Latest / Elon Musk Podcast / Tesla Q1 2025 Financial Results and Q&A Webcast

Transcript

Tesla Q1 2025 Financial Results and Q&A Webcast · Elon Musk Podcast

• 0:01
  Hi, everybody. Welcome back to the show.
• 0:03
  This is stage 0. My name is Will Walden.
• 0:06
  I'm your host. And in today's episode, we're
• 0:09
  going to be showing you a clip of Donald Trump and Elon Musk.
• 0:13
  Now, Elon, in this clip explains how Doge is doing and what
• 0:17
  they've done to uncover some secrets and some fraud and how
• 0:21
  much money they've recovered for the government.
• 0:24
  And then after that, it's Donald Trump explaining to his cabinet
• 0:29
  how he views Elon Musk. Now, the second or the first
• 0:35
  part of this shows that Donald Trump doesn't.
• 0:41
  I think he likes him in a way like he likes him as a person.
• 0:44
  But he says something that you'll find a little bit, I
• 0:50
  wouldn't say shocking, but it's something that we didn't expect
• 0:53
  over here at Stage Zero. And that is that he says that he
• 0:56
  doesn't really need Elon. And you'll listen to the clip
• 1:00
  and then let me know in the comments if you have comments on
• 1:03
  your podcast platform. If you don't have comments on
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  your podcast platform, you can go to our YouTube channel, Stage
• 1:09
  0 News. And we're going to be discussing
• 1:12
  this over there in a future video as well.
• 1:15
  So go over there, subscribe to that.
• 1:18
  And also, when you have a second, I just need one second
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  single episode better and better every single time.
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  And most of these episodes are going to be 5 minutes or 10
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  minutes, somewhere in that range.
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  your day. So please give me a second of
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  your time. I'll give you 10 years of mine.
• 1:56
  All right, here's Elon talking to Trump's cabinet and then
• 2:01
  Trump talking about Elon. Notice what Trump says about
• 2:05
  Elon. Good afternoon, everyone, and
• 2:08
  welcome to Tesla's first quarter 2025 Q&A webcast.
• 2:12
  My name is Travis Axelrod, Head Investor Relations and I'm
• 2:15
  joined today by Elon Musk, Deva Taneja and a number of other
• 2:19
  executives. Our Q1 results were announced at
• 2:21
  about 3:00 PM Central Time in the update deck being published
• 2:24
  of the same link as this webcast.
• 2:27
  During this call, we will discuss our business outlook and
• 2:29
  make forward-looking statements. These comments are based on our
• 2:32
  predictions and expectations as of today.
• 2:35
  Actual events or results could differ materially to a number
• 2:38
  due to a number of risks and uncertainties including those
• 2:41
  mentioned in our most recent filings with the SEC.
• 2:44
  During the question and answer portion of today's call, please
• 2:46
  limit yourself to one question and one follow up.
• 2:49
  Please use the Raise Hand button to join the question queue.
• 2:53
  Before we jump into Q&A, Elon will be providing an update.
• 2:56
  Elon. Hello everyone.
• 2:58
  Well, it's never a dull moment these days and thanks for sure
• 3:03
  every day is going to be exciting As some people know,
• 3:08
  there's been some blowback for the time that I've been spending
• 3:10
  in government with the Department of Government
• 3:12
  Efficiency or DOGE. I think the work that we're
• 3:16
  doing there is actually very important for trying to rein in
• 3:19
  the insane deficit that is leading our country, United
• 3:22
  States, to destruction. And the Doge team has made a lot
• 3:27
  of progress in addressing waste and fraud.
• 3:30
  The natural blowback from that is those who were receiving the
• 3:33
  wasteful dollars and the fortunate dollars will try to
• 3:38
  attack me and those team and anything associated with me.
• 3:44
  So but then I am really left with two choices.
• 3:47
  Should we just let the waste and fraud continue?
• 3:51
  And I was continuing at it to grow at a really unsustainable
• 3:54
  pace that was bankrupting the country or to fight the waste
• 4:00
  and fraud and try to get the country back on the right track.
• 4:03
  And I, I believe the right thing to do is to just fight the waste
• 4:08
  and fraud and get the country back on the right track and
• 4:12
  working together with the President Trump and his
• 4:14
  administration. Because if the ship of America
• 4:19
  goes down, we all go down with it, including Tesla and everyone
• 4:23
  else. So I think this is this critical
• 4:27
  work. Now, the protest that you'll see
• 4:30
  out there, they're very organized.
• 4:32
  They're paid for. They're they're obviously not
• 4:37
  going to say it meant that the reason that they're protesting
• 4:41
  is because they're receiving fraudulent money or that they're
• 4:47
  the recipients of wasteful digest, but they're going to
• 4:51
  think they come up with some other reason.
• 4:54
  But that is the the real reason for the protests.
• 4:57
  The actual reason is that is that those receiving the waste
• 5:02
  and fraud wish to continue receive receiving it.
• 5:05
  That is the real thing that's going on here, obviously.
• 5:10
  So now that said, I, I do think there's, you know, the, the,
• 5:17
  the, the large slug of work necessary to get the village
• 5:23
  team in place and working in the government to get the financial
• 5:29
  house in order is mostly done and I think.
• 5:40
  Starting probably in next month, May, my time allocation to DOGE
• 5:51
  will drop significantly. I'll have to continue doing it
• 5:54
  for, I think probably the remainder of the president's
• 5:58
  term just to make sure that the waste and fraud that we stop
• 6:03
  does not come roaring back, which we'll do if, if it has the
• 6:08
  chance. So.
• 6:12
  So I think I'll continue to spend, you know, a day or two
• 6:16
  per week on government matters or as long as the president
• 6:21
  would like me to do so and as long as it is useful.
• 6:26
  But starting next month, I will be allocating far more of my
• 6:32
  time to Tesla. And now that the the major work
• 6:38
  of establishing the Department of Government efficiency has
• 6:40
  done so at Tesla, we've gone through many, many a crisis over
• 6:49
  the years and actually been through many near to many near
• 6:55
  death experiences. Like we're probably we're on the
• 6:59
  rabbit edge of death at least and maybe a dozen times.
• 7:03
  It's been so, so many times. This is not one of those times.
• 7:08
  We're not on the rugged Japan, not even close.
• 7:12
  So, you know, there are some some challenges and I expect
• 7:19
  that this year will be there'll probably be some unexpected
• 7:23
  bumps this year. I remain extremely optimistic
• 7:29
  about the future of the company. The future of the company is
• 7:34
  fundamentally based on large scale autonomous cars and and
• 7:44
  large scale being large volume vast numbers of autonomous
• 7:48
  humanoid robots. So the the value of the company
• 7:58
  that makes truly useful autonomous humanoid robots and
• 8:03
  autonomous useful vehicles at scale at low cost, which is what
• 8:09
  Tesla is going to do is staggering.
• 8:14
  I continue to believe that Tesla with excellent execution will be
• 8:20
  the most valuable company in the world by far.
• 8:22
  But that's an important if we must execute well.
• 8:29
  But if we do execute well, I do, I think Tesla will be the most
• 8:36
  valuable company in the world by far.
• 8:38
  It may be as valuable as the next 5 companies combined.
• 8:42
  So there'll be a few bumps along the road before before that
• 8:50
  happens. I said I think on the last
• 8:53
  earnings call that you know the well we'll start to see the
• 9:01
  prosperity of autonomy take effect in a material way around
• 9:06
  the middle of next year. We still expect, we expect to
• 9:09
  have these be selling fully autonomous rights in June in
• 9:13
  Austin as as we've been saying we're now several months.
• 9:18
  So that that's continued. But the real question from
• 9:22
  financial standpoint is when does it really become material
• 9:25
  and affect the bottom line of the company and start to be a
• 9:30
  fundamental part of the, of the, of the, when does it move the
• 9:36
  financial needle in a significant way?
• 9:38
  That's probably around the middle of next year.
• 9:42
  So it can happen next year. And then once it does stop, move
• 9:46
  the move the financial needle in a significant way, it will
• 9:49
  really go exponential from there.
• 9:52
  So that's I'd encourage people to look beyond like the, you
• 9:57
  know, some sort of bumps and potholes of the road immediately
• 10:08
  ahead of us. Left your gaze to the bright
• 10:15
  shining, you know, citadel on a hill.
• 10:19
  I don't know some Reaganesque imagery and that's where we're
• 10:29
  headed and not, not, not too distant future like I said and
• 10:32
  the next year. So let's see with respect to
• 10:43
  supply chain risk, something that something that Tesla has
• 10:46
  been working on for several years is to localize supply
• 10:50
  chains does actually make sense from a cost standpoint, from A
• 10:56
  and from a logistics risk standpoint is to have the supply
• 11:03
  chains be at least located on the continent in which the car
• 11:06
  is built. And so we are the least
• 11:13
  accompanied, the least affected car company with respect to
• 11:18
  tariffs, at least in most respects.
• 11:20
  I mean, it remains to be seen. Now tariffs are still, yeah,
• 11:27
  tough on a company where margins are still low.
• 11:31
  But we, we do have localized supply chains in North America,
• 11:37
  Europe and China. So that's that puts us in a
• 11:42
  stronger position than any of our competitors.
• 11:57
  And undoubtedly I'm going to get a lot of questions about
• 11:59
  tariffs. And I, I just want to emphasize
• 12:02
  that this, this, the tariff decision is entirely up to the
• 12:05
  president of the United States. I will weigh in with my advice
• 12:09
  with the president, but he, he, he will listen to my advice, but
• 12:14
  then it's up to him, of course, to make his decision.
• 12:18
  I, I've been on the record many times as saying that I believe
• 12:22
  lower tariffs are generally a good idea for prosperity, but
• 12:27
  this decision is fundamentally up to the elected representative
• 12:29
  of the people being the president of the United States.
• 12:32
  So, you know, I'll continue to advocate for lower tariffs
• 12:38
  rather than higher tariffs, but that's all I can do.
• 12:42
  So now, now let me walk you through why I'm so excited about
• 12:47
  the future of Tesla. So first of all, autonomy, the
• 12:50
  team and I are laser focused on bringing robo taxi to Austin
• 12:53
  engineering unsupervised autonomy will first be solved
• 12:58
  for for for the model Y in in Austin.
