Tesla (TSLA) 21 Apr 222022 Q1 Earnings call transcript

Good afternoon, everyone, and welcome to Tesla’s First Quarter 2022 Q&A Webcast. My name is Martin Viecha, VP of Investor Relations, and I’m joined today by Elon Musk, Zachary Kirkhorn and a number of other executives.

Our Q1 results were announced at about 3 p.m. Central Time in the update deck we published at the same link as this webcast.

During this call, we will discuss our business outlook and make forward-looking statements. on and based today. as are comments our expectations predictions of These our with events materially uncertainties, risks in differ results including recent to mentioned Actual could of due and SEC. the a number those most filings and

please During one yourself use Raise question today’s join to Please to Hand follow-up. limit button the one the of question-and-answer the portion call, and question queue.

Q&A, Zach remarks. opening will Zach some into have jump we Before

Yes. Thanks, Martin.

numerous most continued backlog. best-ever margins, we margin continues we gross Higher progress financial quarter, for vehicles, and we’ve profitability. supply generally QX margin credits. and progress was exceeded XX.X% carried that, including QX of a including records, making are financials time but the as our line achieved Just operating vehicle deliveries. Company. growing at Shanghai quarters first reached new automotive in series start excluding quarter cars a Despite prior today. make our XX% our being regulatory and when Last gross suppliers revenue, off bottom here, demonstrated at GAAP to nearby due interruptions, Thus, set COVID, levels and extremely shuts challenging Note and in successful factory to delivering impact our and positively long. pricing our ordered times for than delivered pricing cars cars delivery wait lower to quite

in as manner. increased no our plan prices, are material to a interruptions raw vehicle to we expedite costs Inflation, with unit Factory structure. action cost impact unable well. shutdowns continues Hence, cost-efficient to logistics per to cost also those Our notice. take little and occurred

vehicles, a slight mix profitable including Model the Y. saw Additionally, shift towards we more

business. severely regulatory relating the more compared energy to by a million continued of $XXX business The change without conditions, credit be vehicle CAFE has the revenue from recognized penalty, declined credit to revenue also period than macro same year. have the which of benefit last to in would onetime U.S. We impacted a

Our have stock-based systems, products, the new certain reduce, lower other revenue higher our expense import processes our our storage supply comp is a OpEx quarter. solar solar items. of for chip percentage which in of and by supply driven for impacted to continues revenue, and reflected need as of components volume

As April. ongoing leverage, margin R&D are factories going in Berlin record now that producing automotive costs of improvements customer a production our and are result achieved factories These commissioning started of be cars. will a operating XX%. for these we March in costs in in in over early our sellable given operating Austin late costs Note forward, as

remained free impacted to cash quite production. by related working Our have flows were strong, lower-than-planned yet capital

financing, have zero. nearly reduced our product debt, we Additionally, to excluding

mind Looking ahead a in QX. to keep for term, few things the immediate in

shutdowns. levels, we’ve due in COVID-related working as full limited build QX. quickly delivery production of as about in we’re First, our factory to volume is lost at get This Shanghai to total and build resuming volume will month impact out and a of Production to possible. back

gross Berlin I’ve ramps. those margins will flow in just inefficiencies to their as Austin our thus, And before, start and through mentioned Second, QX. are starting

Third, ASPs of to which our do headwinds. we these help backlog, have in will higher offset some

team, rate conclude We by second great year. customers our the year XX% new the in our the first of for and continue further to and the of above or want to believe our towards a suppliers I drive half strengthening growth our achievable quarter. financials thanking remains Tesla for

Elon much. remarks Thank has well. you very as some opening And

Sure.

quarter. margin and was and many repeating. it’s difficult but XX%. reaching be challenges maybe of once my the of a quarter Some Zach’s, redundant of a profit an logistics an shortages, highest chip with worth record was again lot by This will on many overall QX despite remarks operating levels, deliveries,

profitability record and the So, nonetheless many, output especially had able up to Shanghai the we Shanghai I’d COVID output really and really despite achieving to the They Tesla and team on due And challenges already our team have many like factory. running significant China factory. to congratulate in headwinds, the and of difficult a been with are back shutdown high-quality tremendous vehicles. Tesla number

Zach as remain growth of confident a in production So, XX% we XXXX in versus ‘XX. said, vehicle

I last actually increase have at a over think, we a XX% shot reasonable year.

