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Elon Musk Answers All Your Questions!!! · Elon Musk Thinking

0:00
Speaker 1: So too for the great groundbreaking and opening. So let's
0:03
Speaker 1: see with that we can move to I guess Q
0:06
Speaker 1: and A. We've obviously got significant bench strength here should
0:12
Speaker 1: probably hit like a bench and anyway, which we maybe
0:18
Speaker 1: have too many people on stage, but we'll try to
0:21
Speaker 1: answer questions within reason, you know, which this is meant
0:26
Speaker 1: to be kind of more of a long term sort
0:29
Speaker 1: of discussion as opposed to, uh, you know, what will
0:34
Speaker 1: be the production for the rest of the quarter type
0:36
Speaker 1: of thing. So let's try to orient our questions towards
0:42
Speaker 1: long term value creation and with that far away.
0:49
Speaker 2: Rob.
0:54
Speaker 3: All, it's a road lash for the Wolf research. Very
0:58
Speaker 3: exciting plans about the the next generation vehicle and power
1:03
Speaker 3: trains and batteries. I was hoping you can maybe talk
1:05
Speaker 3: to us a little bit about the timeline for deploying this.
1:09
Speaker 3: And it sounds like it's more than just a vehicle.
1:12
Speaker 3: This is a kind of a paradigm change on how
1:14
Speaker 3: vehicles are assembled, how batteries are put together and everything,
1:19
Speaker 3: and does that also just get reconfigured into everything that
1:24
Speaker 3: you do. So the model wise that are being built
1:27
Speaker 3: here will be built very differently in the future. Maybe
1:29
Speaker 3: just give us some feel for what happens from here
1:32
Speaker 3: and what's the timeline for implementation.
1:36
Speaker 2: Well, talk a little bit about that, but.
1:40
Speaker 1: Broadly speaking, the most profound architectural changes will be in
1:45
Speaker 1: future vehicles. Retooling a factory means bringing the factory down
1:50
Speaker 1: for an extended period of time, and that's I would
1:55
Speaker 1: preferred not to do that, I think. But but there
2:01
Speaker 1: are variants in how Model Y is produced. So we've
2:03
Speaker 1: got variants where there's rear casting, where there's a front
2:08
Speaker 1: and rear casting, and.
2:10
Speaker 2: We have the.
2:12
Speaker 1: Structural battery pack, and then there are a number of
2:16
Speaker 1: smaller improvements that occur. But I think for really really
2:20
Speaker 1: big changes those would be future vehicles.
2:24
Speaker 2: Yeah. I know, you guys want to add.
2:27
Speaker 4: Lars maybe, I mean yeah, so, I mean, as far
2:31
Speaker 4: as I agree with you one hundred percent, Elan, it's
2:34
Speaker 4: it's it's really easy to put innovations in new vehicles,
2:37
Speaker 4: but long term we'll obviously bring them back. We've always
2:39
Speaker 4: talked about that, but we don't want to take our
2:41
Speaker 4: factories down. As far as the timeline goes, you know,
2:44
Speaker 4: we're gonna go as fast as we can left or right.
2:47
Speaker 4: As always, you know, Elon alluded to the fact that
2:50
Speaker 4: Mexico will build our next end vehicle, but we will
2:53
Speaker 4: also be doing that in other plants, and so it's
2:55
Speaker 4: really about getting them all up and running. We expect
2:58
Speaker 4: that to be a huge volume product and yeah, we're
3:02
Speaker 4: going to move that quickly over the next couple of years.
3:12
Speaker 5: Let's go through all them.
3:14
Speaker 6: Thanks first in not Buena Mexico, Marmos, that's great, congratulations.
3:20
Speaker 6: Uh elon a question on applying first principles thinking and
3:27
Speaker 6: innovation to an area that up to now has seemingly
3:30
Speaker 6: been outside of your control, and that is on mining
3:34
Speaker 6: and extraction of some of the key materials.
3:36
Speaker 7: I believe a couple of.
3:37
Speaker 6: Years ago you you had a patent on sodium chloride
3:41
Speaker 6: to extract lithium from some from some clays and spodyming
3:44
Speaker 6: clay and things of that nature. Any How, how does
3:48
Speaker 6: that fit into the plan of maybe bringing real innovation
3:51
Speaker 6: into a mining sector that could use a little you know,
3:54
Speaker 6: maybe waking up and getting those costs down, because that
3:56
Speaker 6: could be a relegating factor.
3:57
Speaker 1: It seems well, we're gonna address whatever we think the
4:02
Speaker 1: limiting factor is at any point in time, so we
4:06
Speaker 1: would like to do the least amount possible, So we
4:11
Speaker 1: don't want to get into the mining or refining sector.
4:15
Speaker 2: We will do that if we have to.
4:18
Speaker 1: I do think the focus really should be on refining capacity.
4:26
Speaker 1: You know, we need to make just a very giant
4:31
Speaker 1: amount of anode cathode lithium, latinatruxide, liatin combinates. It's really
4:38
Speaker 1: the refining capacity that is the biggest choke point. Yeah,
4:46
Speaker 1: so that's that's why we're building a lithium refinery in
4:49
Speaker 1: Corpus Christy.
4:52
Speaker 8: In terms of the mining companies that are out there,
4:57
Speaker 8: uh and looking at that part of the value chain.
5:00
Speaker 8: And so we do have large suppliers of lithium right
5:03
Speaker 8: now and they are aware of you know, how we're
5:06
Speaker 8: approaching the Corpus refinery and the technologies we're trying there.