• 13:07
  And then actually we should parse out the term robotic taxi
• 13:12
  or robo taxi and just generally like what's the the cyber cab?
• 13:15
  Because we've got a product called the cyber cab and then
• 13:18
  but any any Tesla which could be an S3X or Y that is autonomous
• 13:24
  is a robotic taxi or robotaxi. It's very confusing.
• 13:30
  So the vast majority of the Tesla fleet that we've made is
• 13:35
  capable of being a robotaxi or robotic taxi.
• 13:41
  And as we regarding from once we can make the halt the system
• 13:48
  work where you can have paid rides fully autonomously with no
• 13:51
  one in the car in in one city that that that is a very
• 13:57
  scalable thing for us to go broadly within whatever
• 14:01
  jurisdiction allows us to to operate.
• 14:04
  So because what we're solving for is a general solution to
• 14:08
  autonomy, not a city specific solution for autonomy.
• 14:14
  Once we make it work in a few cities, we can basically make it
• 14:17
  work in all cities in that in that legal jurisdiction.
• 14:22
  So if it's once we can make it based work in a few cities in
• 14:25
  America, we can make work anywhere in America.
• 14:30
  Once we can make work in a few studies in China, can make can
• 14:33
  work anywhere in China, likewise in Europe, limited only by
• 14:38
  regulatory approvals. So this is the advantage of
• 14:43
  having a generalized solution using artificial intelligence
• 14:49
  and the an AI chip that tells the design specifically for this
• 14:54
  purpose, as opposed to very expensive sensors and high
• 15:01
  precision maps of a particular neighborhood where that
• 15:04
  neighborhood may change or often changes and then the cost stops
• 15:08
  working. So we have a general solution
• 15:10
  instead of a specific solution. Yeah.
• 15:20
  And regards to optimists, making good progress on optimists, we
• 15:27
  expect to have thousands of optimists robots working in
• 15:34
  Tesla factories by the end of this year doing this for work.
• 15:41
  And we expect to scale optimists up faster than any product I
• 15:48
  think in history to get to millions of units per year as
• 15:54
  soon as possible. I I think feel confident in
• 15:58
  getting to 1,000,000 years per year in less than five years,
• 16:03
  maybe four years. So, but 20-30 I felt confident
• 16:13
  in predicting 1,000,000 Optimus units per year and it might be
• 16:17
  2029. So let's see with respect to
• 16:22
  energy, energy business is doing very well.
• 16:26
  The Megapack is enables utility companies to output far more
• 16:35
  total energy than would otherwise be the case.
• 16:39
  When you think of the the energy capability of a grid, it's much
• 16:44
  it's much more than it's a total energy output per year is.
• 16:50
  If power plants could operate at peak power for all 24 hours as
• 16:58
  opposed to being at half hour or sometimes 1/4 power at night,
• 17:03
  then you could double the energy output of existing power plants.
• 17:09
  But in order to do that, you need to buffer the energy so
• 17:12
  that you can charge up the something like battery pack at
• 17:15
  night and then discharge into the grid during the day.
• 17:19
  So this is a a massive unlock on total energy output of any given
• 17:28
  grid over the course of a year. And utility companies are
• 17:33
  beginning to realize this and are buying in our megapacks at
• 17:37
  scale. So at this point, a GW class
• 17:42
  factory is quite a common thing. So with many orders in the offer
• 17:48
  for GW and beyond batteries and we expect the energy, the
• 17:56
  stationary energy storage business to scale ultimately to
• 17:58
  terawatts per year. So very, very good numbers.
• 18:08
  Now Q1, you know, first quarters of a year are usually pretty
• 18:13
  tricky because it's usually the worst quarter of the year
• 18:17
  because people don't want to go buy a car in the middle of
• 18:21
  winter during a Blizzard. So, and this so we picked Q1 as
• 18:29
  like a good quarter to do a cut over to the new version of the
• 18:35
  Model Y and we changed production of the world's best
• 18:39
  selling cars. Worth remembering the Model Y is
• 18:41
  the best selling car of any kind on earth with a 1.1 billion unit
• 18:47
  per year output of a single model.
• 18:51
  And we did this changeover at the same time in factories all
• 18:54
  across the world. So congratulations to the Tesla
• 18:57
  team on an amazing job in pulling off what is a very
• 19:00
  difficult transition. So yeah, it's a, it's really
• 19:08
  that was very impressive work. So yeah, in conclusion, while
• 19:19
  there are many near term headwinds for us in the border
• 19:21
  industry, the future for Tesla is brighter than ever.
• 19:27
  The value of the company is delivering sustainable abundance
• 19:30
  with our affordable AI powered robots.
• 19:33
  So this, this, I like this phrase, sustainable abundance
• 19:40
  for all. If you say like, what's the
• 19:44
  ideal future that you can imagine, that's what you'd want.
• 19:47
  You'd want abundance for all in a way that's sustainable.
• 19:53
  It's good for the environment. Basically, this is the happy
• 19:57
  future. If you say what's, what's the
• 19:59
  happiest future you can imagine? One which is that would be a
• 20:03
  future where there's sustainable abundance for all.
• 20:06
  Closest thing to heaven we can get on earth, basically.
• 20:13
  So thank you again to the Tesla team for all their efforts of
• 20:18
  the challenging time and look forward to continuing to lead
• 20:22
  the team to great success in the future.
• 20:29
  Great. Thank you very much, Elon.
• 20:31
  Before we move on, Vaibhav has some operating remarks as well.
• 20:35
  Thanks, Elon. As Elon mentioned, in Q1, we
• 20:38
  achieved something which has never been undertaken in the
• 20:41
  automotive industry of updating all our factories for the best
• 20:45
  selling car in the world all at the same time.
• 20:48
  And this is this. People don't understand this was
• 20:51
  not a small feat. We're not aware of anybody else
• 20:56
  being able to do the best selling car all at once within
• 20:59
  1/4 and that too hitting all the timelines which we had
• 21:03
  established at the beginning. So when big kudos to the team
• 21:07
  for making this happen. Additionally, we also hit a
• 21:11
  record gross profit for energy storage business in the quarter.
• 21:16
  Now getting back into the business, there's been a lot of
• 21:18
  speculation as to the reasons for decline of our vehicle
• 21:22
  deliveries in the first quarter. We had previously guided that we
• 21:26
  will be updating all factories and this would lead to several
• 21:29
  weeks of lost production, which did happen.
• 21:32
  As per the Ripper effect of the change is not having enough new
• 21:37
  Model Y available in most markets for people to see and
• 21:41
  experience till the last few weeks of the quarter.
• 21:45
  Additionally, the negative impact of vandalism and
• 21:49
  unwarranted hostility towards our brand and our people had an
• 21:53
  impact in certain markets. Despite this, we were able to
• 21:58
  sell out legacy Model Y in US, China and a few other markets
• 22:02
  within the world. And again, you know, just so
• 22:05
  that people understand, we were producing the legacy Model Y
• 22:09
  till middle to end of February and we switched over and we were
• 22:13
  able to still sell out within that period.
• 22:16
  So again, big achievement by all the people at just start to make
• 22:21
  it happen. We've been extremely, we have a
• 22:25
  very, extremely competitive vehicle lineup which with most
• 22:30
  vehicles going through a recent update and after that advances
• 22:35
  in FSD, you have a personal chauffeur which can take you
• 22:39
  almost anywhere under supervision.
• 22:42
  There are numerous stories shared by customers ranging from
• 22:45
  how it has improved their daily commute, to providing mobility
• 22:49
  customers with disabilities, to giving older customers the
• 22:53
  ability to travel comfortably and independently.
• 22:56
  Not only is FSD supervised safer than a human driver, but it is
• 23:01
  also improving the lives of individuals who experience it.
• 23:04
  And again, this is something you have to experience and anybody
• 23:09
  who has experienced just knows it and you know, we've been
• 23:13
  doing a lot lately try and get those stories out at least on X
• 23:19
  so that people can see how other people have benefited from this.
• 23:24
  Now coming into some of the financial stuff, auto margins
• 23:29
  declined sequentially primarily due to the reduction the total
• 23:32
  number of deliveries, lower fixed cost absorption due to
• 23:38
  factory change awards and lower regulatory credit revenues,
• 23:42
  offset slight by a slight increase in pricing due to the
• 23:46
  launch of new Model 1 despite incentives which we had to sell
• 23:51
  legacy Model 1. Energy storage business like I
• 23:55
  said before has achieved yet another milestone of great
• 24:00
  highest gross profit in the quarter.
• 24:03
  This was despite, you know, sequential decline in
• 24:06
  deployments. The importance of this business,
• 24:09
  as you know mentioned is really profound, especially in this
• 24:14
  environment because you know, if in order for grids to work
• 24:19
  properly with the demands from AI and all this, you need some
• 24:23
  more stability. And this is by far the simplest
• 24:27
  and best solution which we are aware of which can help do this.
• 24:31
  And we've also developed certain unique solutions to help our
• 24:35
  customers to achieve this. Additionally, you know on the
• 24:39
  Powerwall side, we've been selling the new Powerwall 3 and
• 24:45
  you know it's been received with very good reception from
• 24:48
  customers. And to the extent that we are
• 24:51
  currently supply constraint on services and other margins, they
• 24:57
  were slightly down sequentially primarily because of the
• 25:00
  pressure on our used car business and insurance business.
• 25:03
  Note that we continued our journey to improve profitability
• 25:07
  in our services and position business through better label
• 25:09
  product today. As previously discussed, our
• 25:13
  operating expenses continue to increase sequentially primarily
• 25:17
  due to our AI related initiatives including Optimus
• 25:21
  and also constant development for our vehicle programs
• 25:24
  including cyber Caps, SEMA and cheaper models.
• 25:28
  These expenses flow through R&D. We believe even in the current
• 25:32
  environment it is the right strategy making investments in
• 25:36
  these areas to position us for the long term.
• 25:40
  These increases were offset by decreases and the CNA from
• 25:44
  changes in our micro level program.