Obviously, the with know, see. Giga past you in So, few will let’s as months. Texas Berlin we and ramped Giga production,

they and So, with two great factories with fantastic are rapidly. teams, ramping

new ramp always initial grows factories, exponentially. looks the small, but Now, with it

slowly, exponentially to very have the expect like year. I them in factories. of growing those end I high confidence initially but said, high by this achieving teams ramp with the And we So, of both volume

at of So, And we’re is trying to to the number also other which or optimized fundamentally Giga per robotaxi. for exciting. considered cost That’s lowest meaning a not wheel alluded a around it think a I vehicle Texas for cost kilometer, have would innovations pedals. opening, optimized -- new per dedicated are mile autonomy, the achieve that accounting there I That is steering working highly or on are it everything. fully that quite

so, it’s, product very production to think, volume XXXX. powerful of that I we And aspire reach a going where in to be

remain think I volume production next really Cybertruck the be driver of on year. a Tesla’s track will to So, growth. massive of we that And reach

like the are stage factories supplier that million really X million for once we’re their want only able Tesla an thanks employees crossed to say We -- months recently. -- amazing group, worked also And really And work, the journey. like I of day past units extra our have heartfelt and units we XX in the I’d night to have we to thank the again, year. -- that the gone They suppliers it’s aspire early is to to I’d head really at that thank mile. but suppliers a So, the running. and ensure to we keep basically XX hard to Tesla who’ve

not there’s, of surprised goal. become our year-over-year. that coming car way And exceeding future understand or robot in will for And Those my will Optimus annual of towards foreseeable worth mean, That’s next apparent along then, very, importance will several realize basically XX% I are years, be business, people The listen program. which we the years. course, carefully So, Optimus ultimately magnitude growth for the confident the are more more the was Optimus, that we insightful I we’re very the of who of so of the firm belief. rapidly remain growing basically FSD. did X% than than worth yes. Optimus And

and then, -- insurance So is growing well. of course,

the our address limited shortages We with solar. batteries that expect progress and to part

future this been never basically, excited Thank I also exciting. the to future optimistic I’ve year. than So, am And is we very expect batteries you. well and solar more or now. Tesla’s grow right about

Thank you very much.

investor for but the data provided there conclusions or Elon help first being first to his XXXX share Interventions FSD Let’s their is investors with not progress lines love made? And investor is, any Tesla go has per release, driven, mile on We question time optimism optimal data? to own question. with any historically can make accuracy. them other

with break in, it seen whole ultimately, never is I’ve Well, to which false as any more which to solve I’ve nobody for to system seems technology kind or through, involved The I’ve is ever in and been it going like development solve real-world Sure. comes where nets of seen to of really we’re we dawns have biological And full respect -- self-driving. but actually self-driving, don’t, down to artificial solved. has road full neural eyes. is you intelligence, that made what self-driving, full

to of full solve about you when really humans. in think actually, to and the for we where own reach that capability we people par Tesla full year. nets neural best exceeds solve way in to achieve that broaden a this on that significantly over think it, right is so, program, year. degree with now that self-driving, have join And program self-driving assessment to this order I we The and is enrolled XXX,XXX have to to And your we beta will or cameras expect

is rate of a And yourself rate of take experience steps recommendation, out And step every we full release improvement self-driving it improvement the back. of you’ll join with release. little But quick. forward, and my is one program two the new weeks. every a bit that’s the put of see beta overall, for incredibly roughly and note two So,

literally my reaching own that’s for recommendation your is it. try assessment So,

you. Thank

Shanghai The is, question second in QX? for Europe, will in or is be the have much What localizing the how time line shutdown will models production prioritized of X an impact in in Berlin? newer Model the

sort of coming And have vengeance. production. lot Well, are a there upstream where back days lose because Tesla suppliers Shanghai also Shanghai a we lot -- important supplier But of production. Giga of lost challenges of did many of is with days a

per output I will that weeks. arise, a So, Shanghai are we notwithstanding week quarter, Giga of we record issues albeit this I missing see from think couple new think

QX, be that lower, slightly vehicle also QX the rabbit on the then, QX par. production higher. QX maybe but slightly likely a of to call in be But substantially higher. may it’s hat means But out possible pull So, most and really, it’s it, we roughly be will similar and will

So, which you volume the why Model be Model my from point the vehicles have -- a And it’s of factory my cars you’re -- focused factories amount -- complete Y. to high-quality Texas producing this is guess. have is in Giga start to making least best from months we’ll variation, it and that’s where on a year units complexity to over able is seems of focused X. sort number Berlin X point It’s XX of be important then, production. likely small It’s the are to the which of that and and on in produce new for million and X.X Giga

But we’re week to that production. a So, from so around has X,XXX a better typically level start maybe taken it’s at sort of ramp, to now us little hopefully, getting get XX of the months less.

in The percentage how increases much cost measured you forward? next sold goods prioritizing you. a is, to in two material how Separately, out, price direct have, question vehicles one of example, mix roughly you do quarter and Thank exposure going years higher indirect? for of versus think versus raw both given do about

had quite front, on for but being maybe may of the about price that wait quarter, is unreasonable that this prices list we Actually, like mention I vehicles, increase profitability record vehicles increasing our we’re should long. the our it given seem the

the extends wait will vehicles And year. list that the next order, into some people of

of and will and prices ordered to XX happen months. our next supplier aware we’re So, the logistics X are over really that now cost vehicles growth of believe anticipating

the ordered arrive, year now. have a car we increases why the cases, that’s today in So, some from because price today will

have we long wait very we’re a obviously not demand-limited. list, So, and

production-limited -- are very production-limited. by We much

Raw material exposure?

