid makes renewables more valuable. Which ultimately will
Speaker 8: accelerate their deployment. So that's how we focus on it.
Speaker 2: I guess.
Speaker 10: Felippe, thank you. It's Sidi Bouscher Jeffries. I've got two questions.
Speaker 10: The first one, when I think about in this industry,
Speaker 10: everybody wants to be Tesla. Every comic er is trying
Speaker 10: to emulate what you're doing well done. The one thing
Speaker 10: they don't do is focus on having as much growth
Speaker 10: as possible with as hew models as possible. So I'm
Speaker 10: just trying to understand, as you aim for twenty million
Speaker 10: units in twenty thirty, how many models do you think
Speaker 10: you need to get there, and how does it fit
Speaker 10: into your drive to hyper scale?
Speaker 2: How do you manage this?
Speaker 10: And also the fact that probably consumers at some point
Speaker 10: I don't want to see your tests out the same
Speaker 10: test at every street corner, So I'm just trying to
Speaker 10: get your your sense of that.
Speaker 2: And my other question is on.
Speaker 10: Bidirectional I mean, you talked a lot about making you
Speaker 10: know a world more renewables and better use it of cars.
Speaker 10: I think bidirectional charging is one way of better using cars,
Speaker 10: but you seem to have been reluctant about doing that
Speaker 10: in the past, so I'm just wondering what your latest
Speaker 10: views are on the topic.
Speaker 8: Sure, on bi directional it it wasn't like a conscious
Speaker 8: decision to not do it. It just wasn't a priority
Speaker 8: at the time. I think is maybe the way to
Speaker 8: think about it. As we looked, as we continue to
Speaker 8: improve the para electronics in our vehicle, we've found ways
Speaker 8: to bring brighter actionality while actually reducing costs of para
Speaker 8: electronics in the vehicle. And at allten Tesla, the goal
Speaker 8: is usually to get more for less, and so we
Speaker 8: are in the middle of kind of like a power
Speaker 8: electronics retool. I would say that we'll bring that functionality
Speaker 8: to all of our vehicles over the next you know,
Speaker 8: two years, let's say.
Speaker 2: But but it's.
Speaker 8: Yeah, I guess that's how I'll say there.
Speaker 1: I don't think very many people are going to use
Speaker 1: my directional charging unless you have a power wall, because
Speaker 1: if you unplug your car, your house goes dark and
Speaker 1: this is extremely inconvenient.
Speaker 8: Yeah, most of the value it comes in charging the
Speaker 8: car at the right time. It's not really about sending
Speaker 8: energy the other way.
Speaker 2: Yeah.
Speaker 1: I mean, if if you have a power wall that
Speaker 1: can take the house load then you can use your
Speaker 1: car as supple as a supplementary energy source to the
Speaker 1: power wall, and then you know you're not gonna drive
Speaker 1: one crazy by unplugging your car and having the house goal.
Speaker 2: So I think there's some value there as.
Speaker 1: A supplemental energy source down the road where if you
Speaker 1: have a power wall.
Speaker 2: You've not diminished the convenience of the people in the house.
Speaker 11: And the question of number of models, how many models?
Speaker 1: But if not that many, I'm really ten, I don't know,
Speaker 1: not that many. There's I mean what's happened with the
Speaker 1: conventional cars is people have run out of things to do.
Speaker 1: So if you run out of things to do, they
Speaker 1: just end up reshuffling the deck and you have pretty
Speaker 1: much the same. I mean, how many variants of a
Speaker 1: car are there on the road. There's like hundreds. But
Speaker 1: there are they good variants? No, mostly not. They're just
Speaker 1: variants for the sake of variance. But look at how
Speaker 1: have things converged with the phone. I mean, there used
Speaker 1: to be hundreds of flip phones.
Speaker 2: Now what do we have? It'll be like that.
Speaker 12: George George Genericas from Cannon Coordenuity just had a question
Speaker 12: about your plans to grow market share in China, and
Speaker 12: also whether or not the political tensions between the United
Speaker 12: States and China impact your long term ambitions there.
Speaker 2: Thank you. I don't know, Hey, Tom Nott, do don't
Speaker 2: don't swear too hard.