5:11
Speaker 8: And the reason we're making them aware of it is
5:14
Speaker 8: because we think they're fundamentally more scalable. And as we
5:17
Speaker 8: prove them out, we plan to share that with them because,
5:20
Speaker 8: as Elon says, like, it's not really like we want
5:22
Speaker 8: to do these things. We're doing them because it's not
5:24
Speaker 8: happening fast enough. So if we can prove that it
5:26
Speaker 8: can be done faster, the intention is to transfer that
5:28
Speaker 8: knowledge to our large our current suppliers, and the same
5:32
Speaker 8: is actually true. It was actually a clay process that
5:36
Speaker 8: we were playing with and we continue to work on
5:38
Speaker 8: the same is true on that. So we've worked with
5:40
Speaker 8: our suppliers as well on trials and we're sharing knowledge
5:44
Speaker 8: there and the intention is just to help the whole
5:46
Speaker 8: world do this better. And ultimately this here is getting
5:51
Speaker 8: the lithium or whatever it is out of the order.
5:56
Speaker 1: And we're obviously building a cathode processing facility just adjacent
6:02
Speaker 1: to this building. So a little further down the road
6:05
Speaker 1: you'll see another large construction that's for cathode refining. But
6:13
Speaker 1: like I said, we'd really prefer if others did that.
6:16
Speaker 1: We're doing it because we have to, because we want to.
6:19
Speaker 8: Yeah, And in that case, there just isn't really any
6:21
Speaker 8: large scale cathode production in the United States and it
6:23
Speaker 8: needed to be done. And again, if we're going to
6:26
Speaker 8: do it, we're going to try to do it from
6:28
Speaker 8: a first principles perspective. So we have tried a bunch
6:30
Speaker 8: of new things there. We're confident that they will work,
6:33
Speaker 8: and as they prove out again, we want to bring
6:35
Speaker 8: them back to our supplier so they can build new
6:38
Speaker 8: facilities more quickly with less investment.
6:44
Speaker 2: Right, let's go to ben Hi ben Cala for bair.
6:47
Speaker 9: So similar On the renewable side, Is there more that
6:51
Speaker 9: you can do in Tesla to nudge the rest of
6:56
Speaker 9: the renewable industry to speed up since it's such a
6:58
Speaker 9: big a pillar of the master plan Three?
7:04
Speaker 1: Well, I mean, I don't know more we can do,
7:07
Speaker 1: but I can say that if there's like entrepreneurs out
7:12
Speaker 1: there that wanted to have like a guaranteed chance of success,
7:16
Speaker 1: it would be refining lithium or anode and cathodes or
7:22
Speaker 1: any any materials whatsoever for uh leathium on cells as
7:27
Speaker 1: no brainer.
7:30
Speaker 9: Yep.
7:32
Speaker 2: I think we're doing everything we can. So yeah.
7:37
Speaker 8: On the on the reneable energy thing, the thing that
7:40
Speaker 8: we can do Tesla is the more we reduce the
7:43
Speaker 8: cost of storage, the more we reduce the cost of
7:46
Speaker 8: stationary storage, and the more we bring like flexible load
7:49
Speaker 8: to the grid in the form of like cars charging
7:51
Speaker 8: at the right times, the more valuable renewables are. Because
7:55
Speaker 8: in like Texas right now, I wasn't joking like that's
7:58
Speaker 8: off or whatever. So so bringing really low cost storage
8:04
Speaker 8: onto the grid makes renewables more valuable. Which ultimately will
8:08
Speaker 8: accelerate their deployment. So that's how we focus on it.
8:11
Speaker 2: I guess.
8:14
Speaker 10: Felippe, thank you. It's Sidi Bouscher Jeffries. I've got two questions.
8:29
Speaker 10: The first one, when I think about in this industry,
8:32
Speaker 10: everybody wants to be Tesla. Every comic er is trying
8:34
Speaker 10: to emulate what you're doing well done. The one thing
8:37
Speaker 10: they don't do is focus on having as much growth
8:44
Speaker 10: as possible with as hew models as possible. So I'm
8:46
Speaker 10: just trying to understand, as you aim for twenty million
8:50
Speaker 10: units in twenty thirty, how many models do you think
8:54
Speaker 10: you need to get there, and how does it fit
8:56
Speaker 10: into your drive to hyper scale?
9:00
Speaker 2: How do you manage this?
9:01
Speaker 10: And also the fact that probably consumers at some point
9:04
Speaker 10: I don't want to see your tests out the same
9:06
Speaker 10: test at every street corner, So I'm just trying to
9:08
Speaker 10: get your your sense of that.
9:11
Speaker 2: And my other question is on.
9:14
Speaker 10: Bidirectional I mean, you talked a lot about making you
9:17
Speaker 10: know a world more renewables and better use it of cars.
9:21
Speaker 10: I think bidirectional charging is one way of better using cars,
9:25
Speaker 10: but you seem to have been reluctant about doing that
9:28
Speaker 10: in the past, so I'm just wondering what your latest
9:30
Speaker 10: views are on the topic.
9:35
Speaker 8: Sure, on bi directional it it wasn't like a conscious
9:43
Speaker 8: decision to not do it. It just wasn't a priority
9:45
Speaker 8: at the time. I think is maybe the way to
9:47
Speaker 8: think about it. As we looked, as we continue to
9:50
Speaker 8: improve the para electronics in our vehicle, we've found ways
9:54
Speaker 8: to bring brighter actionality while actually reducing costs of para
9:57
Speaker 8: electronics in the vehicle. And at allten Tesla, the goal
10:01
Speaker 8: is usually to get more for less, and so we
10:06
Speaker 8: are in the middle of kind of like a power
10:07
Speaker 8: electronics retool. I would say that we'll bring that functionality
10:11
Speaker 8: to all of our vehicles over the next you know,
10:14
Speaker 8: two years, let's say.