Yes.

there’s Elon what to add exposure. to different to material is saying, raw ways Just calculate

couple a estimate of things way, structure to raw of around we’re the And we to simple to XX% XX% cost exposed think clarify that. materials. on I just our

experiencing expire, associated been reflect movement or higher or And we seeing in so with we’ve then with some as renegotiate some us has Tesla move, suppliers. general, of lag. that as in for cost which But So, in last there QX is we’re a be materials slightly pace as prices. now. contracts for based impact But well a In contracts commodity we the immediately pays contracts also prices for cases, than lag up in that them raw material have directly cases, our raw number QX, picked contract. directly. can a the quarters indices it doesn’t to it but quarter. increases timing in that And those on In have well. That as that so what do

to in healthy because will unprecedented these sure financially that can we contracts, so, have uncertainty cost material quite time situation around things we’re movement renegotiating what is raw of in scenarios where over and company And Elon’s align here, lags place go to we those that the they it’s hit anticipate four that increases and trying as of raw various us do various quarters. and the that trying look pricing out the put material make at next and to all the remain we’re point, an

laws dealership next versus Tesla Okay. very does are using why much. isn’t state-by-state a on the or in advantages continue to Tesla architecture you is, The basis why Thank vehicles? taking What Separately, it its federal? fight disadvantages? question XXX-volt

legislation the part on federal that variety to but So, would sales of from in all have of law override seen have not states, allows Tesla’s to willingness direct state standpoint, obviously, we’d enact Congress laws. the like such a we that

basis. unfortunately, And fight So want have to state-by-state we XXX-volt to the a you question? on it do Drew, answer

sure. Yes,

On yes, the it’s really XXX-volt case-by-case thing, so a thing.

better. XXX vehicles everything is and platform smaller Y, the like For some and X there’s losses wins volts, not with

the some ignoring that mass but voltage, bigger that to vehicles. about you we we’re not platform, nothing reality on really so, us are higher And there those at do as look on and and so encouraging advantages platform. It’s And power. a to like you that at really can go vehicles, bigger look there’s

Let volts me from moving XXX the needle. estimate might Basically, to It’s $XXX. quantify is save that that. just going our really not XXX

And way vehicle you’re the many through all changing things. the charging get system maybe It’s infrastructure to $XXX. entire

Yes, exactly.

in mean, But -- your or then, as and -- household power U.S., pretty And really, of they got like appliances I in well the XXX-volt XXX. in, it make in work So most a doesn’t that of much Europe U.S. difference, do say, the you’ve much as sort voltage.

big probably, the it very like to volume Drew, cost now, are for -- small XXX And do it want of to the some years from vehicle to said, XXX-volt but Like probably architecture and volts. advantages changing there’s the you cost sense needs pay high. really to it’s So, is then, a continue with makes long-term, to I it? an XXX

was XXX volts also say going spreadsheet exercise, to I just is kind like that right? of a

$XXX.

Sorry. side to battery $XX end current need the or or more electronics bit savings the $XXX. voltage. exercise, to higher and talking a you the less. or of to semiconductor actual power the on see power to whittled more conductor the a you torque, from like the requirements roughly have to there’s power so spreadsheet up, away it’s maybe going vehicles, full go On get little charging It’s been higher you’re bigger the higher to through about where program that like

But do we’ve small. questionably got And Semi so, the benefit X/Y the for everything consider we Cybertruck. that platform and for where and running is

Yes. It’s basically zero for robotaxi.

Yes.

sense. For robotaxi, make yes, doesn’t it

no. No,

this... Sorry,

good. Sounds

Okay.

the Let’s next go to question.

how kilowatt XXXXs performing the per dollars increase in versus is, expected the range question terms are Day Next set expectations of current during and hour? Battery

Yes.

Yes.

trajectory have and achieving cost progress the control, the working we we control but the Day, within our not shared the of commodity in goals costs. of areas sort five-year all all We’re on consistent across Battery cost towards areas those do we for all

we’ve I that’s get everything years So, us several to it the rate an where and yields that Model discussed out. point needed exception X, to will is to Similar take to call achieved.

in are provisions. simplicity and structural ramps. and material new our Our will and our technologies during higher-range battery priority initial on was scale manufacturing attain as And we XXXX we structural developing goals, we pack layer

probably structural next a think this pack in maybe, think I it we’ll exceed competitive with to be fair say nutshell, the and alternatives best that I alternatives XXXX will think is best later year. we year. the And

the some I Yes. know we Texas, And in than we equipment like proofs, existing spent in less much built on mean right? Xx we more installations. prior Like we’ve than here have how facility. technology it’s capital facility good the

in personnel. massive is reductions many run of huge both And those utilities we saving what and have automized factory. know to loads and CapEx, we’re So, how a are on on highly are basically We needed what in people those.

which over next. model understood. come about Elon this well as of the It’s the yield, in cost said, rate So, year time, and will really and like course is

Yes.

you. is, question secure raw size? to to the materials required Tesla does Thank to scale And how next plan extreme

Yes.