Speaker 13: Yeah, well, we're still growing up our markets here in
Speaker 13: China quite strongly, actually, especially you know early this year
Speaker 13: we had this price adjustment. After that we actually generated
Speaker 13: a huge demand more then we can produce. Really, and
Speaker 13: as Elon said, as long as you're offer a product
Speaker 13: with value at affordable price, you know, you don't have
Speaker 13: to worry about demand. That's basically the philosophy that we
Speaker 13: we follow. We try everything to cut cost from supply chain,
Speaker 13: from improve the efficiency in the factory, and to pass
Speaker 13: down that value to our customers. I think you as
Speaker 13: long as we'll continue to do that, I'm not too
Speaker 13: concerned about the market share in China. In the second part, Geopolic,
Speaker 13: no one else.
Speaker 2: We do our best.
Speaker 13: We we we actually create a lot of jobs to
Speaker 13: look low community, and we tender also.
Speaker 2: With at our suppliers.
Speaker 13: Factories will create a lot of jobs as well, and
Speaker 13: we'll contribute with a lot of to the local economy.
Speaker 13: I think you know, as long as we're needed in
Speaker 13: this country. I don't see there much.
Speaker 11: Of the risk of that, Colin, Colin Rush from Oppenheimer.
Speaker 11: You know, one of the things I was struck by
Speaker 11: in the presentation was the operational efficiency metrics that you
Speaker 11: guys are talking about. Could you talk a little bit
Speaker 11: about the velocity of learning cycles and how you guys
Speaker 11: track that and think about that as an organization as
Speaker 11: you work into a variety of other areas from a
Speaker 11: innovation perspective, if anyone wanted to try that, I.
Speaker 8: Mean, I'll say one very high level thing, which is
Speaker 8: you can't improve something you don't measure. And we're like
Speaker 8: ruthless measurers at Tesla, and once you start measuring things
Speaker 8: that contribute to operational efficiency, you actually have a path
Speaker 8: to doing something about it. So I guess the key
Speaker 8: is a good measuring stick.
Speaker 1: Okay, it's something I should say with respect to demand,
Speaker 1: which I've said a few times over the years, but
Speaker 1: it sometimes it needs to be set again, which is.
Speaker 2: The overwhelmingly the uh.
Speaker 1: There's the desire for people to own a Tesla is
Speaker 1: extremely high. The limiting factor is their ability to pay
Speaker 1: for a tesla, not do they want to eat Tesla.
Speaker 1: It's easy for people in this room to lose sight
Speaker 1: of that. If your income is far in excess of
Speaker 1: what a car costs, then you look at value for money,
Speaker 1: but you do not consider affordability. But for the vast
Speaker 1: majority of people it is affordability driven. This is why
Speaker 1: we cannot simply double the price of the car. Or
Speaker 1: you could say and think about things in the limit
Speaker 1: where if you hadn't you know, an infinitely desirable car,
Speaker 1: but it costs ten million dollars, it wouldn't matter because
Speaker 1: people can Most people do not have that, So demand
Speaker 1: is very much a function of affordability, not desire. Very important.
Speaker 1: One of the things we weren't sure about was the
Speaker 1: price elasticity of demand for Tesla's, so like, as we
Speaker 1: lower the price, how much does demand increase? And we
Speaker 1: found that even small changes in the price have a
Speaker 1: big effect on demand, very big. So that was a
Speaker 1: good thing to learn. Yeah, and then this autonomy question.
Speaker 2: Is very very big.
Speaker 1: Because it could potentially have I don't know, five times
Speaker 1: the utility of the asset that you currently have.
Speaker 2: So passenger car.
Speaker 1: Is ten or twelve hours a week of usage plus
Speaker 1: a lot of parking expenses, an autonomous car could be
Speaker 1: fifty sixty hours a week or something like that, and
Speaker 1: you could get rid of a lot of parking expenses.
Speaker 1: So you know, if this, if this is true, then
Speaker 1: as autonomy is effectively turned on for the fleet, it
Speaker 1: may be that it probably will be the biggest asset
Speaker 1: value increase in history overnight, Emmanuel, Thank you so much.