10:16
Speaker 2: But but it's.
10:19
Speaker 8: Yeah, I guess that's how I'll say there.
10:21
Speaker 1: I don't think very many people are going to use
10:22
Speaker 1: my directional charging unless you have a power wall, because
10:26
Speaker 1: if you unplug your car, your house goes dark and
10:28
Speaker 1: this is extremely inconvenient.
10:34
Speaker 8: Yeah, most of the value it comes in charging the
10:37
Speaker 8: car at the right time. It's not really about sending
10:40
Speaker 8: energy the other way.
10:42
Speaker 2: Yeah.
10:42
Speaker 1: I mean, if if you have a power wall that
10:45
Speaker 1: can take the house load then you can use your
10:47
Speaker 1: car as supple as a supplementary energy source to the
10:51
Speaker 1: power wall, and then you know you're not gonna drive
10:54
Speaker 1: one crazy by unplugging your car and having the house goal.
10:59
Speaker 2: So I think there's some value there as.
11:02
Speaker 1: A supplemental energy source down the road where if you
11:06
Speaker 1: have a power wall.
11:07
Speaker 2: You've not diminished the convenience of the people in the house.
11:16
Speaker 11: And the question of number of models, how many models?
11:22
Speaker 1: But if not that many, I'm really ten, I don't know,
11:27
Speaker 1: not that many. There's I mean what's happened with the
11:32
Speaker 1: conventional cars is people have run out of things to do.
11:34
Speaker 1: So if you run out of things to do, they
11:36
Speaker 1: just end up reshuffling the deck and you have pretty
11:39
Speaker 1: much the same. I mean, how many variants of a
11:42
Speaker 1: car are there on the road. There's like hundreds. But
11:48
Speaker 1: there are they good variants? No, mostly not. They're just
11:53
Speaker 1: variants for the sake of variance. But look at how
11:58
Speaker 1: have things converged with the phone. I mean, there used
12:01
Speaker 1: to be hundreds of flip phones.
12:02
Speaker 2: Now what do we have? It'll be like that.
12:10
Speaker 12: George George Genericas from Cannon Coordenuity just had a question
12:15
Speaker 12: about your plans to grow market share in China, and
12:19
Speaker 12: also whether or not the political tensions between the United
12:23
Speaker 12: States and China impact your long term ambitions there.
12:26
Speaker 2: Thank you. I don't know, Hey, Tom Nott, do don't
12:35
Speaker 2: don't swear too hard.
12:39
Speaker 13: Yeah, well, we're still growing up our markets here in
12:44
Speaker 13: China quite strongly, actually, especially you know early this year
12:50
Speaker 13: we had this price adjustment. After that we actually generated
12:54
Speaker 13: a huge demand more then we can produce. Really, and
13:00
Speaker 13: as Elon said, as long as you're offer a product
13:07
Speaker 13: with value at affordable price, you know, you don't have
13:11
Speaker 13: to worry about demand. That's basically the philosophy that we
13:14
Speaker 13: we follow. We try everything to cut cost from supply chain,
13:20
Speaker 13: from improve the efficiency in the factory, and to pass
13:23
Speaker 13: down that value to our customers. I think you as
13:26
Speaker 13: long as we'll continue to do that, I'm not too
13:28
Speaker 13: concerned about the market share in China. In the second part, Geopolic,
13:33
Speaker 13: no one else.
13:34
Speaker 2: We do our best.
13:35
Speaker 13: We we we actually create a lot of jobs to
13:38
Speaker 13: look low community, and we tender also.
13:43
Speaker 2: With at our suppliers.
13:46
Speaker 13: Factories will create a lot of jobs as well, and
13:49
Speaker 13: we'll contribute with a lot of to the local economy.
13:54
Speaker 13: I think you know, as long as we're needed in
13:57
Speaker 13: this country. I don't see there much.
13:59
Speaker 11: Of the risk of that, Colin, Colin Rush from Oppenheimer.
14:05
Speaker 11: You know, one of the things I was struck by
14:07
Speaker 11: in the presentation was the operational efficiency metrics that you
14:10
Speaker 11: guys are talking about. Could you talk a little bit
14:12
Speaker 11: about the velocity of learning cycles and how you guys
14:15
Speaker 11: track that and think about that as an organization as
14:18
Speaker 11: you work into a variety of other areas from a
14:21
Speaker 11: innovation perspective, if anyone wanted to try that, I.
14:29
Speaker 8: Mean, I'll say one very high level thing, which is
14:33
Speaker 8: you can't improve something you don't measure. And we're like
14:35
Speaker 8: ruthless measurers at Tesla, and once you start measuring things
14:41
Speaker 8: that contribute to operational efficiency, you actually have a path
14:44
Speaker 8: to doing something about it. So I guess the key
14:48
Speaker 8: is a good measuring stick.
14:52
Speaker 1: Okay, it's something I should say with respect to demand,
14:59
Speaker 1: which I've said a few times over the years, but
15:01
Speaker 1: it sometimes it needs to be set again, which is.
15:08
Speaker 2: The overwhelmingly the uh.