think are, just macro we like sort -- vehicle need separators, a something million, this the lot. for when XX levels, energy just lithium million say, really about what It And of need, certainly take of million, what want like accelerating X on -- advent extreme you of most to whatever the iron world have we XX like, factors action So, is think the a tonnage. for limiting are those because limiting million phosphate, of think nickel, really $XX a as of factors is of million, this size looking just the analyze depends -- of $XX about that at, million, graphite what whole, means. And the to to we the looks you It electrolytes. quite Tesla $X But will tonnage you future. like sustainable factors. limiting macroeconomic,

certainly we for a It’s cost responsible is now on cost single biggest a to and the refining the now, limiting growth in is right bit certainly it I right quite be -- growth think factor, think So, percentage mining sales. lithium and a basis. item appears of

totally X% content those lithium the just this, don’t around lithium Although is or X% ion who actual know the in for maybe so. cell, of cell of

kgs X a car.

in Yes, exactly. the it’s called the the X cathode. but by kg. It’s -- ion and heaviest not is lithium item like cell, expensive most far, cell

the or the that’s nickel phosphate. So, iron

have transition carefully to amount the materials sustainability. total can think looking all world out we’re those So announcements these are thinking at come. this call raw to raw in figure trying we to the details, needed And the on we some months have the exciting And and about of I got of but materials things. we all time -- through we’ll accelerate how we’ve enough to really don’t to go think we

to out also of thing One recycling Yes. cell we’re want is our committed to all at I factories. like call

now tons in directly cathode with that to Reno our week XX all recycling We’re of right and chain. ramping a supply material going into back reclaimed XXX

we’re at the beginning looking and life here. end So, of needs

out. And casting built newer But regrind or We doing that Giga for we we stamping Reno, are directly we example, all into from a today, that’s Gigafactory the plastic scrap aluminum of Texas with we here, like factories any batteries. or true its the since non-yielded where figures shop. said build and shop vehicles, was as we started

XXX% like them them door, And all but about really consuming mining the and them, raw we’re using not get concerned materials, in just them. so, of we when

Yes. great point. that’s a No,

built for front the and sort body has we’re probably installing in Model aluminum rear furnaces Y sort we’re -- a of storing for a Texas casting. we’ve that Giga like here for So, both [ph]

cast high the of casting almost die So, two-thirds pressure It’s aluminum. body. we’re

both, can was and use comes out saying, we’ve And as wheels from also really that from and aluminum take back fact, also just figured through then, melting put Elon can matter practically the that -- take we pass out melting scrap also Yes, melting aluminum any stampings and in that and casting pot, the any scrap we any of the other car. so, the pot. machine that yes. that -- And gating into

Y. be cars vehicles to all maybe cast in body the in throwing And cast legacy X/Y. Well, S/X, wheels So, sort for that rear gasoline of also well our pot of we’ll over the and going time? from aluminum be we’re the casting aluminum Model but recycling as part melting moving not to body actually,

At you. Thank what learnings to to are relative Shanghai? do from Shanghai, to the able rate and in the Austin expect or Berlin processes substantially different you factories? leverage new Are ramp you

we’re production we obviously teams through lot. the we veteran Ramp we’ve ramp -- X/Y have obviously sharing in because basically -- a And in what locations. especially learned have And faster learned. the than multiple that Shanghai we’ve now gone ramp Y

And we or prices this Berlin. us that lot a done production so, get complacent to a because and Texas have to simplify lead be within entitled, and the Y ramp we Model a should have want don’t learned we but should Yes. more, of to faster ramp faster

of our example, had in XX% less about casting, doubling we the a lot capacity body, for number but robots, for expect double we to But reducing almost capacity areas. a structural of the also robots,

relative and body standard the Yes. way a by size got to pack body over of the a is -- front line and you and rear Right. making the car. pack shop The structural if castings, for XX% structural drops

because, that the the assembly [Technical put have the general or seats Difficulty] is the We battery battery. cars. then battery, the the put and we in floor on we everything structural else

assembly of stations [Technical because the So there’s XX% our in of actually GA XX% Difficulty]. general and

we for going about really, this way forever. think to I So, waiting you’re you’re Tesla, about and the the cars, best be waiting think if like

waiting If every that we you’re be one it… waiting factory also investment, than all triple learning you’re last forever the take for is new to going because and better because

Yes.