• 25:48
  Other income reduced significantly on a sequential
• 25:51
  basis. The primary reason was Bitcoin
• 25:56
  mark to market loss in Q1 versus gain in Q4 resulting in a 472
• 26:02
  million drop. The remainder of the change is
• 26:04
  because of FX management. With the adoption of the new
• 26:08
  mark to market standard for Bitcoin, we expect increased
• 26:12
  volatility in other other income in addition to the FX
• 26:16
  reputability. I know with tariffs is the
• 26:20
  hottest topic which people talk about and it has various impacts
• 26:24
  to our business on as Elon mentioned, you know on the
• 26:28
  vehicle business, we've been on this journey of regionalization
• 26:32
  for years, specifically in the US Model Y has been rated the
• 26:38
  most American model made car on cars.com made in America index
• 26:43
  three years ago. This is part is of the all the
• 26:47
  work which the team has been doing over the years and to the
• 26:50
  extent that today, you know, if you look at our vehicle line up
• 26:55
  in US, we're about approximately on a weighted average basis 85%
• 27:02
  USMCA compliant. So like Elon said, this
• 27:06
  definitely gives us a bigger edge as compared to our other
• 27:09
  OEMs in terms of managing the tariffs.
• 27:12
  But we're not immune because when the 230 Section 232 auto
• 27:17
  tariffs become effective in May which includes Canada and Mexico
• 27:22
  and Canada and Mexico has been part of our regionalization
• 27:25
  study, they will have an example of profitability.
• 27:29
  And I know research modelling on this impact has been up about
• 27:33
  couple of 1000 people, which is pretty much in line with what
• 27:37
  we've been forecasting. The impact of tariffs on the
• 27:41
  energy business will be outside since we so much LFP battery
• 27:47
  cells from China. We are in the process of
• 27:49
  commissioning equipment for the local manufacturing of LFP
• 27:52
  battery cells in the US. However, the equipment which we
• 27:56
  have can only service a fraction of our total installed capacity
• 28:01
  at like later on we've also been working on securing additional
• 28:06
  supply chain from non China based supplies but it will take
• 28:09
  time. Also note that you know mega
• 28:13
  fact irrespective of all the impact on US from from our
• 28:18
  energy from tariffs on the energy business, we do have
• 28:22
  manufacturing China which just started operations in Q1 and
• 28:26
  that our that that should take care of our business outside of
• 28:31
  US. There's also an important impact
• 28:35
  of tariffs on our capital investments.
• 28:37
  I know this is going to sound counterintuitive since in order
• 28:41
  to own onshore manufacturing or expand lines, we have to bring
• 28:45
  equipment from outside the US because there is not that much
• 28:48
  capacity in the US and the current trade environment, you
• 28:52
  know, such equipment being brought in, is subject to the.
• 28:55
  Expenses bringing in from China right now.
• 28:57
  Exactly. And and the reality is that
• 29:03
  China has the basic one which has the most capacity to provide
• 29:07
  this our CapEx guidance inclusive of model tariffs.
• 29:14
  Even with the optimization we have tried to do, it is
• 29:16
  forecasted to be still in excess of 10 billion this year and we
• 29:21
  are still evaluating what more to do on this one.
• 29:25
  To summarize, we have near term challenges in our business due
• 29:28
  to tariffs and bad image. We think our strategy of
• 29:32
  providing the best product at a competitive price is going to be
• 29:35
  a winner and this is the reason we are still focused on bringing
• 29:38
  cheaper models to market soon. The start of production still
• 29:42
  planned for June. Additionally, the advancement in
• 29:46
  FSD related features including pilot robotaxi launch in Austin
• 29:51
  later this year should help create a new head of demand.
• 29:55
  I would like to thank everyone at Tesla and our customers.
• 30:01
  Fantastic. Thank you very much, Eva.
• 30:03
  Now we will move on to investor questions.
• 30:05
  We will start with questionsfromsay.com.
• 30:08
  First question is what are the highest risks, highest risk
• 30:12
  items on the critical path to robotaxi launch and scaling?
• 30:22
  Is Ashok Yeah we've got a shock all on sure.
• 30:26
  Well just just talked by the disambiguate the Cybercam from
• 30:34
  robotaxi. So the when will the Teslas
• 30:45
  because the Teslas that will be fully autonomous in June in
• 30:50
  Austin are probably model wise. So that is, that's, that's
• 30:59
  currently on track to, to be able to do paid rides fully
• 31:03
  autonomously in Austin in June and, and, and then to be in many
• 31:14
  other cities in the US by the end of this year.
• 31:19
  It's very difficult. It's difficult to predict the
• 31:20
  exact ramp sort of week by week and month by month, except that
• 31:26
  it will ramp up very quickly. So it's going to be like some
• 31:31
  basically an S curve where it's very difficult to predict the
• 31:33
  intermediate slope of the S curve, but you kind of know
• 31:36
  where the S curve's going to end up, which is the vast majority
• 31:39
  of the Tesla fleet being autonomous.
• 31:42
  So that's why I feel confident in predicting large scale
• 31:48
  autonomy around the middle of next year.
• 31:51
  But yeah, certainly the second-half of next year,
• 31:54
  meaning I break that there will be millions of Teslas operating
• 32:00
  autonomously, fully autonomously in the second-half of next year.
• 32:10
  Yeah, it does seem increasingly likely that there will be a
• 32:21
  localized parameter set of that sort of, you know, like that,
• 32:36
  especially for places that have say very snowy weather, like say
• 32:43
  if you're in the Northeast or something like this, you can
• 32:46
  think of it. It's kind of like a human.
• 32:48
  Like, you know, if you you could be a very good driver in
• 32:52
  California, but are you going to be also a good driver in a
• 32:54
  Blizzard in Manhattan? You're not going to be as good.
• 33:00
  So there is actually some value in you're still drive, but your
• 33:03
  probability of an accident is higher.
• 33:05
  So there's, it's, it's increasingly obvious that
• 33:07
  there's some value to having a localized set of parameters for
• 33:19
  different, you know, different regions and, and localities.
• 33:28
  But this is the output that the nice staff category.
• 33:30
  It's not the required category really.
• 33:35
  The car is just very much like a human.
• 33:38
  It's, it's digital neural Nets and cameras and humans operate
• 33:43
  with biological neural Nets and eyes.
• 33:47
  And so the same strengths and weaknesses will be present or,
• 33:54
  you know, a digital neural net and cameras versus a biological
• 33:58
  neural net and eyes. Ashok, you'd like to elaborate
• 34:01
  on that? Yeah.
• 34:03
  And speaking to the location specific models, we still have a
• 34:06
  generalized approach and you can see that from in our deployment
• 34:10
  of FSD supervised in China, where with this very minimal
• 34:14
  data that's like China specific, the models generalize quite well
• 34:17
  to completely different driving styles.
• 34:20
  That just like shows that the a based solution that we have is
• 34:23
  the right one. Because you know, if you had
• 34:26
  gone down the previous rule based solutions or like more
• 34:30
  hardcore HD map based solutions, it would have taken like many,
• 34:33
  many years to get China to work. You can see those in the videos
• 34:36
  that people post online themselves.
• 34:40
  So the generalized solution that we are pursuing is the right one
• 34:45
  that's going to scale well. And you can think of this like
• 34:47
  location specific parameters that you don't need to ask a
• 34:50
  mixture of experts. And if you're sort of like
• 34:53
  familiar with the A models and Grog and others, they all use
• 34:58
  this mixture of experts to sort of like specialize the
• 35:01
  parameters to specific tasks while still being general.
• 35:04
  This makes the the model to use limited amount of compute to
• 35:10
  solve for the reliability of tasks that it has to solve in
• 35:15
  terms of addressing the question that asks for you know, what are
• 35:17
  the critical things that we need to get right?
• 35:20
  One thing I would like to note is validation.
• 35:22
  Self driving is a long tail problem where there can be a lot
• 35:25
  of edge cases that only happen very, very rarely.
• 35:28
  Currently we are driving around in Austin using our QA free, but
• 35:31
  then it's like super rad to get interventions that are critical
• 35:35
  for a void XC operation. And so you can like go many days
• 35:38
  without getting any single intervention.
• 35:40
  So you can't easily know whether you're improving or regressing
• 35:44
  in your capacity. And we need to build out
• 35:47
  sophisticated simulations including neural network based
• 35:50
  video generation that's not happening in the background to
• 35:53
  make sure that we deliver a safe product and we are able to
• 35:57
  measure our safety even though we can't just exceed we're
• 36:02
  driving around the block or something like that.
• 36:04
  Yeah. I mean, very basic terms, if
• 36:08
  that if we're seeing an accident every 10,000 miles, well then
• 36:12
  you have to drive 10,000 miles on average before you get an
• 36:14
  accident or an intervention. So it's like, OK, now imagine, I
• 36:20
  mean, we must be really, it must be very waked up by the sheer
• 36:27
  number of Teslas doing some. It's in in Austin right now.
• 36:31
  We're like, what? It's going to look pretty
• 36:33
  bizarre. Some people are chasing.
• 36:39
  Yeah, there's just always a convoy of Tesla's going, going
• 36:43
  well, just going all over to Austin in circles.
• 36:49
  But yeah, as I just can't emphasize this enough in order
• 36:53
  to get figure out long tail things, you if it's one in
• 36:56
  10,000, that's that's one in 20,000 miles or one in 30,
• 36:59
  though now you know, the average person drives 10,000 miles in a
• 37:02
  year. So now try to compress that test
• 37:05
  cycle into a matter of, you know, a few months.
• 37:09
  That means you need a lot of cars doing a lot of driving in
• 37:16
  order to compress that ward. Just do do in a matter of a
• 37:20
  month what would normally take someone a year.
• 37:24
  Yeah. And I would just also add that,
• 37:26
  you know, if you haven't looked at those videos coming out of
• 37:30
  China, people are. Oh yeah, those videos are
• 37:32
  amazing. Yeah, they're putting it to real
• 37:34
  test. I mean, they're the dark roads,
• 37:37
  frankly, I think. The Chinese consumer might be
• 37:39
  the most romantic consumer. And I actually customers in
• 37:45
  China are awesome. They have a lot of fun with the
• 37:49
  cars. I saw one guy take a Tesla on
• 37:54
  autonomous on a narrow dirt Rd. yes, across like a mountain.