15:12
Speaker 1: There's the desire for people to own a Tesla is
15:16
Speaker 1: extremely high. The limiting factor is their ability to pay
15:19
Speaker 1: for a tesla, not do they want to eat Tesla.
15:24
Speaker 1: It's easy for people in this room to lose sight
15:27
Speaker 1: of that. If your income is far in excess of
15:30
Speaker 1: what a car costs, then you look at value for money,
15:33
Speaker 1: but you do not consider affordability. But for the vast
15:37
Speaker 1: majority of people it is affordability driven. This is why
15:41
Speaker 1: we cannot simply double the price of the car. Or
15:44
Speaker 1: you could say and think about things in the limit
15:46
Speaker 1: where if you hadn't you know, an infinitely desirable car,
15:50
Speaker 1: but it costs ten million dollars, it wouldn't matter because
15:55
Speaker 1: people can Most people do not have that, So demand
16:00
Speaker 1: is very much a function of affordability, not desire. Very important.
16:07
Speaker 1: One of the things we weren't sure about was the
16:10
Speaker 1: price elasticity of demand for Tesla's, so like, as we
16:15
Speaker 1: lower the price, how much does demand increase? And we
16:21
Speaker 1: found that even small changes in the price have a
16:25
Speaker 1: big effect on demand, very big. So that was a
16:29
Speaker 1: good thing to learn. Yeah, and then this autonomy question.
16:39
Speaker 2: Is very very big.
16:42
Speaker 1: Because it could potentially have I don't know, five times
16:44
Speaker 1: the utility of the asset that you currently have.
16:47
Speaker 2: So passenger car.
16:49
Speaker 1: Is ten or twelve hours a week of usage plus
16:54
Speaker 1: a lot of parking expenses, an autonomous car could be
16:58
Speaker 1: fifty sixty hours a week or something like that, and
17:04
Speaker 1: you could get rid of a lot of parking expenses.
17:07
Speaker 1: So you know, if this, if this is true, then
17:13
Speaker 1: as autonomy is effectively turned on for the fleet, it
17:20
Speaker 1: may be that it probably will be the biggest asset
17:23
Speaker 1: value increase in history overnight, Emmanuel, Thank you so much.
17:34
Speaker 14: Emanuel Raznov from Deutsche Bank. So, as you start launching
17:39
Speaker 14: this next generation vehicle and ramping up volume, what will
17:43
Speaker 14: be your nearest term priority in terms of segment or
17:47
Speaker 14: vehicles focus. The slide that you showed with two vehicles
17:51
Speaker 14: under wrap seemed based on form factor one of them
17:54
Speaker 14: maybe he looks like a van, another one looks like
17:56
Speaker 14: maybe like a smaller vehicle, like potentially a model. To
18:00
Speaker 14: what is the nearest focus for you in terms of
18:02
Speaker 14: ramping up the next gen vehicle and how do you
18:05
Speaker 14: make sure that by lowering the price point so much,
18:09
Speaker 14: because the costs is going down fifty percent, you're not
18:12
Speaker 14: cannibalizing demand, you know for your existing vehicles, I mean
18:23
Speaker 14: demand for our vehicles in terms of desire to own
18:25
Speaker 14: them may as well be infinite. It's indistinguishable from infinite
18:31
Speaker 14: at this point, affordability is what matters. So as you
18:35
Speaker 14: make the car more affordable, we will have demand go crazy. Basically,
18:41
Speaker 14: the issue is how do we build the cars. The
18:43
Speaker 14: hard part is building the cars. I can't emphasize that enough.
18:47
Speaker 14: The hard part is building the cars and the entire
18:49
Speaker 14: supply chain that goes with the cars.
18:52
Speaker 9: This is a.
18:54
Speaker 1: Logistics challenge of extraordinary difficulty. All the things that have
19:02
Speaker 1: to go into the car have to scale with the
19:03
Speaker 1: car while everything is doing an exponential ramp. And if
19:09
Speaker 1: you miss even one of those things doesn't matter. Why earthquake,
19:15
Speaker 1: flood fire, revolution, I thought I've heard them all.
19:19
Speaker 2: I mean, it's.
19:22
Speaker 1: Any part of that supply chain gets interrupted, you're now
19:25
Speaker 1: then you have a seizure. The hard part is building
19:32
Speaker 1: the cars, by far, and the supply chain that goes
19:37
Speaker 1: with it. You guys want to talk about the supply
19:40
Speaker 1: chains though, yeah they might, I think, you know.
19:45
Speaker 15: And the presentation I'd mentioned perfection is a passing great.
19:49
Speaker 15: We really need everything to happen perfectly, and the strategy
19:53
Speaker 15: for mitigating the different risks, some of which were anticipated
19:56
Speaker 15: and some weren't, is really bespoke to the situation. And
19:59
Speaker 15: then really the unique subject matter expertise and a deep
20:04
Speaker 15: knowledge of the particular supply chain you're managing to come
20:07
Speaker 15: up with those strategies. So we've seen everything from as
20:10
Speaker 15: Elon mentioned, you know, first the tariffs that flew back
20:13
Speaker 15: and forth, then the ocean logistics issue, a chip shortage,
20:17
Speaker 15: COVID floods, there was a fire and a fab in
20:21
Speaker 15: Japan that knocked down. There was a massive COVID spike
20:26
Speaker 15: in Malaysia where a lot of the chips to the
20:28
Speaker 15: back end of a lot of chips was down there.
20:31
Speaker 15: In more, this was one that Elon was involved with
20:34
Speaker 15: as well. And yeah, that's it's nerve wracking, but somehow
20:40
Speaker 15: it works.