will this that we robotaxi can be driverless Cyber Tesla futuristic When on unveiled? this can is Elon people something service? that question or as own, more the by to at a Next the product be only roadmap. Rodeo, Is details a mentioned vehicle on offered expect offering is Yes

product we think don’t we much. I on -- hold announcement to exciting So, the up too gun to want on an want jump

in event we’ll are get to do volume I XXXX. next -- So, aim and think, into we a robotaxi we more year aiming for but detail, product for production

rates is the And what question or All of Fremont last and is, current be Giga the to Texas at XXXX Fremont the rate Berlin Giga What production maybe of end run right. cell at and Texas? you do investors from of the run at in year? XXXX the expect

the pack. nonstructural using is XXXX Berlin Well,

they’re constrained does to production XXXX. transition not that. will not billing So, require hopefully but XXXX this by year, They later to current

nonstructural plan, of third We that -- also Giga accurate? go Texas the perhaps if risk a production here volume pack things well. -- the be Is XXXX as mitigation, XXXX have, the we in with But just according will quarter sometime in end quarter. capability towards as in at fourth certainly to and

bottlenecks thing shutdown little Yes. you in the other XXXX the And a and QX inventory had described. we the moment, China support to is would the at the sizable we QX, have excess semiconductor volume bit targets hence with cells cell I and and add like through COVID

can engineering in achieving modify XXXX pieces gives ramp design structural while maximize where be learning reliability, us equipment you what to so. just all that step, the ability pack of take we downtime by pretty to improve So, the upgrade key step the deliberate said, and to

million vehicles this a year, produced not is year would X.X we’re of it do output early solve to highly doing next production achieving XXXX, by we confident a volume but if but so. XXXX become risk not Yes. risk

Thank you very much.

go Let’s analyst questions to now.

Dan The ahead unmute question first Please from CSFB. from and go yourself. comes Levy

questions. the taking for you Thank evening. Good Hi.

or in first you cost Anything Shanghai just the of just the can kaizen what benefited drivers Was the quarter. some Fremont? what of through could improvement maybe in about talked you further you’ve improvements or that sort of quarter. Maybe in around were from First, just past? ongoing talk within the talk address you through it in

level, lower do structure cost produced Sure. in a Fremont. in I cars high produced than mean, cars carry a Shanghai at

cars is by our mix as Shanghai, impacted the towards so, average And of shift that. positively cost

seeing X did efficiencies manufacturing had we We’re but we Expedites amounts in as increases progress massive on for down a been progress the was QX side huge there. make QX, particularly large, bringing expedites. some the S has still on of also story and that in improves company. some. quite volume Fremont,

mention Special team record Fremont there goes the to manufacturing associates achieving at output we’re because and Fremont. our

tremendous Yes. The back doing absolutely a Fremont [ph] team Really the is quarters. job. from

Yes.

Like It’s you -- with the expedite should hard COVID. to with situation underweight. the crazy logistics occurred that

point, And unpredictable of part has to of team Yes. and supply planning also in the Elon’s portion been the Shanghai dynamic production Fremont extremely arrivals, the particular, with chain our our supply nature team and team, when often out before days We very supposed little of and is here. of it’s how to get coming, that is part a it arrive to part notice scramble chain. get kind figure there’s to shortage couple

quarters amount is the produce the before immense. QX a absolutely that and like so, quarter in even of to goes And Herculean that effort

professionals saying military, when talk tactics, a the logistics it’s about There’s it in talk amateurs like about war. to comes

Yes.

we’ve to costs logistics increase materials, those some down. about on and challenge So, as to of that capacity cost were there a bring talked efforts offsets I previously ton improvements, there’s there also despite but a raw mentioned, remain continues commodities. inherent Outbound

be battling inflation and for you’re to We much have some the X through, all that that the an just when given constraints. for of you’re there’s prices Second Prices the supply-constrained needs portion through higher we other the And initial question, goals that one know future. passed was back are affordable automakers. wide for of that be now Model foreseeable know are going of way a to EV price the was of of supply And to the market. vehicles. higher

But the more you of one prices look points. masses available the long over at time? over EVs progression widely time, to given making of So, the do how goal it’s of term the

least want been the difficult absolutely the EVs a I of official are magnitude we’re to true high. possible. be suppliers inflation numbers affordable when this think is for cost like is that severe think, I And And inflation to -- or XX-year to pressure. XX very likely so. with understate appears the remainder suppliers, We at talking what of inflation, as as -- continue mean, year to I the at actually make It’s under

and request in from some suppliers of XX% parts this XX% increases the seeing So, to year last we’re year. for yes, cases, to end cost

there. and a or mile. really transport they’ve with increases. the quite substantial. to cost -- end why That’s think lowest to -- those cases, But the we’ve with, we per cost it’s I think, with mean we especially prices anticipate I It’s respect things are orders robotaxi far, when autonomy, Yes. ever we our to I per of robotaxi, raised cost by like in inflation, then providing -- we consumers So, will up experienced. because that mile that X go then maybe times XX it’s pressure got know cost with have year -- you a some there’s lot more on and of out high,

And to therefore, accessible everybody.

some ticket. Yes. a cost it ride less our than will a I subsidized mean, ticket, looking of robotaxi subway or would bus projections, ticket subsidized appear at bus that a

Thank you very much.