• 37:59
  And I'm like still a very brave person.
• 38:03
  And I said this driving along on the road with no barriers where
• 38:07
  makes a mistake, he's going to plunge through his doom.
• 38:10
  But it worked. Great.
• 38:14
  Thank you. And if if the question was on
• 38:16
  Cyber cab itself, we're we're in B sample validation now.
• 38:21
  Yeah, Yeah. We should ask that question too.
• 38:22
  Yeah, we have our first. Like big builds coming at the
• 38:30
  end of this quarter within Q2 and then you know, in the coming
• 38:33
  months they'll start to large scale, you know, installation of
• 38:37
  all the equipment in Giga, Texas with, you know, still on
• 38:39
  schedule for production next year.
• 38:41
  Yeah. And I just want to also clarify
• 38:43
  because I think people don't understand the thing that
• 38:45
  there's no new building being built and where is Cyber Cab
• 38:49
  going? Oh, it's in the game.
• 38:50
  It's. Literally the same.
• 38:51
  Factory. Yeah, yeah.
• 38:53
  If everything is it's happening and people don't know it's just
• 38:57
  happening upstairs in all along lines while we're still building
• 38:59
  the Model YS and cyber trucks every day.
• 39:02
  Yeah, yeah. It's worth noting that the, you
• 39:04
  know, the the Tesla Gigafactory in Austin is 3 times the size of
• 39:08
  the Pentagon, including the garden.
• 39:11
  Yeah, including the Ground 0 garden.
• 39:15
  So, you know, good. Because of the Pentagon.
• 39:16
  Like this spelling used to look big, but then you won't.
• 39:23
  Great. Thank you very much.
• 39:25
  The next question is when will FSD unsupervised be available
• 39:28
  for personal use on personally owned cars?
• 39:37
  Before the end of this year, not necessarily.
• 39:40
  I say with within the US like like we do want to test like
• 39:45
  we're at Tesla, we're absolutely hardcore about safety.
• 39:49
  You know, we go to great lengths to make the safest car in the
• 39:52
  world and have the lowest accidents per mile.
• 39:55
  And so and look, if you just live lost.
• 40:00
  So we want to be very careful. So it's so and we want autonomy
• 40:04
  to be definitively safer than manual driving.
• 40:08
  So it's not enough that it just be as safe, it needs to be
• 40:11
  meaningfully safer than if it's cars manually driven.
• 40:16
  So and we want to confirm that there's not something it.
• 40:23
  We just want to be cautious with the rollout.
• 40:25
  We don't want to jump in at the deep end with an army.
• 40:30
  So with that said, I think we should people should we should
• 40:37
  be able to have have it work in several studies later this year
• 40:43
  for personal use. So you know, the acid test being
• 40:49
  you should be able to can you go?
• 40:50
  Can you go to sleep in your car and wake me to your destination?
• 40:55
  And I'm confident that will be available in many cities in the
• 41:00
  US by the end of this year. Great.
• 41:05
  Thank you very much. The next question is, is Tesla
• 41:08
  still on track for releasing more affordable models this year
• 41:12
  or will you be focusing on simplified versions to enhance
• 41:14
  affordability similar to the rear wheel drive Cybertruck?
• 41:19
  Yeah, We're still planning to release models this year.
• 41:21
  As with all launches we're working through like the last
• 41:23
  minute issues that pop up, we're knocking them down one by one at
• 41:27
  this point. I would say that ramp maybe
• 41:30
  might be a little slower than we had hoped initially, but there's
• 41:33
  nothing, you know, just kind of given that turmoil that exists
• 41:35
  in the industry right now, but but there's nothing that's
• 41:39
  blocking us from starting production within the next
• 41:41
  within the timeline laid out in in the opening remarks.
• 41:44
  And I will say, it's important to emphasize that, as we've said
• 41:46
  all along, the full utilization of our factories is the primary
• 41:48
  goal for these new products. And so flexibility of what we
• 41:52
  can do within the form factor and, and you know, the, the
• 41:56
  design of it is really limited to what we can do on our
• 41:58
  existing lines rather than building new ones.
• 42:01
  But we've been targeting the low cost of ownership.
• 42:03
  Monthly payment is the biggest differentiator for our vehicles.
• 42:06
  And that's why we're focused on bringing these new models with
• 42:08
  the, you know, the lowest price to the market within the
• 42:11
  constraints I just highlighted. Great.
• 42:15
  Thank you very much. The next question is does Tesla
• 42:18
  see robo taxi as a winner take most market And as you approach
• 42:22
  the Austin launch, how do you expect to compare against
• 42:25
  Waymo's offering especially regarding pricing, Geo fencing
• 42:29
  and regulatory flexibility? Well, OK, the issue with with
• 42:34
  Waymo's cars is that cost way more money Rosha, but that is
• 42:49
  the issue. You know, they cost very
• 42:51
  expensive, made in low volume Teslas are, you know, I don't
• 42:56
  know, probably cost 1/4 of 20% of what, what, what way more
• 43:02
  costs and, and made in very high volume.
• 43:08
  So, you know, ironically, like we are the ones that made the
• 43:14
  bet that a pure AI solution with cameras and what do you the car
• 43:18
  actually will listen for sirens and that kind of thing is the
• 43:21
  right move. And we decided that that
• 43:25
  expensive sensor suite is the way to go, even though Google is
• 43:29
  very good at AI. So I'm running and you know, it
• 43:34
  is worth noting that Tesla is both an incredible AI, you know,
• 43:37
  AI software team and AI hardware chip design team prospect from
• 43:43
  nothing. They didn't require anyone or
• 43:45
  just both it. So yeah, it's really, I mean, I
• 43:52
  don't see anyone being able to compete with Tesla at present.
• 43:56
  I'm sure that will change eventually, but at least as far
• 44:05
  as I'm aware, Tesla will have, I don't know, 99% market share or
• 44:14
  something ridiculous. That 90 something percent at
• 44:17
  least I don't know, at least some of them might change.
• 44:21
  But you know, if you if we have millions of cars deployed next
• 44:26
  year and unless others have millions of cars deployed like
• 44:32
  we'll have unless we're blocked by regulatory situations, it
• 44:38
  won't be long. I mean, in a few years, why 10
• 44:40
  million autonomous cars on the roads and, you know, and, and
• 44:46
  counting I. Mean the the other thing which
• 44:50
  people forget is like, we're not just developing the software
• 44:53
  solution, we are also manufacturing the cars.
• 44:55
  Yeah. And like you know what like way
• 44:58
  more hands they're taking cars then trying to put.
• 45:01
  Way more money. We, we don't do that.
• 45:05
  So that that definitely gives us a big peg up.
• 45:08
  And like Elon said, we already have a big existing fleet which
• 45:13
  hopefully with the software update could become autonomous.
• 45:17
  With the software update bid will become autonomous.
• 45:21
  To be clear, the model wise that we're talking about in being
• 45:24
  autonomous in Austin in June are the modelized we're model wise
• 45:27
  we make currently there's no change to it.
• 45:29
  I. Think people don't appreciate
• 45:31
  that the car which they can buy today?
• 45:33
  The car that they have or. The car they have is capable of,
• 45:37
  yeah, these kind of things. In fact, it does Dr.
• 45:41
  autonomously from the factory to the end of line every car.
• 45:44
  Yeah, so in the US through. The tunnel, the model wise,
• 45:48
  everything. Right.
• 45:48
  Yes, exactly. We have It is being put to to
• 45:53
  use. It's it's, it's doing useful
• 45:56
  work fully autonomously at the factories.
• 45:58
  As a truck was mentioning the cars drive themselves from end
• 46:01
  of line 22 where this was being picked up by a truck to be to be
• 46:06
  taken to a customer. And I am confident also that
• 46:10
  later this year the first Model Y will drive itself all the way
• 46:15
  to the customer. So from our probably from a
• 46:20
  factory in Boston and our one in here in Fremont, CA, I'm
• 46:27
  confident that from both factories we'll be able to drive
• 46:30
  directly to a customer from a factory.
• 46:34
  School delivery. Yeah, literally goes from the
• 46:38
  end of line and drives themselves to your house.
• 46:40
  It's important to note in the factories we don't have
• 46:42
  dedicated lanes or anything. People are coming in and out
• 46:45
  everyday, trucks delivering supplies, parts, construction,
• 46:48
  you know. And people can film it.
• 46:50
  By the way, you can see this from the road like it's
• 46:52
  uncovered. Exactly.
• 46:54
  And there's videos, people take videos online and anyone who
• 46:57
  wants to go see it can just drive past our Fremont factory
• 47:00
  and see the autonomous cars driving themselves.
• 47:03
  And they drive themselves and they put themselves in the exact
• 47:05
  right spot to be picked up. Yeah, the logistics yard is
• 47:08
  right there in the open. Yeah.
• 47:09
  We don't move it again to another.
• 47:11
  Lane, but they go, they go to a specific spot, spot, spot.
• 47:14
  Yeah, yeah. So that that's just a routine
• 47:19
  like everyday thing. Great.
• 47:23
  Thank you very much. The next question is can you
• 47:26
  please provide an update on the unboxed method and how that is?
• 47:30
  Progressing. Sure.
• 47:33
  It's progressing, absolutely. As I mentioned just a minute
• 47:35
  ago, like it is the basis for our cyber cat manufacturing
• 47:38
  process. It's really what we changed in
• 47:40
  order to allow the low cost of production and also get the
• 47:43
  Super high levels of automation, you know, really levels of
• 47:46
  automation that are sort of unheard of in vehicle
• 47:48
  manufacturing scales, but not something that you know, you
• 47:51
  when you see it be produced, you'll, you'll, you'll think of
• 47:53
  in terms of like, wow, that's how the car has been built for
• 47:55
  100 years. It's really something we've
• 47:57
  changed in the past year. We've been like focusing on a
• 48:00
  lot of key development areas like marrying these large sub
• 48:02
  assemblies together in a precise way, in an accurate way.