Speaker 14: Emanuel Raznov from Deutsche Bank. So, as you start launching
Speaker 14: this next generation vehicle and ramping up volume, what will
Speaker 14: be your nearest term priority in terms of segment or
Speaker 14: vehicles focus. The slide that you showed with two vehicles
Speaker 14: under wrap seemed based on form factor one of them
Speaker 14: maybe he looks like a van, another one looks like
Speaker 14: maybe like a smaller vehicle, like potentially a model. To
Speaker 14: what is the nearest focus for you in terms of
Speaker 14: ramping up the next gen vehicle and how do you
Speaker 14: make sure that by lowering the price point so much,
Speaker 14: because the costs is going down fifty percent, you're not
Speaker 14: cannibalizing demand, you know for your existing vehicles, I mean
Speaker 14: demand for our vehicles in terms of desire to own
Speaker 14: them may as well be infinite. It's indistinguishable from infinite
Speaker 14: at this point, affordability is what matters. So as you
Speaker 14: make the car more affordable, we will have demand go crazy. Basically,
Speaker 14: the issue is how do we build the cars. The
Speaker 14: hard part is building the cars. I can't emphasize that enough.
Speaker 14: The hard part is building the cars and the entire
Speaker 14: supply chain that goes with the cars.
Speaker 9: This is a.
Speaker 1: Logistics challenge of extraordinary difficulty. All the things that have
Speaker 1: to go into the car have to scale with the
Speaker 1: car while everything is doing an exponential ramp. And if
Speaker 1: you miss even one of those things doesn't matter. Why earthquake,
Speaker 1: flood fire, revolution, I thought I've heard them all.
Speaker 2: I mean, it's.
Speaker 1: Any part of that supply chain gets interrupted, you're now
Speaker 1: then you have a seizure. The hard part is building
Speaker 1: the cars, by far, and the supply chain that goes
Speaker 1: with it. You guys want to talk about the supply
Speaker 1: chains though, yeah they might, I think, you know.
Speaker 15: And the presentation I'd mentioned perfection is a passing great.
Speaker 15: We really need everything to happen perfectly, and the strategy
Speaker 15: for mitigating the different risks, some of which were anticipated
Speaker 15: and some weren't, is really bespoke to the situation. And
Speaker 15: then really the unique subject matter expertise and a deep
Speaker 15: knowledge of the particular supply chain you're managing to come
Speaker 15: up with those strategies. So we've seen everything from as
Speaker 15: Elon mentioned, you know, first the tariffs that flew back
Speaker 15: and forth, then the ocean logistics issue, a chip shortage,
Speaker 15: COVID floods, there was a fire and a fab in
Speaker 15: Japan that knocked down. There was a massive COVID spike
Speaker 15: in Malaysia where a lot of the chips to the
Speaker 15: back end of a lot of chips was down there.
Speaker 15: In more, this was one that Elon was involved with
Speaker 15: as well. And yeah, that's it's nerve wracking, but somehow
Speaker 15: it works.
Speaker 7: Yeah, and although it is difficult, I think we have
Speaker 7: been laying the foundation to be as intimate to all
Speaker 7: the tiers of the supply chain, building that control and
Speaker 7: you know, directing the different tiers of supply chain. That's
Speaker 7: the way we are trying to make it. The risks
Speaker 7: that come with it, you know, again, dual sourcing, triple sourcing,
Speaker 7: having redundancy is the way we've been trying to mitigate
Speaker 7: for it.
Speaker 2: Yeah.
Speaker 4: On that point, when we think about vehicles, when you
Speaker 4: think about three y as an architecture SX as an architecture,
Speaker 4: our next generation platform is more than one segment, and
Speaker 4: really we're thinking about all the segments that are available
Speaker 4: that we haven't captured and where the market would be
Speaker 4: and designing it with our supply chain partners so that
Speaker 4: we can go quickly through those segments for where we need.
Speaker 4: But to Elon's point, if you make a car desirable
Speaker 4: and affordable, you know, oftentimes it doesn't necessarily matter what
Speaker 4: segment it's in because it's one that you want. And
Speaker 4: we've seen that with Model three when a lot of
Speaker 4: people thought that sedan was not going to be a
Speaker 4: great hit, but we sell tons of them. So the
Speaker 4: next generation platform is not one vehicle, it is multiple,
Speaker 4: and it's on the segment that we will, you know,
Speaker 4: really try and focus on that affordability and desira ability
Speaker 4: point more over than where we start it.