Lache Wolfe Research. from next Rod from the to go question Let’s

Hi, to constrained you out -- EV a Tesla. you’re for the and broadly? the solve parse comments everybody. about but about trying ability Do initiatives constraint that and you optimistic do as see sounds supply your secure Tesla’s to working like are adoption inflation on and this more It to just feedstocks this I’m these on battery materials. internally you

is we’ll is short and cell with output the at potentially of will energy -- output factor. macro those lithium have the -- limiting does the we sort fundamental long-term down, our see at significant what okay, But year? and in the rate hours saying, That to at to sustainable cell transition for is is contracts cells faster? year basically, obviously keeping to the fundamentally costs start what’s as cost a can absolutely. long-term take term, It’s earth contracts -- the then But it sort gigawatt least suppliers, what factor limiting the but Yes, that whole increases. fundamental of the of world per looking ion run increase out

-- fast of element. see that So, it’s the Currently, the chain. to and of slowest, that in Lithium clear, least move a very world. the it’s lucky we be -- lithium. a not in everywhere. will a challenge lithium supply as And common almost not as being It’s that with present element ore there’s as is order shortage whole that

through However, And you needed take you used a can whatever need to a that lithium clay lithium carbonate sludge hydroxide basically lithium cell. as to the that’s to that’s then go series the still take ore in the lithium lithium up battery up to of with industrial be refinement lot equipment the -- steps. or refine need and of ore or whole

wrong, of where going this practically right front, the there think the correct I opportunities lithium higher So, And we’re it’s encourage -- mean, XX -- to I’m me the the a we margins. the certainly think software is I -- lithium fast. -- entrepreneurs to who help get are out now industry I think but industry if -- times extraction. spot into mean, seeing the I margins I to for very but The there’s is cost business. we’re if than need are lithium on the looking I cases I something mean, think price

margins you. the money? XX% is It’s -- talking -- please we’re business Well, you like for like business? into So, get some can people lithium lithium Can the do minting here. more

Interesting.

of manufacturing changes, to per we’ve the that second to be a goods see the of and in additional what from here, those Are packs, anode cost may you’re addition not that in sufficient And vehicle cells you’re is see happens commodities you given the just what out? you’ve that to well chemistry, cost tuned have giga that castings. of savings XXXX specific with impressive question sold lot cell per vehicle, you guess, even need So, as in it’s structural called that. suggesting we’ll seeing increase seen modest opportunities from those I a going offset stay initiatives and pricing My to to actually. terms -- inflation

in may costs. not And what those cost the we to is The don’t actually materialize, we hope -- does is increase pricing pricing if We reduce need the if slightly think we prices. in growth growth current further. that growth probable anticipating

refinement should So, there are control increases If making macroeconomic levels. amount the amounts lithium -- that if in obviously, competing then everyone But we materials, for vast currently printing of prices significant limited that we will is not and money and high there’s keep raw such to increases. price a drive environment. extraction materials, other significant anticipate raw governments if of don’t and obviously,

But, the a prices crystal is like, are us what -- going ball are to you if vehicle prices from adjust X the future a the So, delivered now. can that current to current months accordingly. what have for future, the we XX be we’ll tell in like

guess. best our is this So,

you if the accelerate as energy. sustainable I But to out, like to right, transition zoom said, is think you mission our

our materials So, to we possible are with existing as not down raw these quickly the to working figure how others of suppliers grow as out transition. and all slow to

Yes.

cases expand. some similar to like needed get to have a Reno what expand to because to counterparty directly it And comes or not should done. able rate done think the to the they we And to their everything with that’s in Gigafactory be we’ve and whether else, in built willingness at we involved be we that means down

so, needs going the we to the because be as like an a goal And It’s we it’s what unaffordable. inherently retard growth to slow done can’t is to will of a thing transition. that what not is that good outcome. have down And do affordability

Research. from New Ferragu comes Pierre question next Street The you. from Thank

Thanks. hear Can you me well?

Yes.

-- I’d $XXX very if did long And you guys run, sitting some ask I the math model and look it’s or you $XXX I your to questions so some about flow. Great. thoughts billion you have you performance growth maybe ambitions, on the maybe growth in at your you of if and first, your quick. of see Do given cash at the like was about. wondering billion decade. And I the cash something end free

don’t billion $XX today. going $XXX be I keeps inflation know. If might like crazy, billion

we’ll $XXX decade, what a billion less. see So, might you it be a but buys lot in

-- a realize know. sure. lot We’ll with I we’ll I Zach, that know don’t something of that’s don’t I that’s for know I do seems problem, it. -- I So, cash. try if like mean, useful don’t to

think we to -- have at a been we’ve way time. The one take this I step

are that share to, And capacity robotaxi. -- mentioned, have up alluded to investments that, looks and like then, looks for what right the Austin Elon And as robotaxi we some decisions And just installing to model as economic for happening about like get so, running. now and Elon there production. what Berlin are future the in economic the model

Difficulty] have way Elon this the I [Technical discussed and is so, And

just [Technical Maybe Difficulty] everyone

Yes.

dialed at and get focus use, size cash the robotaxis our model is as point point the the is what’s Optimus are So, to evaluate in the flows get then economic make that for decisions road, in, next. and where of then on to that to

you have follow-up a do Pierre, question?