• 48:06
  We've also de risked things like corrosion of, of uncoated
• 48:10
  aluminum structures, you know, the ceiling across the seams of
• 48:13
  the vehicle and when you marry several components and we've
• 48:15
  even done early crash testing and we've proven that like, you
• 48:18
  know, it's, it's going to be just as safe as every other
• 48:20
  carbon build. And so like we're as you know
• 48:24
  with all that combined, we kind of go into the builds that we
• 48:26
  have at the end of this quarter for the for the Cyber Cab
• 48:29
  product and that's the next real big test of full scale, you
• 48:33
  know, integration of the unboxed process.
• 48:36
  And yeah, that's kind of where we are.
• 48:39
  So you'll see them intestinal on the test roads in a couple of
• 48:42
  months. Yeah, although the line won't be
• 48:46
  obviously at this rate initially.
• 48:48
  Initially I the the this is a revolutionary production system.
• 48:54
  I'm not sure what the right word is.
• 48:57
  Unboxing sounds like something like when you get your phone
• 48:59
  can. You open it up.
• 49:01
  Yeah, you have like a pleasant experience when you take your
• 49:03
  phone out-of-the-box, but which of course is nice, but this is
• 49:08
  my favorite revolutionary than that.
• 49:11
  This is this is a very profound reimagining of how to make cars
• 49:18
  in the 1st place. No cars made like this anywhere
• 49:21
  in the world. The factory is the product as
• 49:24
  much as the car is the product. So it's really just the first
• 49:29
  principles approach to manufacturing that will
• 49:35
  ultimately allow us, I think to, I'm trying to think, I'm
• 49:38
  confident, ultimately allow us to achieve a cycle time in a
• 49:45
  unit every 5 seconds or less of a single line.
• 49:50
  And we want to incorporate some of these for testing it into our
• 49:53
  existing production lines as well to progress with the wine
• 49:56
  cyber truck already. So this is something I've been
• 49:59
  thinking about for, for a long time.
• 50:00
  And I've, I've sort of, I've been thinking about this for a
• 50:03
  long time and it's kind of, it's, it's not a crazy thing
• 50:08
  like like a car every 5 seconds may sound like it's coming out
• 50:12
  like bullets, but actually it's coming out at walking speed.
• 50:15
  It's like a meters, a meter a second.
• 50:18
  So this is like we're still far away from caring about the
• 50:25
  aerodynamic drag of the manufacturing line, you know,
• 50:29
  because you're you're still at 3 miles an hour type thing, you
• 50:36
  know, every 5 seconds sounds crazy, but it's 3 miles an hour
• 50:38
  what we're talking about. So yeah, you can run away from
• 50:42
  it basically. But that's still by far the
• 50:47
  fastest line on Earth, you know, And it's like half hour many
• 50:54
  half order many like fun. What's like messing the line?
• 50:58
  I don't know if it's like about the.
• 50:59
  Shanghai phase two and. That's us 33 seconds, yes, we're
• 51:03
  the fastest, right? I would think so we think, we
• 51:05
  think we're the fastest at 33 seconds in our Shanghai factory.
• 51:11
  But but this, this would be, you know, 6 times faster or seven
• 51:16
  times faster amounts. So yeah, I mean, it'll be slower
• 51:24
  than that first. But the point is that like when
• 51:27
  you, when you fully optimize the design and operation of the next
• 51:32
  generation factory that we're building right now, the 5 second
• 51:36
  cycle time or less is the design is capable of it.
• 51:42
  You know, So if you, you know, like when you, when you go
• 51:47
  through like a radical new architecture, you go from like
• 51:49
  being like in a, I mean, I'd say like probably in particular as
• 51:54
  an A+ on, on a moderately, you know, an advanced but still
• 52:00
  traditional, traditional car production system, sort of
• 52:07
  they're really doing about as good as possibly as possible to
• 52:10
  do within a conventional scenario.
• 52:15
  So trying to get much below, you know, sort of below like 30
• 52:20
  seconds, extremely difficult. But if not and you start getting
• 52:24
  into sort of impossible where you just, you have to be fast
• 52:27
  that a human could possibly move.
• 52:29
  So then the autonomous line, it really just needs to be robust,
• 52:34
  moving really fast. And that's where you get to some
• 52:37
  5 seconds. But we'll so but we'll start off
• 52:42
  with getting AC and instead of an A getting AC and a new
• 52:46
  architecture, but then the the potentials there over time to
• 52:51
  move that up to an an A+ within an A+ architecture.
• 52:56
  Great. Thank you very much.
• 52:58
  The next question is how is Tesla positioning itself to
• 53:01
  flexibly adapt to global economic risks in the form of
• 53:03
  terrorists, political biases, etcetera?
• 53:06
  As Ilan said, you know, we've been the spicing team been at at
• 53:11
  for a while. We continue to mitigate global
• 53:14
  economic risks like tariffs and political biases by
• 53:17
  regionalizing parts supply near its factories in North America,
• 53:21
  Berlin and Shanghai. For example, in North America,
• 53:24
  our high volume vehicle programs have over 85% North America
• 53:27
  content and Shanghai vehicles have over 95% local content.
• 53:32
  Berlin has similar levels of regionalization as North
• 53:35
  American when you exclude the battery and we are working on
• 53:38
  regionalizing the battery as well.
• 53:41
  This is a pre pandemic strategy that we accelerated post
• 53:44
  pandemic through supply diversification, dual sourcing,
• 53:48
  vertical integration, advanced analytics and local partnerships
• 53:52
  to ensure supply chain resilience and production
• 53:54
  stability. Having said that, we are not
• 53:57
  100% insulated and these tariffs are higher on our low volume
• 54:01
  platforms than the high volume ones.
• 54:05
  Yeah. In fact, there's no more
• 54:07
  vertically integrated car company in Tesla.
• 54:09
  I mean, we're take about it most buddy, integrated car company
• 54:14
  since you know, Henry Ford back in the day when they're doing
• 54:20
  mining iron and stuff and growing rubber trees.
• 54:24
  So like we're not growing rubber trees and mining iron.
• 54:27
  Yeah, but we are, we have both today at a lithium refinery in
• 54:33
  South Texas and it's the I think the biggest lithium refinery
• 54:38
  outside of China, I think. Is that right?
• 54:42
  Yeah, I think so. But it has it's output potential
• 54:47
  would be the biggest one thing refinery has.
• 54:48
  Yeah. And we've got space to expand it
• 54:50
  if we need to build more, right. So and then we've got the
• 54:53
  cathode refinery in Austin next to the next to the gig factory.
• 54:57
  We're going to figure out what to do about the anode.
• 55:02
  This is an ongoing subject of discussion.
• 55:07
  Best, the best of all possible worlds would be figure out how
• 55:10
  to have no anode test, anode test part being no part.
• 55:15
  That's, that's the dream of the lithium batteries to be anode,
• 55:19
  not have an anode. But either way, we, we better
• 55:23
  have the anode, the cathode and the lithium and the electrolytes
• 55:27
  and the separator to make a cell.
• 55:33
  But but you know, there's no other car company that is
• 55:36
  building lithium refineries and cathode refineries.
• 55:40
  We're ridiculously vertically integrated and that and that's
• 55:45
  our best position to protect against supply chain
• 55:50
  disruptions. Yeah.
• 55:52
  You want to talk about progress in the.
• 55:54
  Yeah, certainly for in ourselves we've, you know, we've multi
• 55:58
  sourced every component and we have, you know, every part
• 56:03
  coming from at least two different countries large, which
• 56:05
  is and that we started this, the supply chain team and the
• 56:09
  engineering team worked together on this for the last couple of
• 56:11
  years to to put that together. It's not something we did in a
• 56:14
  couple of months, you know, this is years of work.
• 56:17
  So we're, you know, we're in a good position to to the
• 56:21
  advantage of that. And the and the insourcing of of
• 56:23
  lithium and and cathode, they're the two most critical parts of
• 56:27
  the battery that's, you know, run in that backyard and and
• 56:31
  we're totally insulated from the oil.
• 56:34
  It needs to be an operation, operation.
• 56:38
  We also make our own cells, by the way.
• 56:40
  So cell production, if you took this, this, you know, this, you
• 56:46
  make the anode, the cathode, the lithium, the electrolyte
• 56:49
  separator, the can. And then you got to put all that
• 56:52
  together in the cell factory. And there are entire companies
• 56:57
  that all they do is produce cells, but they don't do the
• 56:59
  other stuff. They don't refine lithium or the
• 57:02
  cathode or you know, so our cell production is is going quite
• 57:07
  well. And I think we're are we, we're
• 57:13
  currently sort of the lowest cost per kWh, yeah, in the
• 57:18
  others for our all cells we purchase in North America.
• 57:22
  Yeah. So it's all those cost to us.
• 57:24
  Yeah. So we have the lowest cost per
• 57:26
  kWh all things considered. So the Tesla cell is the most
• 57:30
  competitive cell, yeah, for a kWh putting to a car.
• 57:35
  If it's if the Tesla sell it's lower cost, then it's the
• 57:38
  supplier sell. Yeah, yeah.
• 57:40
  And the, the plan that's here is to really build off that base.
• 57:42
  You know, getting to lowest cost is it's it's the hardest
• 57:48
  challenge for so many battery. You know, it's relatively easy
• 57:51
  to build a flashy product that does one thing well.
• 57:55
  To build something at high volume and low cost is super
• 57:58
  difficult. And we're kind of using that as
• 57:59
  base to then build off and and add, you know, performance in
• 58:02
  different areas. So new products coming out,
• 58:06
  yeah. So yeah, I mean.
• 58:13
  To Elon's point that there's a there's a lot of advantages for
• 58:15
  regionalization. You know, the most important
• 58:18
  thing is we're not finding the working capital for six to eight
• 58:20
  weeks on the ocean. If there's a design change, then
• 58:23
  everything that's in transit basically has to be scrapped.