20:42
Speaker 7: Yeah, and although it is difficult, I think we have
20:45
Speaker 7: been laying the foundation to be as intimate to all
20:50
Speaker 7: the tiers of the supply chain, building that control and
20:54
Speaker 7: you know, directing the different tiers of supply chain. That's
20:57
Speaker 7: the way we are trying to make it. The risks
21:01
Speaker 7: that come with it, you know, again, dual sourcing, triple sourcing,
21:06
Speaker 7: having redundancy is the way we've been trying to mitigate
21:10
Speaker 7: for it.
21:12
Speaker 2: Yeah.
21:13
Speaker 4: On that point, when we think about vehicles, when you
21:16
Speaker 4: think about three y as an architecture SX as an architecture,
21:19
Speaker 4: our next generation platform is more than one segment, and
21:22
Speaker 4: really we're thinking about all the segments that are available
21:24
Speaker 4: that we haven't captured and where the market would be
21:26
Speaker 4: and designing it with our supply chain partners so that
21:29
Speaker 4: we can go quickly through those segments for where we need.
21:32
Speaker 4: But to Elon's point, if you make a car desirable
21:35
Speaker 4: and affordable, you know, oftentimes it doesn't necessarily matter what
21:40
Speaker 4: segment it's in because it's one that you want. And
21:44
Speaker 4: we've seen that with Model three when a lot of
21:46
Speaker 4: people thought that sedan was not going to be a
21:47
Speaker 4: great hit, but we sell tons of them. So the
21:51
Speaker 4: next generation platform is not one vehicle, it is multiple,
21:54
Speaker 4: and it's on the segment that we will, you know,
21:57
Speaker 4: really try and focus on that affordability and desira ability
22:00
Speaker 4: point more over than where we start it.
22:04
Speaker 1: Yeah, I mean there's like, I think it's an old saying,
22:07
Speaker 1: like battles the one with tactics or is the one
22:09
Speaker 1: with logistics. The logistics challenges here are enormous, and when
22:15
Speaker 1: you start like being a very significant percentage of an industry,
22:20
Speaker 1: you can't overcapacitize. It's not realistic, and some of these
22:25
Speaker 1: things like you say, like well you dual source or
22:27
Speaker 1: triple source. You can do that maybe for small things,
22:30
Speaker 1: but you can't do it for big things because if
22:33
Speaker 1: you're if you're triple sourced and one of it's like
22:37
Speaker 1: having a plane with three engines, where if any of
22:41
Speaker 1: the three engines fails, you crash.
22:43
Speaker 2: It's like, you know, so.
22:47
Speaker 1: You have to eat the overcapacitizes, which drives your cafex
22:50
Speaker 1: up and it has idle suppliers somewhere and big warehouses,
22:55
Speaker 1: or you're designed to some overage that's you know, reasonable,
23:03
Speaker 1: and then you have expedite costs because inevitably there's something
23:06
Speaker 1: goes wrong somewhere and you've got to fly things around.
23:10
Speaker 1: So it's really just the rate of progress is the
23:13
Speaker 1: rate of which we are able to scale a ten
23:17
Speaker 1: thousand logistics problems.
23:20
Speaker 2: The most significant of those is the.
23:22
Speaker 1: Cell production, and so we actually liberately try to overdo
23:31
Speaker 1: cell production or self supply.
23:35
Speaker 2: To have that exceed what is needed in vehicles.
23:38
Speaker 1: Because if it goes below what's needed in vehicles, then
23:41
Speaker 1: with the factories stall. But then what do you do
23:46
Speaker 1: with all these extra cells? It's like, well, okay, so
23:49
Speaker 1: the much easier thing to scale up and down is
23:53
Speaker 1: is powerwall and megapac output stationary storage. So we can
23:58
Speaker 1: then overcapacities and sells and packs and scale production of
24:05
Speaker 1: stationary storage, which is much easier to scale than vehicle production.
24:10
Speaker 2: So that's strategically, I think, a good thing.
24:15
Speaker 1: Yeah, I mean the capex for megapac is tiny compared
24:18
Speaker 1: to capex for vehicles.
24:20
Speaker 2: And also megapac demand is quasi infinite.
24:24
Speaker 1: It basically as long as we are competitive with utilities,
24:29
Speaker 1: we can sell as many like it's yeah, quasi infinite
24:35
Speaker 1: demand for that really for multi tier many Taro White hours,
24:40
Speaker 1: and we got a long way to go to get
24:41
Speaker 1: to many Taro White hours per year.
24:46
Speaker 2: Then let's go to down.
24:51
Speaker 16: Thank you, Dan Leevy Barclays. I think we know competitive
24:55
Speaker 16: dynamics differ significantly by region. Cost dynamics different by region.
25:01
Speaker 16: We saw that with your China Giga factory, far superior
25:04
Speaker 16: cost to what you had for a month I realized
25:06
Speaker 16: it was a new factory. But uh, they're clearly different dynamics.
25:09
Speaker 16: So to what extent are the cost strategies that you've
25:13
Speaker 16: laid out today, Do they differ by region or or
25:16
Speaker 16: is there more of a global, one size fits all
25:19
Speaker 16: approach on reducing costs?
25:29
Speaker 13: Yeah, I think we're pretty consistent under the strategy here.