Speaker 1: Yeah, I mean there's like, I think it's an old saying,
Speaker 1: like battles the one with tactics or is the one
Speaker 1: with logistics. The logistics challenges here are enormous, and when
Speaker 1: you start like being a very significant percentage of an industry,
Speaker 1: you can't overcapacitize. It's not realistic, and some of these
Speaker 1: things like you say, like well you dual source or
Speaker 1: triple source. You can do that maybe for small things,
Speaker 1: but you can't do it for big things because if
Speaker 1: you're if you're triple sourced and one of it's like
Speaker 1: having a plane with three engines, where if any of
Speaker 1: the three engines fails, you crash.
Speaker 2: It's like, you know, so.
Speaker 1: You have to eat the overcapacitizes, which drives your cafex
Speaker 1: up and it has idle suppliers somewhere and big warehouses,
Speaker 1: or you're designed to some overage that's you know, reasonable,
Speaker 1: and then you have expedite costs because inevitably there's something
Speaker 1: goes wrong somewhere and you've got to fly things around.
Speaker 1: So it's really just the rate of progress is the
Speaker 1: rate of which we are able to scale a ten
Speaker 1: thousand logistics problems.
Speaker 2: The most significant of those is the.
Speaker 1: Cell production, and so we actually liberately try to overdo
Speaker 1: cell production or self supply.
Speaker 2: To have that exceed what is needed in vehicles.
Speaker 1: Because if it goes below what's needed in vehicles, then
Speaker 1: with the factories stall. But then what do you do
Speaker 1: with all these extra cells? It's like, well, okay, so
Speaker 1: the much easier thing to scale up and down is
Speaker 1: is powerwall and megapac output stationary storage. So we can
Speaker 1: then overcapacities and sells and packs and scale production of
Speaker 1: stationary storage, which is much easier to scale than vehicle production.
Speaker 2: So that's strategically, I think, a good thing.
Speaker 1: Yeah, I mean the capex for megapac is tiny compared
Speaker 1: to capex for vehicles.
Speaker 2: And also megapac demand is quasi infinite.
Speaker 1: It basically as long as we are competitive with utilities,
Speaker 1: we can sell as many like it's yeah, quasi infinite
Speaker 1: demand for that really for multi tier many Taro White hours,
Speaker 1: and we got a long way to go to get
Speaker 1: to many Taro White hours per year.
Speaker 2: Then let's go to down.
Speaker 16: Thank you, Dan Leevy Barclays. I think we know competitive
Speaker 16: dynamics differ significantly by region. Cost dynamics different by region.
Speaker 16: We saw that with your China Giga factory, far superior
Speaker 16: cost to what you had for a month I realized
Speaker 16: it was a new factory. But uh, they're clearly different dynamics.
Speaker 16: So to what extent are the cost strategies that you've
Speaker 16: laid out today, Do they differ by region or or
Speaker 16: is there more of a global, one size fits all
Speaker 16: approach on reducing costs?
Speaker 13: Yeah, I think we're pretty consistent under the strategy here.
Speaker 13: We'll try it as as much localized as possible. Like
Speaker 13: in China, ninety five percent over ninety five percent of
Speaker 13: our supplying are localized all the way from a first
Speaker 13: tier to secondarium that the third tier, and that gives
Speaker 13: us general detrimentous savings on cocks. And we also have
Speaker 13: a very localized labor force, and we have access to
Speaker 13: scale the labor force in the region and Young's adulta
Speaker 13: region in Shanghai, and particularly referring to and among over
Speaker 13: thirty thousands of employees in China, we have probably less
Speaker 13: than twenty expats. So it's uh very deep localization we
Speaker 13: have done there to be able to have such cost structure,
Speaker 13: and we try to replicate this approach elsewhere and in
Speaker 13: different give factories. Of course, you know the supplier base
Speaker 13: that are different, the you know, labor market are different
Speaker 13: region by region, the country back country, but which are our.
Speaker 2: Best to to localize.
Speaker 16: Yeah, and and.
Speaker 2: I think that's that's absolutely.
Speaker 13: Give us advantage to compete with the all the ms
Speaker 13: around the globe. Another thing is you know, we have
Speaker 13: this direct selling mode like Zach's that you know will
Speaker 13: save with tremendous money on op acces as well. We
Speaker 13: have food controller all expenditures across the the company, and
Speaker 13: you know we don't spend money on marketing or advertising.