• 58:26
  Secondly, port disruptions as we saw during COVID can be very
• 58:29
  expensive because slight disconnects can shut down
• 58:31
  production. So then your only option is
• 58:33
  costly air as per light. It also gives us resilience and
• 58:36
  supply chain. If one region is down, we can
• 58:37
  bridge with others. It's more worth to set up in the
• 58:40
  beginning, but it's critical to have when the need arises.
• 58:43
  Having said that, it's unrealistic to zero 100%
• 58:45
  regionalization across the board for specialized areas such as
• 58:47
  semiconductors. In such cases, our team works
• 58:50
  very closely with our partners to ensure we have strategic
• 58:53
  banks in place and a disruption doesn't impact production while
• 58:57
  we step stand up the the regional manufacturing for that
• 58:59
  particular commodity. And you know, I'll say like on
• 59:02
  the rest of the vehicle, like you know, was talking about with
• 59:04
  cells, we're also heavily very integrated import ingots, you
• 59:08
  know, internal castings, you recycle those and melt some.
• 59:10
  There's the same thing with plastics, but it doesn't mean
• 59:13
  we're not exposed. You know, we do have some areas
• 59:18
  where we use rare earth magnets, you know that.
• 59:20
  And we've been working for years to to find alternate sources and
• 59:23
  bring those up as well as we have burn texture machines.
• 59:25
  And as we've mentioned in the past, we're working our ferrite
• 59:27
  lovers for some time. So like as Karen said, you know,
• 59:32
  with our heavy regionalization percentages, we're definitely
• 59:34
  like the lowest, you know, exposed to this.
• 59:37
  But we're not completely new in this Bible I've mentioned in
• 59:40
  several remarks. Great.
• 59:44
  Is it similarly related on the battery guide, just Tesla still
• 59:48
  a battery supply constraint as noted on the Q4 call?
• 59:51
  And does that change the tariffs?
• 59:54
  So this is Karen. We've been working very hard to
• 59:56
  expand battery cell production in the US, both with vendors and
• 1:00:00
  what Bonnie mentioned earlier with the 4680 program.
• 1:00:04
  And we're also working on moving the upstream supply chain for
• 1:00:07
  battery cells in the United States for several years.
• 1:00:09
  And that strategy is really starting to pay off Now.
• 1:00:12
  As it stands right now, we're not constrained on battery cells
• 1:00:14
  supply for vehicles. The recent tariffs do pose some
• 1:00:17
  challenges to Tesla Energy, well, like our CFO mentioned
• 1:00:19
  earlier, but it's something we've been anticipating and we
• 1:00:22
  should be able to resolve. In a timely fashion.
• 1:00:25
  We actually have a plan to find a place.
• 1:00:27
  We're executing towards it. We also have some other sourcing
• 1:00:31
  sources coming online to supplement the shortfall.
• 1:00:34
  And then of course, we have the LFV production that's happening
• 1:00:37
  in house. We have we have a slight
• 1:00:41
  disconnect of aligning the right cells with the right path.
• 1:00:44
  So that's the little bit of puzzle that we have to solve
• 1:00:48
  internally. But as far as cells go, there's
• 1:00:50
  no shortage. Great.
• 1:00:53
  Thank you very much. The next question is, did Tesla
• 1:00:56
  experience any meaningful changes in order inflow rate in
• 1:00:59
  Q1 relating to all of the rumors of brand damage?
• 1:01:04
  So. In Q1, as mentioned earlier, we
• 1:01:07
  took the best selling car over the last two years and ramped up
• 1:01:11
  all four of our global factories.
• 1:01:13
  And in less than 8 weeks, we've already gone to the rate of our
• 1:01:16
  previous model wise the factories.
• 1:01:18
  So just kudos again to the team for the great job there.
• 1:01:22
  And despite the economic strain and negative articles that had
• 1:01:26
  in California and Q1, Tesla remained the best selling card,
• 1:01:30
  not just EV. And additionally, we had a
• 1:01:32
  record number of test drives globally in Q1 as well.
• 1:01:36
  So interest remains high. And so right now we continue to
• 1:01:41
  see, you know, good interest still on.
• 1:01:44
  Vehicles. Yeah, I mean, Tesla's wanting
• 1:01:49
  you to sort of the macro demand for cars, you know, so when when
• 1:01:57
  there is economic uncertainty, people generally want to pause
• 1:02:03
  on buying during a major capital purchase like a car.
• 1:02:08
  But you know, as far as absent macro issues, we don't see any
• 1:02:15
  reduction in demand. Correct.
• 1:02:18
  And that's where we continue to focus on affordability and it's
• 1:02:22
  a fun focus there. Yeah.
• 1:02:25
  Fantastic. Thank you, guys.
• 1:02:27
  The next question is regarding the Tesla Optimist pilot line.
• 1:02:30
  Could you confirm it if it is currently operational?
• 1:02:32
  If so, what is the current production rate of Optimist
• 1:02:35
  bonds per week? Additionally, how might the
• 1:02:37
  recent tariffs impact the scalability of this production
• 1:02:40
  line moving forward? And optimist, I want to just
• 1:02:48
  want to emphasize Optimus is still very much development
• 1:02:50
  program. It's not, it's not a you know,
• 1:02:53
  it's not a large volume production.
• 1:02:54
  It's fine. You know, this this year, you
• 1:02:57
  know, we'll make a few that you know, we do expect to make
• 1:03:00
  thousands of Optimus robust, but most of that production is going
• 1:03:03
  to be at the end of the year. So the almost everything in
• 1:03:09
  Optimus is new. There's there's not like an
• 1:03:12
  existing supply chain for the motors, gearboxist, electronics,
• 1:03:16
  actuators, really anything in the in the almost anything in
• 1:03:19
  the optimist apart from the the AI for Tesla, the Tesla AI
• 1:03:25
  computer, which is the same as one in the car.
• 1:03:29
  So when you have a new complex manufactured product, it'll move
• 1:03:37
  as fast as the slowest and least lucky components in the entire
• 1:03:40
  thing. And as a first order
• 1:03:43
  approximation, there's like 10 to 10,000 unique things.
• 1:03:47
  So, so that's why that's why it doesn't anyone who tells you
• 1:03:51
  they can predict with precision the production ramp of the truly
• 1:03:58
  new product is doesn't know what they're talking about.
• 1:04:04
  It is literally impossible. So you go through this like
• 1:04:10
  series of constraints where it's like this part's limiting
• 1:04:12
  factor, now that part's limiting factor, this part's limiting
• 1:04:15
  factor, and multiply that by 1000 basically.
• 1:04:20
  And then the rate of the production ramp is decided by
• 1:04:23
  how quickly you can solve each of those problems.
• 1:04:28
  Now you know Optimus was affected, you know, by the
• 1:04:37
  magnets issue from China because the optimist actuators in the
• 1:04:41
  arm do use permanent magnets. Now Tesla as a whole does not
• 1:04:44
  need to use some of the magnets. But when something is volume
• 1:04:49
  constrained like like an arm of the robot, then you want to try
• 1:04:55
  to make the motors as small as possible.
• 1:04:57
  And then so we just did design in permanent magnet, permanent
• 1:05:01
  magnets for those motors. And those were affected by the
• 1:05:04
  supply chain, you know, by by basically China requiring an
• 1:05:07
  export license to send out any rare earth magnets.
• 1:05:15
  So we're working through that with China.
• 1:05:17
  Hopefully we'll get a license to use the rare earth magnets.
• 1:05:22
  China wants some assurances that these are not used for military
• 1:05:24
  purposes, which obviously they're not.
• 1:05:26
  They're just going into a humanoid Rd. launch.
• 1:05:29
  So it's not a weapon system, but that that is an example of a
• 1:05:36
  general challenge there. But I'm confident we'll overcome
• 1:05:41
  these issues and we'll, by the end of this year have thousands
• 1:05:45
  of off most robots. Great.
• 1:05:48
  Thank you very much. And the last question, we
• 1:05:51
  already covered earlier whether Robotex was still on track for
• 1:05:54
  this year. So with with that we can move on
• 1:05:57
  to analyst questions. The first question is going to
• 1:06:00
  come from Pierre at New St. Pierre.
• 1:06:04
  Please unmute yourself. Hey guys, can you hear me?
• 1:06:11
  Yeah, that's great. I'm super excited to hear that
• 1:06:15
  Robotaxi and Optimus becoming the very tangible feature for
• 1:06:18
  Tesla. But I have actually a question
• 1:06:20
  on the on the legacy, not the legacy, but the current like
• 1:06:25
  auto business. And when I look back at the ramp
• 1:06:27
  of Model 3 a few years ago, I really saw it as being the
• 1:06:33
  iPhone of cars, a new product completely reinvented, very
• 1:06:37
  different user experience, vastly superior, impossible to
• 1:06:42
  to match for traditional competitors.
• 1:06:46
  And for the iPhone, it resulted in the the high end of the
• 1:06:50
  smartphone market quadrupling in size and actually Apple taking
• 1:06:54
  60% market share. And so when you look at the
• 1:06:57
  Model 3 and the Model Y today, I think they are still like really
• 1:07:01
  vastly superior to any other cars.
• 1:07:03
  And I wonder why they've taken about 15% of their addressable
• 1:07:09
  market and not more actually. So another way to put it is
• 1:07:12
  what, why are there so many people still buying game WS and
• 1:07:15
  Mercedes knowing that the Model 3 and the Model YS are out there
• 1:07:20
  and available? And I wonder if you've, if
• 1:07:24
  you're trying to solve that's rather internally, if you
• 1:07:27
  understand why, you know, what are these auto buyers who are
• 1:07:31
  not buying a Model 3 or a Model Y missing And, and if you have
• 1:07:36
  ideas of things you could do to address that, maybe there is
• 1:07:39
  enormous value left on the table there.
• 1:07:42
  Yeah, that's what I'm wondering these days.
• 1:07:47
  Yeah. I the, the, the, the reality is
• 1:07:50
  that in the future, most people are not going to buy cars.
• 1:07:55
  So it's, it's kind of what, you know, what one could sort of
• 1:07:58
  say. Look, I think you want to
• 1:08:01
  continue with your, your phone metaphor.
• 1:08:04
  I mean, you can remember the days of the flip phones when
• 1:08:06
  there was, you know, 100 different flip phone designs.
