Tesla (TSLA) 21 Jul 222022 Q2 Earnings call transcript

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

Our Q2 results were announced at about 3:00 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 or SEC. the a number those most filings and

please opening During one yourself remarks. Instructions] before Elon? question today’s Q&A, into [Operator to we follow-up. limit jump the one Elon of question-and-answer But portion call, and has some

Martin. Thank you,

Tesla Shanghai things few supply and quite sacrificed our team to years. overcoming chain running subject and of our a of the Shanghai lot was a So, But unique and our control. and difficult QX awesome outside Credit year. obviously kind quarter to to want prolonged been we it’s this Shanghai. a history. few past The hell a achieved supply I our of force for have shutdown was and chain back due a Tesla several been have in June, a emphasize one Fremont force in as of as a majeure, of just spite was half both we years to factory. factory get result, up it factory to the who in a the in to June team huge thanks output. the challenges Most all achieve And strongest for for in QX Tesla for challenges, the entirely do production recap, importantly, potential records these record quarters second of record-breaking majeures

our cars enough cells emphasizing XXXX it all Texas next XXXX we hopefully week to the this vehicle in expecting have of vehicle production will X,XXX good some important Baglino with address to later remainder the X,XXX a To So, exceed June. and we XXXX few of questions Berlin. that But is milestone, week Giga progress of sorry, the also with be We milestone making worth year. ramp are the the production for cells we – And the Drew currently in in are clear, months. call. an making cars satisfy with per achieved the

we for established is That XXXX. have generation and on year. factories be said but Fremont important installed And So for our not continue expand to dependent Texas. XXXX of important next like this it the XXXX we year equipment not are even cells in manufacturing we Shanghai, at capacity. second will

the capability to have the with every over we with Regarding now Streets driving very XXX,XXX happy beta capability City system Autopilot, of FSD deployed we to week. and will They are our continue it owners. improve

over probably think We than be FSD than miles beta. have more are miles any now autonomous we combined. other all – any That’s companies it aware driven company more than more with of, – XX million might I

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advancements of So manufacturing lot in a made we’ve processes.

we We and deck, XX% castings. capacity per Berlin. world’s thanks to now make large largest reduced – count we Austin As show shareholder castings, unit in body by welding robot the our of the in the

vibration and it’s superior also a lighter, has roughly that it, is should noise call harshness. would than smaller roughly that’s, case. body And I shop Xx normally the cheaper So be say

every over. this not So, level. But it’s is good on journey

talk to but that products of another will future. level be with quite improvements bring we simplicity Cybertruck future manufacturing ready the unveil and I to very exciting now, in will about are think and We not

Our also detects that imminent vision tension feature been collision, if system seat which the builds, introduced done a before. safety team has never

can that the tension seatbelt. you time have tensions impact seatbelt have only So, you very little that a upon you imagine if to

– If you XXX% before seatbelt crunching the car got occur about but actually have the we has got vision, be tensioner, a trigger collision we is can happens. actually it to to to probability be to because that have with see

we is And the just safety advantage we there This least APX not seatbelts this with is update, place even feel. can we that than so a In Teslas airbag exited conclusion, in the in be and is because tension rate that a are all an production cars able also strong we to hardware. something so that And can ever will at offer. can adjust over-the-air deployment, before. fundamental see, have now QX

production Our team on design. continues future to platform and focus Cybertruck readiness some

next to And year. still – that be about excited very, expecting the are in We Cybertruck production product. are be we expecting with to in of very middle the

I best think our product actually might ever. it be

see. is will year. end be regulatory this before And approval, be releasing Europe also FSD it to and on of the world. Let’s track of for American if of parts hopefully, all And customers the some we other North hopefully beta get in released we

in our AI hosting few We Day a are months.

in are AI what will be to we show amazed Day. people think off I able at

forward during all amount basically, Super And a hard Thank appreciate year. work these half to you. So times. employees to it. their super look our this for there of suppliers second the and of to in tremendous challenging want I is thank