[Technical Difficulty]

right. All

the question Global from next Let’s Trip from comes go Chowdhry next Equity The Research. one. to

Thank questions you. have. I Two

parts, of like question truck the compare First traditional parts? terms with have of was is all would production terms I number have in Cybertruck. the regarding will Nevada, number And in is how in Will Sparks. production the any Thank Austin? happen or The vehicles Giga future of I pickup second of in wondering Cybertruck that Gigafactory you. factory, of we on

I’m not parts Cybertruck mean, done sure we’ve Lars? versus comparison of I truck actually parts. a if regular

the on if want to still like [Technical of cells go it kind I Difficulty] down have Yes. what depends We -- you part. in mean,

Mention count.

there. about we’ve If of the pickup of save talked significant other we as a gigacastings, vehicle, we count don’t versus any truck hundreds like like simplicity that, parts structure traditional our or is their

half the I mean, is one car -- kind of rear the entire of cast.

the is design the takes with an all where ready Cybertruck the door impact. for and to take have we So, it and doors, long-term example, exoskeleton the

have We like So, really -- have door don’t don’t we reinforcements. the the Difficulty]. [Technical have we

counted how would parts probably I your back we the well general, say, them XX% moving I reduce old are in battery cells, always to So, I is at often in or technologies point, decide reduce But once haven’t architecture complexity, I count. to to don’t look ignoring while. reduce a parts that check because doing. less. I’m to XX%

right. All

Okay.

to Yes, Texas. far, lot increase by from the Nevada. for expand expand? expect expect output room increase in from there, to expansion There’s do expect biggest to we we Giga Nevada, but Do output be a and do Giga we will of

much. can Alex, Piper question next comes from Sandler. The very Alex from you us? Thank you Potter hear

can hear you Martin, Yes. me? Hi

Yes.

great. Okay,

point to the insulated may have other facilities? to in hand, So actually was Obviously, could Shanghai. which is of clearly, from are COVID first things continue out impacting China China. question that’s But any I there further plants that which extent it this had outside upstream going also other lockdown bottlenecks of gets at a if we supply impact

would be so that Yes. that levels suppliers. China but sourced fairly If -- high continue, worldwide. Giga at back But in production we are that elsewhere. our And Shanghai that there it would would our in are indications impact parts are some are production -- that are already all apply is and

big So, we don’t think is be this to going a deal.

Okay. Thanks.

question, Second have guys of higher experience couple last sort the over a is profitability that you improvement. been of the reflecting obviously, to lot "real" able that quarters, of

as as paying part Elon, of Another it you, were. no much we longer because we’re is

work Board the another of these have wondering are seemed the in extent Thanks. you well. process contemplating one to which of I’m in And past compensation and so packages, to quite long-term which the the

no discussions compensation currently There incremental underway for for me. are

question from from Colin next Thank comes you. Langan Fargo. The Wells

Great. me? Do you guys hear

Yes.

Perfect.

sorry built? to material out. is on follow-up, battery pretty quickly it Because How keep the years but important. supply obviously, on going can material that takes many be raw raw issue to seems the to side, understanding my Just build it

of to So, the think mining there shortage of place? a time like nickel sort -- switch sort nickel we do capacity see a facing quickly in that can you And are when or issue? enough even you related, for build shortage? lithium then And how to just we is LFP

take actively Like, honestly, substitution quickly cathodes the out because products do, were half our like it shortage, says more letter, a could which we because flexibility which of -- our our other able in conditions between of seemed just shows done to on to so there’s raw like competitive to question. I’ll that we And thing market to wasn’t but the in mean, right chemistry. well, be we side. the that our were quarter, give to there vehicles, response I cathode are LFP are it it change how pursuing material respond options. to last LFP Yes. it can cathode are in there us be many And the

secure that batteries going are world say would of of like what output. like actually, materials this. hard through So, And is side, guess, achieve a the already, all huge cases, total and like on are go use like not cathodes I very we’re we X% -- specifically way all, second cathodes, refining; of the flexibility into if plentiful mining to in many first is, I cathode the to the all, it’s in And of those or than the annual increase less scale. all in

side. So, cathode that’s the

really the I lithium. think, resource. of about a Elon spent time It talking depends already on lot

ground is to more for like operation Some rock like The and or refining of oil refining where and maybe little the is -- smaller expanding of brine getting the operations. ground, getting maybe out rocks on a of additional spodumene -- sort chunky some a it’s line, amount out of you’re refine bit blasting the evaporation. It’s liquid, of refinery. a resources just a the doesn’t that it paperwork an out a salt of little trucking there’s to bring it’s but also much not or like bit pond lithium

and on talking this about for projects years. have of it’s They lot a haven’t of to many X So year the next. line years. And all you’re been to in there of suppliers the time not like already to lithium scale pipeline we a talking come X out

growth I question. a of we the XX the stuff year actually trajectory they this XX have that this everybody know on get than to next the in we’re answers if don’t on, terawatt stay to on growth in Some to the hours the trajectory like to yes, into -- the of truth also we lithium more need to little of or space do currently need we XXXX are. what’s to But frustrating. going market this fundamentals and lithium is year, year past which on look demand, doesn’t supply when bear if

Yes.