• 1:08:10
  And, and I would, you know, the, the mistake that lump
• 1:08:14
  manufacturers made was to try to make that many different
• 1:08:18
  variants of a foot bone, which was a mistake.
• 1:08:22
  They should have made the iPhone so because obviously everyone's
• 1:08:30
  going to want a smartphone. But in the beginning of the of
• 1:08:32
  when, when you know, the iPhone came out, I was like, wow, I
• 1:08:35
  can't believe these guys are not reacting as though this, this is
• 1:08:40
  death. But they didn't they, they kept
• 1:08:44
  making variance of flip phones. Nokia.
• 1:08:49
  Nokia I think at one point was the most valuable company in the
• 1:08:51
  world or close to it. But they kept making flip
• 1:08:54
  phones, you know, trying to find another mock niche.
• 1:08:58
  Maybe somebody wants a phone of a different style, maybe this
• 1:09:03
  different colour or whatever it is.
• 1:09:07
  Nope. They just want a super
• 1:09:09
  intelligent phone. They can do everything, just one
• 1:09:15
  SO. I said this many, I said this
• 1:09:25
  many years ago, but in in the future, in in the not, not too
• 1:09:30
  distant future, buying a gasoline car that is not
• 1:09:35
  autonomous will be like riding a horse while using a flip phone.
• 1:09:38
  Some people still do it, but it's rare.
• 1:09:46
  OK. And.
• 1:09:48
  Thank you. The next question comes from
• 1:09:50
  Emmanuel Rosner at Wolfe. Emmanuel, please, I'm here.
• 1:09:55
  So. Great.
• 1:09:58
  Thanks for taking my question. So Ilan, the the public version
• 1:10:02
  of the FSD software still has a decent amount of I guess
• 1:10:08
  intermittent human interventions that are required.
• 1:10:12
  So what's still required for the software on your end to get to a
• 1:10:16
  level where it doesn't need to be supervised?
• 1:10:19
  And I'm asking that in the context of, obviously, the June
• 1:10:22
  launch being in the next couple of months, what still needs to
• 1:10:26
  happen? And we are working on a number
• 1:10:31
  of items too. Yeah, I mean we are aware of the
• 1:10:36
  interventions that are happening in the public bills and that's
• 1:10:40
  why we are hardcore burning it down.
• 1:10:42
  And really just picking some initial launch city helped us
• 1:10:46
  focus on like solving all the issues that you'd face here, for
• 1:10:49
  example, like it's focusing on Austin.
• 1:10:51
  We're not like solving all the issues that, you know, customers
• 1:10:53
  in Boston or somewhere else might face.
• 1:10:56
  And then here we just like, you know, have a big list of all the
• 1:11:00
  issues, just burn it down. And that's what the team is
• 1:11:02
  working on along with other sort of like redundancy issues.
• 1:11:06
  For example, if one of the computers goes down right down
• 1:11:09
  the customer fleet, it would like throw the red hands and ask
• 1:11:13
  you to take over. But we don't want that kind of
• 1:11:15
  situation. So you're solving both like the
• 1:11:17
  reliability issues of the autonomy software and also the
• 1:11:19
  reliability issues of the system software together for Austin?
• 1:11:28
  Yeah, really. Just we just worked through a
• 1:11:30
  long tail of unusual interventions.
• 1:11:36
  So, and these are really very rare, like as a single
• 1:11:41
  intervention every 10,000 miles. I mean, that's a lot of driving
• 1:11:44
  you've got to do to even find one case within Athens.
• 1:11:49
  Yeah, and some interventions due.
• 1:11:50
  To. Systematic missing
• 1:11:53
  functionality. For example, for handling
• 1:11:55
  emergency vehicles correctly, you don't need to consume audio
• 1:11:58
  as an input other than the customer facing versions don't
• 1:12:02
  have audio input, but the version that's in that's going
• 1:12:05
  to be in Austin will have audio input and so on.
• 1:12:10
  OK, but would you have like remote operators for example?
• 1:12:15
  I mean every now and then if a car gets stuck or something
• 1:12:17
  someone will like, you know, unblock it.
• 1:12:19
  But it's just figured we are a bit conservative and tend
• 1:12:23
  towards more safety than even if we get stuck every now and then.
• 1:12:28
  We do have remote support but it's not going to be required
• 1:12:32
  for safe operation. If anything, it's just required
• 1:12:34
  for more availability. Anyway, it's only a couple
• 1:12:39
  months away, so you can just say for yourself in a couple months
• 1:12:42
  in Austin. Great.
• 1:12:45
  Our next question comes from Edison at Deutsche Bank.
• 1:12:52
  Edison, please unmute yourself. Hi.
• 1:12:55
  Thank you very much for the question.
• 1:12:57
  So I want to ask about the the optimist supply chain going
• 1:13:02
  forward. You know, you mentioned, you
• 1:13:04
  know, very fast ramp up. What do you envision that supply
• 1:13:08
  chain looking like? Is it going to require many more
• 1:13:12
  suppliers to be in the US now because of the tariffs?
• 1:13:16
  How, how, how does one kind of think about what needs to happen
• 1:13:18
  there? We.
• 1:13:24
  Have to see how things settle out.
• 1:13:25
  I don't know yet. I mean some things we're doing
• 1:13:33
  as Pretoria talked about, which is that we're, we've already
• 1:13:36
  taken many steps to localize our supply chain.
• 1:13:39
  We're more localized than any other manufacturer and and we
• 1:13:44
  have a lot of things and under way that to to increase the
• 1:13:48
  localization to reduce supply chain risk associated with
• 1:13:52
  geopolitical uncertainty. Did you follow up?
• 1:13:57
  Yeah, wanted to come back actually to the, the robo taxi
• 1:14:01
  then. Do you have a sense on, on how,
• 1:14:04
  how many cars or how, how big the scale will be initially and
• 1:14:07
  how that might ramp up? I know you're, you're targeting,
• 1:14:09
  you know, millions of, of vehicles in the second-half kind
• 1:14:12
  of of next year. But initially at launch, how,
• 1:14:15
  how many vehicles would be reasonable?
• 1:14:17
  And is it going to be as simple as if one goes to Austin, let's
• 1:14:21
  say in late June or July, you'll be able to to request?
• 1:14:26
  Yeah, we're still debating the exact number to start off on day
• 1:14:31
  one, but it's like, I don't know, maybe 10 or 20 vehicles on
• 1:14:34
  day one and watch it carefully, scale it up rapidly after that.
• 1:14:43
  So, you know, we want to make sure that we're paying very
• 1:14:46
  close attention the first time this happens.
• 1:14:51
  But yeah, you'll be able to end of June or July, just go to
• 1:14:55
  Austin and what are Tesla? What time does drive great?
• 1:15:02
  The next question comes from George at Canaccord.
• 1:15:07
  Hi, thank you for taking my question.
• 1:15:09
  It has to. Do with FSD pricing, can we
• 1:15:12
  envision when you launch unsupervised FSD that there
• 1:15:16
  could be sort of a multi tiered pricing approach to unsupervised
• 1:15:21
  versus supervised similar to what you did with autopilot
• 1:15:24
  versus FSD in the past? Thank you.
• 1:15:29
  I mean, this is something which we've been thinking about.
• 1:15:32
  I mean, just so you know, for people who have been trying FSD
• 1:15:37
  and who've been using FSD, they think even the current pricing
• 1:15:41
  is too cheap because for 99 bucks basically getting a
• 1:15:46
  personal show. Yeah, I mean, we, we do need to
• 1:15:50
  give people more time to to they want to look at like the key
• 1:15:55
  break point is can you read your text messages or not?
• 1:15:59
  Yes, can you write a text message or not?
• 1:16:01
  Because obviously people are doing this, by the way, with an
• 1:16:03
  autonomous cars all the time. And if you just go over, go over
• 1:16:07
  drive down the highway and you'll see people texting while
• 1:16:10
  driving, you know, doing 80 miles an hour.
• 1:16:13
  Yeah, but depending on makeup, doing their hair with, with the
• 1:16:18
  mirror down and texting and driving at 80 miles an hour.
• 1:16:23
  This is a concurrence. So people eating lunch, you name
• 1:16:28
  it, shaving, you know. So anyway, but right now the car
• 1:16:39
  is very insistent that you pay attention to the road.
• 1:16:43
  So which reduces the value somewhat because it's very
• 1:16:51
  rigorous about you paying attention to the road.
• 1:16:53
  And we'll gradually lighten up on that with, you know, every
• 1:16:57
  every few weeks or every month, we'll, we'll relax that a little
• 1:17:01
  bit, make up so you can be more and more able to do things you
• 1:17:09
  want to do and not have the card to manage your rate of
• 1:17:12
  detention. So, so that, that, that value,
• 1:17:17
  it'll really be profound when you can basically do whatever
• 1:17:20
  you want, including sleep and, and, and then that $99 is going
• 1:17:27
  to seem like the best $99 you've ever spent in your.
• 1:17:31
  Life and George, did you have a follow up?
• 1:17:34
  My follow up is about geographic expansion.
• 1:17:37
  Just maybe discuss additional markets.
• 1:17:39
  You know there's. Been some news around India
• 1:17:40
  recently that you could launch this year and next.
• 1:17:43
  Thank you. So, yeah, I mean we we've been
• 1:17:47
  working on getting into II is a very hard market and especially
• 1:17:53
  the current and I don't want to talk just about tariffs, but the
• 1:17:58
  current tariff structure with India is that any car which we
• 1:18:01
  send in is subject to 70% tariff also on like a 30%, you know
• 1:18:07
  luxury tax on it. So you know, the same car which
• 1:18:10
  we're sending is like 100% more expensive than what it is.
• 1:18:15
  So that creates a lot of, you know, anxiety.
• 1:18:19
  It's like, you know, people feel OK, they're paying too much for
• 1:18:22
  the car. And by the way, we're not
• 1:18:24
  getting the money. The local government is getting
• 1:18:26
  the money. And that's why we've been very
• 1:18:28
  careful trying to figure out when is the right time.
• 1:18:33
  We, like I said, we are working on it.