25:33
Speaker 13: We'll try it as as much localized as possible. Like
25:37
Speaker 13: in China, ninety five percent over ninety five percent of
25:40
Speaker 13: our supplying are localized all the way from a first
25:43
Speaker 13: tier to secondarium that the third tier, and that gives
25:47
Speaker 13: us general detrimentous savings on cocks. And we also have
25:54
Speaker 13: a very localized labor force, and we have access to
26:01
Speaker 13: scale the labor force in the region and Young's adulta
26:03
Speaker 13: region in Shanghai, and particularly referring to and among over
26:09
Speaker 13: thirty thousands of employees in China, we have probably less
26:15
Speaker 13: than twenty expats. So it's uh very deep localization we
26:20
Speaker 13: have done there to be able to have such cost structure,
26:24
Speaker 13: and we try to replicate this approach elsewhere and in
26:30
Speaker 13: different give factories. Of course, you know the supplier base
26:33
Speaker 13: that are different, the you know, labor market are different
26:38
Speaker 13: region by region, the country back country, but which are our.
26:40
Speaker 2: Best to to localize.
26:43
Speaker 16: Yeah, and and.
26:45
Speaker 2: I think that's that's absolutely.
26:49
Speaker 13: Give us advantage to compete with the all the ms
26:53
Speaker 13: around the globe. Another thing is you know, we have
26:57
Speaker 13: this direct selling mode like Zach's that you know will
27:00
Speaker 13: save with tremendous money on op acces as well. We
27:04
Speaker 13: have food controller all expenditures across the the company, and
27:10
Speaker 13: you know we don't spend money on marketing or advertising.
27:16
Speaker 13: Everything we saved and will become you know, the value
27:21
Speaker 13: we can offer to the consumers. So that part, on
27:25
Speaker 13: that part, we also followed pretty consistent strategy over the years.
27:31
Speaker 4: I mean, certainly the manufacturing stuff that Colin Pete and
27:34
Speaker 4: myself talked about, whether you make it here, you make
27:37
Speaker 4: it in Europe, or you make it in Asia, it
27:38
Speaker 4: applies everywhere. We think about that from the ground up,
27:41
Speaker 4: not not specific to any region.
27:45
Speaker 17: Yeah, just one thing I would add to Tom's point
27:48
Speaker 17: about localization and to Lars's point here, I would actually
27:52
Speaker 17: say that we're moving in a direction of more standardization
27:54
Speaker 17: in terms of our factories and our processes and our
27:56
Speaker 17: cost reduction approaches. So as we've been thinking about the
27:59
Speaker 17: next generation platform, we've been thinking about the volume that
28:04
Speaker 17: we aspire to build against that. How many individual factories
28:08
Speaker 17: do we need to build and what is the fastest
28:10
Speaker 17: possible way to expand that footprint around the world. What
28:15
Speaker 17: we've done with Model why is each factory is an
28:17
Speaker 17: incremental improvement of the previous factory, which requires engineering hours
28:21
Speaker 17: engineering spend for each factory design, and then you end
28:24
Speaker 17: up with factories that are slightly different from each other.
28:27
Speaker 17: And as we move towards the next generation platform, I
28:30
Speaker 17: think the term you use, Lars is copy paste, so
28:34
Speaker 17: to get it right from the first time, you know,
28:38
Speaker 17: certainly there will be things that we learn and we
28:40
Speaker 17: replicate and we make adjustments to but try to have
28:43
Speaker 17: as much standardization and commonization as possible which allows us
28:46
Speaker 17: to go as quickly as possible with expansion.
28:51
Speaker 2: O raka.
28:52
Speaker 18: On the sides, thanks Two questions, once for Zak one
28:59
Speaker 18: flush self for Zach. How do you think about the
29:03
Speaker 18: long term growth and operating margins for the business And
29:07
Speaker 18: when we look at one hundred and fifty one hundred
29:09
Speaker 18: and seventy five billion in capex as the remaining balance
29:13
Speaker 18: of that is that essentially the capex guidance through twenty
29:17
Speaker 18: thirty for a shock the multi trip reconstruction that you highlighted,
29:22
Speaker 18: how is that different from what mobil eyed does with
29:24
Speaker 18: the IRAM map that they have And can you give
29:28
Speaker 18: us any color on the AP four hardware.
29:35
Speaker 17: So with respect to operating margins, you know, we intend
29:38
Speaker 17: to continue to improve operating expenses as a percentage of
29:42
Speaker 17: revenue over time, and we're continuing to take cost out
29:45
Speaker 17: of our products and try to keep gross margins in
29:48
Speaker 17: a place that's healthy as well. And so you know,
29:52
Speaker 17: from the hardware perspective of the business, you know, it's
29:55
Speaker 17: our expectation that will continue to stay in a healthy
29:57
Speaker 17: place over time. And then there's a software portion that's
30:01
Speaker 17: added on top of that. And so Elan has commented
30:04
Speaker 17: on this many times about the impact that full self
30:07
Speaker 17: driving software can have on the economics of the business,
30:10
Speaker 17: and in that space, you know, profitability operating margins would
30:14
Speaker 17: be impacted dramatically. Specifically to your point about CAPEX guidance,
30:19
Speaker 17: you know, the intent of that slide was not to
30:20
Speaker 17: provide specific guidance, but to just be transparent about internally
30:25
Speaker 17: what our rough estimates are and to provide context that
30:29
Speaker 17: we think getting to twenty million vehicles per year in
30:31
Speaker 17: one taara what hour of energy storage is very feasible
30:34
Speaker 17: relative to our expected cash generation for the business. That's
30:38
Speaker 17: a number that we'll move as we learn. We may
30:41
Speaker 17: choose to vertically integrate more into things, we may find
30:44
Speaker 17: efficiencies elsewhere. To the whole conversation we were having earlier
30:47
Speaker 17: about do we do mining, do we not do mining,
30:50
Speaker 17: But the entire point is to say that this is
30:53
Speaker 17: something that's entirely possible based upon our.