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

on congratulating Yes. the during team Thanks, excellent second the an execution quarter. Martin. to I want by start Tesla

made reduced progress vehicle quarter. production area global particular, exited Shanghai, the substantial COVID-related nearly as shutdowns every rate of our we to we and business, in in due Although in production volume sequentially the our

reached our are resumed factory, factory Austin and factories their Our production production new through initial Fremont ramps. team, progressing by in The and supported Reno records. full our new Shanghai Berlin well

years. the as team, many Tesla I personally profit gross record many business energy the I to in volumes with know are achieved highest listening. of entire thank solar our want you Additionally,

embodied thank their margin, had relentless our in quarter. to gross and impacted support it I Shanghai to in The GAAP remarkable for also support pursuit on and and complicated want regional have You costs during meaningfully of capacity implications also decline On another suppliers automotive of production a mission. excellence factory volume restart including margin, sequentially the declined temporary XX.X%. idle mix our deliveries. of

are are those had Additionally, the as margin but previous our factories we inefficiencies ramp have through on calls, which an well, factories, impact new as discussed on online. of come progressing working

and continues our pricing in logistics. benefit on inflation, we supply to experience While by a economics. flowing foreign cost experienced increases which progress and from to energy cost QX, aided business see structure higher coming progressed unit from The some commodities through, solar exchange-related continue headwinds, alternate online well

Our the second Powerwall both storage year. component-constrained which half remains some and we Megapack, in the business alleviate of hope on will extent to

patience wound and greatly now their startup are factories the customers Boston and COGS. as down have we of appreciative our shown flexibility while these automotive moved operating costs through Berlin-related We are reflected costs work into by and these in have Within challenges. expenses, production

the within a holdings, other. cost included holdings impairment charges of a our converted by gain, netting majority the our Bitcoin for restructuring to we on remainder and P&L to offset Fiat $XXX Additionally, of a realized million

We also restructuring related charges targeted incurred to staffing reductions.

was COVID to the our Bitcoin in that should we it alleviate. we mentioned bunch China the sold when that of reason a holdings uncertain actually, Yes, were as would lockdowns be

important it was of cash uncertainty COVID China. our given us So for lockdowns maximize position, the to in the

our future. are We holdings certainly Bitcoin open to in increasing

COVID Bitcoin. It’s verdict should on of sold not some liquidity taken in shutdowns overall we about any concerned just company And as given be have our this the Dogecoin. China. So were we that not for

it. We have still

We have still Dogecoin. our

margins our XX.X%. one able to Despite operating these were of challenges, strongest we still achieve of

cash free the to by related impacted shutdown. flows were Our factory Shanghai capital working

working expect we in flows will a cash as our QX However, as benefit this capital-related restabilize. show

Elon as half and record-breaking we mentioned, the ahead look a of we second for are positioned year. As

are quite to about of as inefficiencies the continue progress, and We Berlin things the keep our A margins this. year. ramp mind will on balance Austin weigh couple we in to of excited for

we as increase ramp. However, should the impact reduce

to before, pricing increase see we’ve we recognized to as mentioned our as continue through. Second, expect backlog flows to global

And also in be XX% builds strong our reach pushing target this more we for execution However, become no with Elon more still and the are This events majeure balance year. continue as remains macroeconomic-related to more story. growth losing despite year. expected, increases will the than has cost to possible difficult, mentioned, of it finally, QX of part but force

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you. Thank

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version? Will both next this latter, the If terms? a will object Tesla difficult can a explain moving makes for later The space static you. is what question have Thank it vector layman or in when problem network? vXX a be you unified and

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next Thank long-term? the Can company cools More question lowering lower will you. by prices? prices how auto you inflation do elaborate and what mean once recently The you you tweeted the pricing broadly, aggressively is cooling think down. about down on do Elon about how

Yes.

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over that We have to is of period the anticipate rate time. what inflation probable

dependent decrease will are we see the I there that – towards is of but do. I or macroeconomic prices. It’s trying possible not need rate would fundamentally car indications think in end our if this what this to that’s inflation guess I When then not So on would inflation. something take the be with we control. we could to inflation declining, that increase to slight when a salt, a year. of car prices, and we this is If It’s were grain decline we

I error. We you grain to but This economic lower. anything prognostication do of know – fraught guys it about... with seeing Yes, take a want salt. prices is you certainly trending of don’t is commodities – if want to say are with making

Yes.

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has it’s kilogram, $XX lithium bad of every $XX On We so the a price to used more but it’s that kilogram shot to be battery side, metal than up. spectrum. of for example, situation not a the is kind a really

down. Carbon aluminum steel, and carbon trending [indiscernible] aluminum, started steel has

of early benefits the later part see next or probably of will We it year year. only this

year. we or Yes. next like most the I that’s But downward think year this trend a just for end of are commodities, towards seeing

once to The business. urge the pricing commodities, would I is again harder. relatively insane. The refining Some is lithium the much easy. of lithium refining like entrepreneurs is to enter mining

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You It’s money. licensed can’t lose. to print

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of energy. accelerate the to Well, is Tesla is Tesla’s – advent goal sustainable

sideshow is sideshow. to are a the really We – not cryptocurrency

is we about – and scaling earth, about to think record around of a lot. think something transition. advent a of the not it’s not heat cryptocurrency accelerating the production waves – sustainable urgency that we energy, which so So, lot a We the are emphasize

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We’re there neither cryptocurrency. here nor on

XXXX compared to optimized. to the Thank do structural due solve noted yet share XXXX, general cost the need structural you. of you traditional cost not pack? please technical XXXX terms on pack of packs mostly or plus that be improvements The next when in some in XXXX is scale Elon issues? question Will Can path to we efficiencies

to Yes, architecture? want do you the do

Yes.