• 1:18:35
  It's a great, it would be a great market to enter because
• 1:18:39
  India has a big middle class which we would want to type in
• 1:18:43
  and that is the market which we want to be in.
• 1:18:46
  But again, these kind of things create a little bit of tension
• 1:18:49
  which we are trying to work around.
• 1:18:53
  Great. Thank you so much.
• 1:18:55
  The next question comes from Adam Jonas at Morgan Stanley.
• 1:19:04
  Go ahead. Adam.
• 1:19:11
  We, we can't hear you, Adam. So, Mindy, we'll put you back in
• 1:19:15
  the queue and we'll move to Colin Langan from Wells Fargo
• 1:19:19
  while Adam figures out his audio.
• 1:19:26
  Colin, please unmute yourself. Oh great.
• 1:19:29
  Do you hear me? Yes.
• 1:19:31
  Oh, great. You know you're still.
• 1:19:33
  Sticking with the vision only approach, a lot of autonomous
• 1:19:36
  people still have a lot of concerns about, you know, sun
• 1:19:39
  glare, fog and dust. Any color on how you anticipate
• 1:19:43
  on on getting around those issues?
• 1:19:46
  Because I my understanding it kind of blinds the camera when
• 1:19:48
  you get glare and stuff. Actually it does not find the
• 1:19:53
  camera. The we use an approach which is
• 1:19:59
  direct photon count. So when you see the a processed
• 1:20:04
  image, so the image that goes from the sort of photon counter.
• 1:20:11
  So the silicon, the silicon photon counter that gets goes
• 1:20:15
  through a digital signal processor or image signal
• 1:20:18
  processor. That's, that's normally what
• 1:20:22
  happens. And then that then the image
• 1:20:25
  that you see looks all washed out because if it's you point
• 1:20:28
  the camera at the sun, it, the post processing of the photon
• 1:20:33
  counting washes things out. It actually adds noise.
• 1:20:40
  So quite a big breakthrough that we made some time ago was to go
• 1:20:44
  with direct photon counting and bypass the image signal
• 1:20:48
  processor and that. And then you can drive pretty
• 1:20:53
  much straight at the sun. And you can also see in what
• 1:20:57
  appears to be the blackest of night.
• 1:20:59
  And then here in fog, we can see as well as like people can
• 1:21:05
  probably better, but in fact say quite slightly better than
• 1:21:08
  people than the average person anyway.
• 1:21:13
  And yeah, so so the. Camera is able to see when
• 1:21:20
  there's direct glare on it. I'm surprised by that.
• 1:21:25
  OK. And then just.
• 1:21:27
  There are obviously media reports the other day that the
• 1:21:30
  affordable model was delayed. Doesn't sound like that's
• 1:21:32
  correct. Those reports also talked about
• 1:21:35
  it being more of a cheaper version of the Model Y Any color
• 1:21:40
  on what we should expect is, is it a cheaper version of the
• 1:21:43
  Model Y or is it actually going to be a design change with it?
• 1:21:48
  So, and I think Lars already covered it in answering one of
• 1:21:52
  the say.com questions, The real thing which we are trying to
• 1:21:55
  focus on is affordability and using our existing lines.
• 1:22:01
  And there's always limitations when you're using existing lines
• 1:22:05
  as to how many different form factors can you ping to.
• 1:22:08
  So that's the way I would say you should think about it, and I
• 1:22:13
  don't. Know yeah and I think I said
• 1:22:15
  this before and other other calls like, you know, with the
• 1:22:18
  recent upgrades telling the Model 3 and the worldwide
• 1:22:20
  platforms, we made some pretty great cars at pretty great
• 1:22:23
  prices and we had a bunch of features and things like that.
• 1:22:26
  I think it's easy to consider that, you know, moving forward,
• 1:22:30
  Tesla doesn't make bad cars. And we always make, you know,
• 1:22:33
  our intent is not to make a car that is any worse than any car
• 1:22:36
  we've ever produced in the past. And so, you know, the models
• 1:22:38
  that come out the next months will will be built on our lines
• 1:22:41
  and will resemble in form and shape the cars we currently
• 1:22:43
  make. And, and you know that the key
• 1:22:45
  is that they'll be affordable and you'll be able to buy one.
• 1:22:49
  Great. We might have time for one last
• 1:22:52
  question, Adam. We'll try your audio again.
• 1:22:55
  You want to try to unmute yourself, Adam.
• 1:23:00
  All right. Unfortunately still not working.
• 1:23:08
  All right. Oh, all right guys.
• 1:23:13
  Technology go. Ahead.
• 1:23:16
  Yeah, hi. Yeah, in the February 28th Joe
• 1:23:18
  Rogan interview, Elon, you advocated for a rampant tariffs
• 1:23:23
  to give people time to adjust. Otherwise quote you said the
• 1:23:26
  system would break and bad things would happen.
• 1:23:29
  So are things breaking yet? And if the announced as if the
• 1:23:34
  tariffs as announced remain in place?
• 1:23:37
  When would things start breaking?
• 1:23:40
  Well, at the risk of stating the obvious, I'm, I'm not, I'm, I'm,
• 1:23:44
  I'm one of many advisors to the president.
• 1:23:46
  I'm not the president. So, and but I, you know, I've
• 1:23:52
  made my opinion clear to the president and that, you know,
• 1:23:59
  and, and other people made their opinion clear to the president
• 1:24:02
  because he is there, he listened, he talks to many
• 1:24:04
  people and he makes his decision.
• 1:24:07
  And, you know, I'm hopeful that president will observe whether
• 1:24:11
  my predictions are more accurate than the predictions of others
• 1:24:13
  and perhaps where my advice differently in the future, which
• 1:24:17
  we'll see. But, you know, I'm an advocate
• 1:24:23
  of, you know, predictable tariff structures and generally I'm an
• 1:24:29
  advocate for, you know, free trade and lower tariffs.
• 1:24:37
  Now, 1 does need to take a look at where if, if, if some country
• 1:24:44
  is doing something predatory with tariffs or is providing
• 1:24:49
  that extreme support for if a government is providing extreme
• 1:24:52
  financial support for a particular industry, then you
• 1:24:57
  have to do something to counteract that.
• 1:25:00
  So, but I think that that's on a case by case basis
• 1:25:02
  strategically, but you know, the the president is the the elected
• 1:25:10
  representative people and his fully within his rights to do
• 1:25:13
  what he would like to do. OK, Elon, I, I, I respect that.
• 1:25:22
  Just as just as a follow up and thanks again between between
• 1:25:25
  China and the United States, who in your opinion is further ahead
• 1:25:30
  on the development of physical AI specifically on humanoids?
• 1:25:36
  And and also drones. I'd be interested and and is it
• 1:25:39
  even close and kind of how I I yeah, I'm serious.
• 1:25:42
  Well, I think you know the answer to drones.
• 1:25:46
  I mean, yeah. You know, a friend of mine,
• 1:25:53
  Yuval made this, you know, posted on XI, reposted it, I
• 1:26:00
  think a prophetic statement, which is any country that cannot
• 1:26:03
  manufacturers own drones is doomed to be the vassal state of
• 1:26:06
  any country that can. And we can't, American cannot
• 1:26:11
  currently manufacture its own drones.
• 1:26:15
  But that's it again, unfortunately.
• 1:26:21
  So China I believe manufacturers about 70% of all drugs.
• 1:26:25
  And if you look at the total supply chain, China is almost
• 1:26:28
  100, almost 100% of drones are have a supply chain dependency
• 1:26:32
  on China. So China is in a very strong
• 1:26:34
  position and here in America and we need to shift more of our
• 1:26:44
  people and resources to manufacturing because this this
• 1:26:50
  is and I have a lot of respect for China because I think China
• 1:26:55
  is amazing actually. But the United States, the
• 1:26:58
  United States do not have such a severe dependency on China for
• 1:27:01
  bad groans and be unable to make them unless China gives us the
• 1:27:07
  parts, which is currently the situation, You know, with
• 1:27:12
  respect to humanoid robots. I do not think there is any
• 1:27:19
  company in any country that can match Tesla.
• 1:27:27
  Tesla and SpaceX are #1 so. And then now I'm a little
• 1:27:38
  concerned that on the leaderboard ranks 2 through 10
• 1:27:44
  will be Chinese companies, but I'm confident that rank one will
• 1:27:50
  be Tesla. Great.
• 1:27:54
  Well, I think that's unfortunately all the time we
• 1:27:56
  have for today. We appreciate all your questions
• 1:27:58
  and look forward to talking to you next quarter.
• 1:28:00
  Thank you very much and goodbye. Did you catch that, what Trump
• 1:28:04
  said about Elon? And it's it's telling the kind
• 1:28:08
  of person that Trump thinks Elon is now.
• 1:28:11
  And I'm not taking a side here. I am more in favor of doing the
• 1:28:15
  right thing and being nice to people than I am about anything
• 1:28:19
  else. And something is telling about
• 1:28:22
  the way that Donald Trump just kind of blows off Elon in this
• 1:28:25
  clip. And I would say that about
• 1:28:27
  anybody. I'm I'm not for or against
• 1:28:31
  anything. I just know what I hear.
• 1:28:34
  Right? And if you didn't hear that,
• 1:28:36
  then go back, rewind a little bit, check it out.
• 1:28:39
  Notice how he kind of just like brushed Elon off as one of those
• 1:28:43
  people that like, I don't really need the guy.
• 1:28:45
  He just came in here and did this thing.
• 1:28:47
  And that's cool. You know, like that's kind of
• 1:28:48
  how he how he worded it. But yeah, I mean, let me know
• 1:28:52
  what you think in the comments. Let me know how you feel about
• 1:28:54
  this because I'm here to have a conversation with you.
• 1:28:57
  And we are also a community here.
• 1:29:00
  And if you want to join our community for further
• 1:29:02
  discussion, we have a Discord. I'm going to leave it in the
• 1:29:05
  description down below. So thank you so much for
• 1:29:08
  listening today. I appreciate your time and I
• 1:29:10
  appreciate you spending it here with me on stage 0 Elon Musk
• 1:29:13
  podcast. Take care of yourselves and each
• 1:29:15
  other and I will see you in the next one.