Speaker 13: Everything we saved and will become you know, the value
Speaker 13: we can offer to the consumers. So that part, on
Speaker 13: that part, we also followed pretty consistent strategy over the years.
Speaker 4: I mean, certainly the manufacturing stuff that Colin Pete and
Speaker 4: myself talked about, whether you make it here, you make
Speaker 4: it in Europe, or you make it in Asia, it
Speaker 4: applies everywhere. We think about that from the ground up,
Speaker 4: not not specific to any region.
Speaker 17: Yeah, just one thing I would add to Tom's point
Speaker 17: about localization and to Lars's point here, I would actually
Speaker 17: say that we're moving in a direction of more standardization
Speaker 17: in terms of our factories and our processes and our
Speaker 17: cost reduction approaches. So as we've been thinking about the
Speaker 17: next generation platform, we've been thinking about the volume that
Speaker 17: we aspire to build against that. How many individual factories
Speaker 17: do we need to build and what is the fastest
Speaker 17: possible way to expand that footprint around the world. What
Speaker 17: we've done with Model why is each factory is an
Speaker 17: incremental improvement of the previous factory, which requires engineering hours
Speaker 17: engineering spend for each factory design, and then you end
Speaker 17: up with factories that are slightly different from each other.
Speaker 17: And as we move towards the next generation platform, I
Speaker 17: think the term you use, Lars is copy paste, so
Speaker 17: to get it right from the first time, you know,
Speaker 17: certainly there will be things that we learn and we
Speaker 17: replicate and we make adjustments to but try to have
Speaker 17: as much standardization and commonization as possible which allows us
Speaker 17: to go as quickly as possible with expansion.
Speaker 2: O raka.
Speaker 18: On the sides, thanks Two questions, once for Zak one
Speaker 18: flush self for Zach. How do you think about the
Speaker 18: long term growth and operating margins for the business And
Speaker 18: when we look at one hundred and fifty one hundred
Speaker 18: and seventy five billion in capex as the remaining balance
Speaker 18: of that is that essentially the capex guidance through twenty
Speaker 18: thirty for a shock the multi trip reconstruction that you highlighted,
Speaker 18: how is that different from what mobil eyed does with
Speaker 18: the IRAM map that they have And can you give
Speaker 18: us any color on the AP four hardware.
Speaker 17: So with respect to operating margins, you know, we intend
Speaker 17: to continue to improve operating expenses as a percentage of
Speaker 17: revenue over time, and we're continuing to take cost out
Speaker 17: of our products and try to keep gross margins in
Speaker 17: a place that's healthy as well. And so you know,
Speaker 17: from the hardware perspective of the business, you know, it's
Speaker 17: our expectation that will continue to stay in a healthy
Speaker 17: place over time. And then there's a software portion that's
Speaker 17: added on top of that. And so Elan has commented
Speaker 17: on this many times about the impact that full self
Speaker 17: driving software can have on the economics of the business,
Speaker 17: and in that space, you know, profitability operating margins would
Speaker 17: be impacted dramatically. Specifically to your point about CAPEX guidance,
Speaker 17: you know, the intent of that slide was not to
Speaker 17: provide specific guidance, but to just be transparent about internally
Speaker 17: what our rough estimates are and to provide context that
Speaker 17: we think getting to twenty million vehicles per year in
Speaker 17: one taara what hour of energy storage is very feasible
Speaker 17: relative to our expected cash generation for the business. That's
Speaker 17: a number that we'll move as we learn. We may
Speaker 17: choose to vertically integrate more into things, we may find
Speaker 17: efficiencies elsewhere. To the whole conversation we were having earlier
Speaker 17: about do we do mining, do we not do mining,
Speaker 17: But the entire point is to say that this is
Speaker 17: something that's entirely possible based upon our.
Speaker 19: Forecast regarding the monkey to preconstruction. My point I was
Speaker 19: trying to make was that we want to auto label
Speaker 19: most of the data, and we can collect data from
Speaker 19: the fleet and then reconstruct local areas that can act
Speaker 19: ass supervision for those clips. Since we want to build
Speaker 19: a scalable self driving system, we don't want to really
Speaker 19: relay on stamps or anything, even though we could really
Speaker 19: build something using the same technology. But this is mostly
Speaker 19: for auto labeling, and this provides like precise three D
Speaker 19: labels for all the video sequences involved in the reconstruction.