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an getting, Now to because a it potential is a aspirationally like pack, better architecture. is I there unequivocally new, which battery than we then will A don’t But the get sack carried know, start within C a so… is off of for radically better and potatoes,

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Yes.

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to same though initially days to this over lighter tanks cargo And is the very wing is until like fuel battery will, refinement, pack – cargo. fuel And like get planes dual with electric you of fuel it and a a realized makes early is so were of superior that carrying it should actually, the be it’s further And use tank they substantially as that the tank. aviation as better. very much time, of vehicles. and analogous carried And as where a is true

issues? about cost on scale solving or they due are And to improvements, technical

scale that mean are things core I technology. and costs and Yes. really, of tech the improve Yes. two economies

Yes.

issue not technical is the I right. think

like… issues Technical

some access. Like to right? the you optimal always start Getting with design,

it can done is It’s that’s call might think but a initially. how know it you not what it you’ve people you really times. that Some couple don’t it that, you get until of

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alloy, to figure out example… machine Yes. new an a you you new need casting I then need cast with alloy, might the you it, then mean, need create to to ramp to how as the

We did.

done castings. We’ve have it We like for rudders. done it for

So, yes, like it take does time.

of I vehicles early that Constant are something improvement we couple and mean, talking like... made with a it’s like like weeks design their of is something that ago, the used front the here, we’re casting to went beginning. we’ve into the and since the is first we version done vehicles our even

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with C, the because we are B-. keep So we’re we not like of at C+ a going to think to tag happy I maybe got a now

will for On the But rear transfer casting. the with this casting. improvement

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to than adapt include the the the that as So casting, a master extend as we’re a there’s fact that with to the well of opportunities but also rest already for there’s and reduce still better current way casting casting. vehicle of casting the lot parts more

the through have cost the we right? right the in it’s just Like right the thing, the And we body, the places, plus do and gone to I have right I we mass Yes, going only in just think same are the evaluating either, places iteration. and pack integration, amount. the was one insulation the pack say not we’ve

Cybertruck. one B-plus we’re We’re another mean, doing A certainly learnings do – going I a the That’s architecture. is and with to in a taking next version the hopefully target.

how progress? feel or you. Andrej any going? do on the you does FSD Thank next is significant question have The is, potential of Karpathy timelines impact leaving is progress And

a Well, code himself, the since irony. to have by all come Andrej was things naturally, grinding halt. It’s writing

extremely he of level decided is people Andrej I talented. confident But think And does for still it full individually. converging a AI also to But coding wants at that are that. I have know this and to to academic seem self-driving has be core we I we more to group it solving an we’ve [indiscernible] think – of So, to seems be AI XXX It my epic. though software this as seem will Andrej. are year. highly full and we get back contribute like to does will I’m about – says solve team self-driving on I year. Chris, respect people are think, got in our He

Thank And producing going? how is next yet? ramp you. the Texas is is, XXXX cells question The Giga

Yes.

But So XXXX. now, and on leveraging are Elon supplier sufficient ramp we Texas quantity we Berlin. we mentioned, right have progress to as are making in which cells,

output well to Since yields. XXXX improvements major to there, unlocking year, in at for production increases of and that, end expect week X,XXX electrode Kato the tool grown the has about fully before Kato, We per automated [indiscernible] we month-over-month March XX% the – because production exceed We Berlin at few by and of ramp each total to and In higher drying feed of QX, performance in month since, before. design lines from direction did Cell and a in-sourced most throughout simplicity. cell in Manufacturing additional trending are copy. further learnings pack to and Fremont carbon manufacturing yields there, in content. and was revved unlock we factory already areas that others. and and integrated Texas were a lines the targets hopefully

equipment to of sets these and For quarter, end to and some fully commissioned of first installed reasons, overcome ramp the and we Texas line. Berlin. there Texas car was cell the are commissioning challenges new cells produced our Specific last through in

of this quarter the exceeding is year. Our begin end to Kato output for Texas of and target Texas to weekly production aim be for before capable this

in much. next you well, but next Thank everything on is question. The very has XXXX that covered question as think I the was Drew

and question production supply is So with battery about is other cost of and the following How the How ramp impacting the these components? to in Austin other to situation Berlin. inflation of of regards with profitability regards plants? semiconductors, cells

that. take can I

So Tesla X,XXX silicon pieces about procures from semiconductor companies. XX unique of