30:55
Speaker 19: Forecast regarding the monkey to preconstruction. My point I was
31:01
Speaker 19: trying to make was that we want to auto label
31:04
Speaker 19: most of the data, and we can collect data from
31:06
Speaker 19: the fleet and then reconstruct local areas that can act
31:08
Speaker 19: ass supervision for those clips. Since we want to build
31:12
Speaker 19: a scalable self driving system, we don't want to really
31:15
Speaker 19: relay on stamps or anything, even though we could really
31:17
Speaker 19: build something using the same technology. But this is mostly
31:20
Speaker 19: for auto labeling, and this provides like precise three D
31:24
Speaker 19: labels for all the video sequences involved in the reconstruction.
31:31
Speaker 1: It's something that's I don't know if we touched on
31:35
Speaker 1: this much. But in terms of training, we have one
31:38
Speaker 1: of the biggest neural net training systems in the world,
31:41
Speaker 1: and that we expect to increase that capablely by an
31:46
Speaker 1: order of magnitude by the end of this year and
31:49
Speaker 1: probably another order of magnitude by the end of next
31:52
Speaker 1: year with some combination of Invidia and Dojo. So like
32:00
Speaker 1: much of the scale of that is quite going down people,
32:04
Speaker 1: and it's enormous.
32:08
Speaker 5: Maybe the final two questions one from Alex and one
32:12
Speaker 5: from Chris.
32:17
Speaker 20: Okay, Alex Potter with Piper, So I definitely want to
32:22
Speaker 20: ask Drew or anybody else up there for an update
32:26
Speaker 20: on dry battery electrode. Right, So, if you're gonna try
32:29
Speaker 20: to overcapacitize towards cells scale a lot of this Clearly,
32:34
Speaker 20: there's a lot of moving pieces and it's a complex
32:36
Speaker 20: sort of orchestra with the supply chain, but a lot
32:39
Speaker 20: of it comes down to dry battery electrode, at least
32:41
Speaker 20: to me.
32:43
Speaker 2: So how are you trending?
32:44
Speaker 20: That was the most fascinating part of the factory tour
32:46
Speaker 20: for me, and looking through that window and seeing that
32:48
Speaker 20: this is clearly not a science project, but anything that
32:52
Speaker 20: you're willing to disclose yields progress where you are today
32:56
Speaker 20: versus where you thought you were going to be. Yeah, thanks, right.
33:07
Speaker 8: Uh yeah, I mean as you saw right, Like it's
33:09
Speaker 8: this is this is a real factory making a lot
33:11
Speaker 8: of dry electrode in an automated fashion. We've made a
33:16
Speaker 8: lot of progress. Uh, it's it's a it's a spectrum.
33:21
Speaker 8: Like we we're perfectionists, and we we have clear end
33:25
Speaker 8: goals and we are every week that goes by making
33:30
Speaker 8: progress towards those end goals, whether it's speed of the tool,
33:33
Speaker 8: yield of the of that process, or the downstream process.
33:39
Speaker 8: We we haven't stalled out yet on the rate of
33:42
Speaker 8: progress either, and that's both on the eNode and the
33:44
Speaker 8: cathode side. And I think the great thing about where
33:49
Speaker 8: we are with the overcapacity that Elon mentioned is it's
33:53
Speaker 8: giving us the opportunity to experiment as we go rather
33:58
Speaker 8: than just being like stuck to something that we happen
34:01
Speaker 8: to kick off a year and a half ago. And
34:03
Speaker 8: it is here something that Elon has said to the
34:06
Speaker 8: team many times is so okay to scrap equipment or money,
34:10
Speaker 8: it's not okay to scrap time. So the way we've
34:13
Speaker 8: been approaching it is probabilistically, what do we think is
34:17
Speaker 8: the most likely thing to succeed. And even actually in
34:20
Speaker 8: the factory here you saw more than one anode line
34:23
Speaker 8: that they are actually operating two slightly different versions of
34:26
Speaker 8: the final process step of the powder entering the tool,
34:30
Speaker 8: and it's a competition, you know, which is going to
34:33
Speaker 8: be more higher yield, which is going to perform better,
34:35
Speaker 8: And we have the luxury to be able to do that,
34:37
Speaker 8: and we're taking full advantage of it to advance the
34:39
Speaker 8: technology as quickly as possible.
34:42
Speaker 2: The dir electrode problem is really quite a hard problem.
34:46
Speaker 1: I mean, we acquired Maxwell really just for the dry
34:49
Speaker 1: electrode technology, but just illustrates what a gigantic gap there
34:55
Speaker 1: is between something working at small scale and at large scale.
35:00
Speaker 2: And we've had a an.
35:02
Speaker 1: Extremely talented team of engineers working on scaling the dry
35:07
Speaker 1: electrode process and having to be reliable, consistent, and we've
35:15
Speaker 1: been grinding hard, literally and figuratively on this for quite
35:19
Speaker 1: a while. It seems likely that we will be able
35:23
Speaker 1: to scale it to volume this year.
35:26
Speaker 8: Yeah, I mean we're we're basically increasing the output week
35:29
Speaker 8: over week, like roughly one k week per quarters our
35:32
Speaker 8: internal target, and we're you know, we're tracking to that.