Speaker 1: It's something that's I don't know if we touched on
Speaker 1: this much. But in terms of training, we have one
Speaker 1: of the biggest neural net training systems in the world,
Speaker 1: and that we expect to increase that capablely by an
Speaker 1: order of magnitude by the end of this year and
Speaker 1: probably another order of magnitude by the end of next
Speaker 1: year with some combination of Invidia and Dojo. So like
Speaker 1: much of the scale of that is quite going down people,
Speaker 1: and it's enormous.
Speaker 5: Maybe the final two questions one from Alex and one
Speaker 5: from Chris.
Speaker 20: Okay, Alex Potter with Piper, So I definitely want to
Speaker 20: ask Drew or anybody else up there for an update
Speaker 20: on dry battery electrode. Right, So, if you're gonna try
Speaker 20: to overcapacitize towards cells scale a lot of this Clearly,
Speaker 20: there's a lot of moving pieces and it's a complex
Speaker 20: sort of orchestra with the supply chain, but a lot
Speaker 20: of it comes down to dry battery electrode, at least
Speaker 20: to me.
Speaker 2: So how are you trending?
Speaker 20: That was the most fascinating part of the factory tour
Speaker 20: for me, and looking through that window and seeing that
Speaker 20: this is clearly not a science project, but anything that
Speaker 20: you're willing to disclose yields progress where you are today
Speaker 20: versus where you thought you were going to be. Yeah, thanks, right.
Speaker 8: Uh yeah, I mean as you saw right, Like it's
Speaker 8: this is this is a real factory making a lot
Speaker 8: of dry electrode in an automated fashion. We've made a
Speaker 8: lot of progress. Uh, it's it's a it's a spectrum.
Speaker 8: Like we we're perfectionists, and we we have clear end
Speaker 8: goals and we are every week that goes by making
Speaker 8: progress towards those end goals, whether it's speed of the tool,
Speaker 8: yield of the of that process, or the downstream process.
Speaker 8: We we haven't stalled out yet on the rate of
Speaker 8: progress either, and that's both on the eNode and the
Speaker 8: cathode side. And I think the great thing about where
Speaker 8: we are with the overcapacity that Elon mentioned is it's
Speaker 8: giving us the opportunity to experiment as we go rather
Speaker 8: than just being like stuck to something that we happen
Speaker 8: to kick off a year and a half ago. And
Speaker 8: it is here something that Elon has said to the
Speaker 8: team many times is so okay to scrap equipment or money,
Speaker 8: it's not okay to scrap time. So the way we've
Speaker 8: been approaching it is probabilistically, what do we think is
Speaker 8: the most likely thing to succeed. And even actually in
Speaker 8: the factory here you saw more than one anode line
Speaker 8: that they are actually operating two slightly different versions of
Speaker 8: the final process step of the powder entering the tool,
Speaker 8: and it's a competition, you know, which is going to
Speaker 8: be more higher yield, which is going to perform better,
Speaker 8: And we have the luxury to be able to do that,
Speaker 8: and we're taking full advantage of it to advance the
Speaker 8: technology as quickly as possible.
Speaker 2: The dir electrode problem is really quite a hard problem.
Speaker 1: I mean, we acquired Maxwell really just for the dry
Speaker 1: electrode technology, but just illustrates what a gigantic gap there
Speaker 1: is between something working at small scale and at large scale.
Speaker 2: And we've had a an.
Speaker 1: Extremely talented team of engineers working on scaling the dry
Speaker 1: electrode process and having to be reliable, consistent, and we've
Speaker 1: been grinding hard, literally and figuratively on this for quite
Speaker 1: a while. It seems likely that we will be able
Speaker 1: to scale it to volume this year.
Speaker 8: Yeah, I mean we're we're basically increasing the output week
Speaker 8: over week, like roughly one k week per quarters our
Speaker 8: internal target, and we're you know, we're tracking to that.
Speaker 8: I think the what you saw is effectively like a
Speaker 8: ton of material per hour per tool. It's kind of
Speaker 8: like hard to like rationalize like what that really means,
Speaker 8: but it's it's it is. It's different than like, oh,
Speaker 8: something works in a lab, it's like, well, when it's
Speaker 8: tons of material per hour, there's just different kinds of problem.