Thank you much. very Fantastic.

to go let’s from from Goldman Mark question Sachs. So, the Delaney last

charge benefits owners vehicle charging much and experience taking network have But potentially times Tesla into network good really in in about to thoughts installs. wait a bring to really owners be vehicles comment able your very Tesla to capacity, non-Tesla afternoon. people was its the Good and the Tesla could in buy for orders. future. the a the more you help hoping the mean, enough sustain network, likely to important Yes. to other And U.S. have terms Tesla could way of good perhaps for questions. it you a make is maybe up I thank I to on Tesla opening latest certainly

Yes.

if know moving yes, has on is being was. not that and all which add. world, said the where Elon as in our want original do are As different vehicle we’ve publicly solutions we more with North access our pilot provide connector in just committed, are And over working to in in others, a plan America, we third-party direction. little bit to but we I problematic than don’t you Europe,

-- yes, be want we there’s thing do to the system. right on that’s that, to think said -- to more but whole the I respect nothing Yes, with we’re

And adding on chargers. we’re faster going

growth the important. the were we’re and anticipating then producing overall With what really charger that cars of you is discussing, capacity

has supercharging accelerated. in investment our of pace the so, And

Absolutely.

corporate Okay. you question, you in Insurance, Are have insurance more in metrics could you there Tesla And Thank on roll states. particular, more the second offering profitability average? been on can do rates That’s what to out And margins helpful. any details it like? the for how share my compared on any as you. share take

in just that So, this insurance real-time step earlier Maybe week. Colorado one share. Oregon for Virginia, Insurance I’ll Tesla we and launched

is based Tesla next our this quarter, upon of quarter, information Teslas maybe early by But insurance the the the is market. Texas the Texas. end And Teslas. have, largest in we longest-standing the be real-time of of second insurer that insurer State we’ll of largest So, possibly

the this quite to I Monday so, a stories of insurance. who reporting saving to reception previous three new was And amounts And folks social we the launched of substantial lot on customer relative after their media are been quite reading in positive. states, has money their of

quickly as our to which the the Insurance at of end we’ll And And having pivot get this so, product in of U.S. by encouraged we’re can XX% we to quite we’re access attention point of Tesla expansion States, a United that. as by to the to customers working outside year

I’ll model say we thing with insurance different underwriter, and the three we because risk. other also is the is The on now holding these are the new states, are now

insurance of are very those it’s we still so, vertically systems the early. provider the a financials from states, with program, And to integrated and With of fully financials. respect

the program on as gets scale, so, And that. to more happy share more information

the real-time seeing owners Tesla And isn’t. okay, or my is ones are this it noticed the they habits that resulting affecting insurance -- we feedback real-time for cars rate can in is driving that -- a they on, because way having I see driving feedback actually the get in safer

so. if people do loop following my have And it driving when they like feedback to a insurance, real-time pay habits, real-time a for in realize, an I very score, so, driving they then I and the they -- changes see see a safer incentive then make driving less for -- in can

actually, seeing to net their causing which drive in people is So, it we’re it what is -- also good. is cars manner, is safer a

rate just take this extremely think data, but the in than become the see I what product. passion has data, bigger benefits. It’s the safer see for us It’s retention in past, point, a these and real the that have this average, We experience economics. for about program Elon’s to the I’ve talked And for lower. we on premiums are who customers high in we

We’re make customers, little roads do trying for a good thing save safer. our the a money here to bit and people

Yes.

both improves large Most feedback the we order the loop because of see minimize efficiency. of minor, probability then if we we the like And sort I that the that in but Tesla software can how about change think or there It’s macroeconomic it also just overall a see we exactly for what of accident. accidents crash, or is are car to caused. design small, think for repair associated fast? like would same-day with it night a repair. to accidents of day sometimes aspirationally, out Like, And doing difference Tesla have the those -- accident and is claims super are while a figured is which be occur do make month and to less having settled a you collision, frequently? we because wait how do how compared collision also that insurance repair

loop the instant. is Yes, feedback

Yes.

Right.

do So, management I mean, we claims in-house.

the centers can, estimate. we to accident, receive an with that support work repair. there’s prepare the our do so, And And the use of our customers, to we collision the notification we

end-to-end inefficiency, This then insurance, teams, teams full to visibility. reliability product. the And of all elsewhere, back And those our areas identify that, can improves or engineering of the cost actually the of product. feed Elon’s, software to lowers of so, improve we it’s cost

it’s So, circle. a full

experience repair company a customer better vastly repair is a an no accident, center. a compared this We’ll the immediately. it and as just insurance Yes. if and And basically. And there’s argument. be is can because And there’s then to an arguing this nightmare basically, with claims adjuster then collision

a a So with Insurance. we’re into trying dream nightmare to Tesla turn

very this Fantastic. quarter. Thank you Unfortunately, much. the for we that’s have time all

you So, your months. three speak thank for again and in to you we’ll much questions, great all very

Thank you.