35:37
Speaker 8: I think the what you saw is effectively like a
35:42
Speaker 8: ton of material per hour per tool. It's kind of
35:45
Speaker 8: like hard to like rationalize like what that really means,
35:51
Speaker 8: but it's it's it is. It's different than like, oh,
35:54
Speaker 8: something works in a lab, it's like, well, when it's
35:56
Speaker 8: tons of material per hour, there's just different kinds of problem.
36:00
Speaker 8: Like even if you have zero point one percent escape
36:03
Speaker 8: of like finds into the enclosure that your equipment is in,
36:08
Speaker 8: now you have a dust problem and like that could
36:11
Speaker 8: short out some electronics. It's like just things like this
36:14
Speaker 8: where when you're on a lab scale you don't even
36:16
Speaker 8: notice it, but when you're doing thousands of tons over
36:19
Speaker 8: the course of months, it's like, oh, a new failure
36:21
Speaker 8: mode we found, and that's where we're at. But we're
36:24
Speaker 8: we're knocking those out though, and the team is grinding
36:28
Speaker 8: through it, but progress every week.
36:33
Speaker 5: And the last question from Chris, Thanks for taking a question.
36:38
Speaker 5: I have a few follow ups on the next gen vehicle. First,
36:41
Speaker 5: when do you think we'll get a look at it?
36:44
Speaker 5: Maybe a prototype? Second, are there any details that you
36:48
Speaker 5: think you can share in terms of the size, the content,
36:51
Speaker 5: the performance. And Then third, I think you mentioned that
36:54
Speaker 5: you would produce it in other plants in addition to Mexico.
36:57
Speaker 5: Should we take that to mean that you can launch
36:59
Speaker 5: it at an existing plant before you're finished constructing the
37:02
Speaker 5: new plant in Mexico.
37:06
Speaker 1: I think we'll actually have to probably decline that answer.
37:13
Speaker 1: We will have a proper sort of product event, but
37:17
Speaker 1: we would be jumping the gun if we were to
37:18
Speaker 1: answer your questions. Maybe another question if this yeah, yeah,
37:24
Speaker 1: I don't know anyone.
37:27
Speaker 5: Will willed enough.
37:32
Speaker 2: I have two questions.
37:33
Speaker 21: This has really been a very impressive afternoon.
37:35
Speaker 2: Thank you so much.
37:36
Speaker 9: Elon.
37:36
Speaker 21: I'm curious, as you've doubled and you'll double again, how
37:41
Speaker 21: what you've learned about sort of managing a larger enterprise
37:44
Speaker 21: and what you might have to you know, do to
37:48
Speaker 21: manage a bigger enterprise. And then secondly, I'm curious on
37:51
Speaker 21: your thoughts on how you know generative AI and you
37:55
Speaker 21: know these rapid breakthroughs in AI in the last months
37:59
Speaker 21: could help you make cars sort of you know, less
38:04
Speaker 21: hard to make.
38:05
Speaker 2: Thank you.
38:09
Speaker 1: I don't see AI helping us make cars anytime soon
38:15
Speaker 1: at that point, I mean, at no point in any
38:19
Speaker 1: of us working anything big problems, So we'll just chill out.
38:26
Speaker 1: I mean, I'm a little worried about the AI stuff.
38:32
Speaker 1: I think it's uh something I don't know which we
38:36
Speaker 1: should be concerned about.
38:38
Speaker 2: Uh, I don't know.
38:42
Speaker 1: I think we should need some kind of like regulatory
38:44
Speaker 1: authority or something that's overseeing AI development and just making
38:48
Speaker 1: sure that it's operating within the public interests. And you know,
38:52
Speaker 1: it's quite a dangerous, quite a dangerous technology, and I
38:58
Speaker 1: I fear I may have done some things to accelerate it,
39:02
Speaker 1: which is I don't know. So, I mean, some of
39:10
Speaker 1: the AI stuff I think is just obviously useful, like
39:13
Speaker 1: what we're doing with self driving, which is you know,
39:18
Speaker 1: some people think is an AGI type problem. I don't
39:22
Speaker 1: think it's quite an a GI problem, but it's certainly
39:25
Speaker 1: requires very sophisticated neural nets because the road system is
39:31
Speaker 1: designed for eyes and biological neural nets, so naturally the
39:37
Speaker 1: analog to that is.
39:39
Speaker 2: Cameras with digital neural nets.
39:45
Speaker 1: And yeah, the thing we've we found is just there's
39:50
Speaker 1: a sick if you actually look at our neural net
39:53
Speaker 1: architecture in the carts, kind of insane, frankly, nets upon
39:58
Speaker 1: nets upon nets upon.
40:00
Speaker 19: That's the visualization toold crashes open. Yeah, it's like so
40:04
Speaker 19: complicated that no one can misulace this right now.
40:06
Speaker 1: Yeah, it's hard to visual just like literally it looks insane.
40:11
Speaker 1: So I guess something like that's happening in our brains
40:14
Speaker 1: while we drive around, which is pretty wild, So.
40:19
Speaker 2: You know, I don't know. I think Tesla's doing good
40:28
Speaker 2: things in AI. I don't know. This one stresses me out,
40:35
Speaker 2: so I don't know what to think you should say
40:36
Speaker 2: about it, you know.
40:42
Speaker 5: Okay, given it's seven o'clock, I think that's all the
40:44
Speaker 5: time we have. Thank you very much for coming and
40:48
Speaker 5: se