Speaker 8: Like even if you have zero point one percent escape
Speaker 8: of like finds into the enclosure that your equipment is in,
Speaker 8: now you have a dust problem and like that could
Speaker 8: short out some electronics. It's like just things like this
Speaker 8: where when you're on a lab scale you don't even
Speaker 8: notice it, but when you're doing thousands of tons over
Speaker 8: the course of months, it's like, oh, a new failure
Speaker 8: mode we found, and that's where we're at. But we're
Speaker 8: we're knocking those out though, and the team is grinding
Speaker 8: through it, but progress every week.
Speaker 5: And the last question from Chris, Thanks for taking a question.
Speaker 5: I have a few follow ups on the next gen vehicle. First,
Speaker 5: when do you think we'll get a look at it?
Speaker 5: Maybe a prototype? Second, are there any details that you
Speaker 5: think you can share in terms of the size, the content,
Speaker 5: the performance. And Then third, I think you mentioned that
Speaker 5: you would produce it in other plants in addition to Mexico.
Speaker 5: Should we take that to mean that you can launch
Speaker 5: it at an existing plant before you're finished constructing the
Speaker 5: new plant in Mexico.
Speaker 1: I think we'll actually have to probably decline that answer.
Speaker 1: We will have a proper sort of product event, but
Speaker 1: we would be jumping the gun if we were to
Speaker 1: answer your questions. Maybe another question if this yeah, yeah,
Speaker 1: I don't know anyone.
Speaker 5: Will willed enough.
Speaker 2: I have two questions.
Speaker 21: This has really been a very impressive afternoon.
Speaker 2: Thank you so much.
Speaker 9: Elon.
Speaker 21: I'm curious, as you've doubled and you'll double again, how
Speaker 21: what you've learned about sort of managing a larger enterprise
Speaker 21: and what you might have to you know, do to
Speaker 21: manage a bigger enterprise. And then secondly, I'm curious on
Speaker 21: your thoughts on how you know generative AI and you
Speaker 21: know these rapid breakthroughs in AI in the last months
Speaker 21: could help you make cars sort of you know, less
Speaker 21: hard to make.
Speaker 2: Thank you.
Speaker 1: I don't see AI helping us make cars anytime soon
Speaker 1: at that point, I mean, at no point in any
Speaker 1: of us working anything big problems, So we'll just chill out.
Speaker 1: I mean, I'm a little worried about the AI stuff.
Speaker 1: I think it's uh something I don't know which we
Speaker 1: should be concerned about.
Speaker 2: Uh, I don't know.
Speaker 1: I think we should need some kind of like regulatory
Speaker 1: authority or something that's overseeing AI development and just making
Speaker 1: sure that it's operating within the public interests. And you know,
Speaker 1: it's quite a dangerous, quite a dangerous technology, and I
Speaker 1: I fear I may have done some things to accelerate it,
Speaker 1: which is I don't know. So, I mean, some of
Speaker 1: the AI stuff I think is just obviously useful, like
Speaker 1: what we're doing with self driving, which is you know,
Speaker 1: some people think is an AGI type problem. I don't
Speaker 1: think it's quite an a GI problem, but it's certainly
Speaker 1: requires very sophisticated neural nets because the road system is
Speaker 1: designed for eyes and biological neural nets, so naturally the
Speaker 1: analog to that is.
Speaker 2: Cameras with digital neural nets.
Speaker 1: And yeah, the thing we've we found is just there's
Speaker 1: a sick if you actually look at our neural net
Speaker 1: architecture in the carts, kind of insane, frankly, nets upon
Speaker 1: nets upon nets upon.
Speaker 19: That's the visualization toold crashes open. Yeah, it's like so
Speaker 19: complicated that no one can misulace this right now.
Speaker 1: Yeah, it's hard to visual just like literally it looks insane.
Speaker 1: So I guess something like that's happening in our brains
Speaker 1: while we drive around, which is pretty wild, So.
Speaker 2: You know, I don't know. I think Tesla's doing good
Speaker 2: things in AI. I don't know. This one stresses me out,
Speaker 2: so I don't know what to think you should say
Speaker 2: about it, you know.
Speaker 5: Okay, given it's seven o'clock, I think that's all the
Speaker 5: time we have. Thank you very much for coming and
Speaker 5: se