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course, major we of see don’t COVID-related components, the So barring unforeseen problems for shutdowns. any

largest commodity-related given impact handful across of It’s QX common yet that add inflation of and last common question. broad evenly the suppliers supply issues to on over factories, increase fairly part on the increases the quarters or profitability the our was cars. Just the chain. our spread to

increases mentioned last that I over seeing ticked QX we So was QX. up course it the rate up I more had at the of think then in again It have and increase been in year. ticked before of

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it financials. it pricing does and our managing partnership continue we’re with but suppliers in that something is our So be to impacting with

And question is, Thank you the the very be last officially Cybertruck available? much. when will

start to middle delivering of year. them hoping in next We’re the

Great. you now go questions. And much. let’s Thank very analyst to

unmute question Street feel New from comes free first Research. yourself. from The Pierre Pierre, Ferragu to

like Hi, question structural and technology taking where efficiency pack. ask question. to XXXX density map guys. to and on Thanks the battery I’d the you a for at my you energy Battery the And I’d and on like love road Day. understand that described stand

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Go ahead.

range you a very, the and high were fully very Texas empty why behavior because cars Model and noticing asking to high on range, like guys shared recharging software. Twitter these have very mileage, is experience Austin Y artificially And like had behaviors very about I’m smart like and who like reason limited that that suggested in in from trying from maybe that

So kind and of battery of on I’m at moment you’re just building XXXX the trying the back understand with how the edge range. much an to

Yes.

to before, Let on our answer, the during priority and simplicity scale as a structural Elon and me super just try like was ramp. XXXX battery initial really mentioned straightforward like provide

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Yes. it the ramp inhibit Maybe putting production the the right the of XXXX. is little that that of is way issues of dozens our on another focus – now

that the to of been when material lot Some because the have challenging electrode a process. it’s revolutionary, dry more revolutionary be of ones something resolved. anode-cathode feeding this we’re using unknowns is have But

of So on – but making point. it’s very we’re confident difficult. resolving unknowns those yes, progress It’s rapid we’re that

order that first enhance of and right, the is get high the and within to to really volume So of get and rapidly reduce cost very high iterate reliability the density business basics cell. energy the the then

yes. agree, Totally

Okay.

we the that good are a is outcome. the counterpoint say outcome of confident perhaps some but is is of It’s not. I’d highly exact of debate

a that congrats Yes. we Kato excited quarter Specific and team team is the in advance this to past to made major the about, for the dry really process, that. achieving

is the rate transition chain. the is should fundamental is I per as transitioning cells. This addition limiter to batteries with for in as fundamental And emphasize cell storage Tesla goes the our fast production also and battery that vehicles. Tesla But supply for of you intends can our we grow amount suppliers entire limiter for not can, what as because stationary to though for two their it sustainability, need suppliers to battery The of they output do. output The rate both that for year? the you battery to of is our battery displace want suppliers pillars to and the sustainable energy sustainability how fast the possibly can grow

yes. So

want not I Yes, scalable. these mean, lot are of stress I’ve I most of energy higher that scalable to just not a seen. density necessarily from them technologies are what

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me, answer technology with transition the so the economy. grow? can there breakthroughs, battery to transition issue cell to entire is How technology from where zero ask faster faster often Even we refining for Earth could The at mining grows, People to right me, breakthrough The zero energy some literally sustainable we you if the it from no. is rate to in sustainable chain the world fully sustainability? energy. much ask technology a is needed now, the supply transition that often fast It’s to production. if is to fast growing the very was which

where actually is. my is exactly great This a follow-up

you always sustainable Elon, you So mention per this have. XX% that growth annum guys target

at when prices, see question you materials, my you to next per I’m secured the over you that? regarding so things how like today work you’ve into commodities, years, difficulty that And feel were we of growth, business. And raw XX the XX% as we go swinging here your calling entering for to much planning if for kind are entrepreneurs X through annum of into like lithium wondering, is do contracts stand this and the the long-term

that mean enough what’s basically? you And is much that secured years? don’t lithium over multiple does XX% And per how – that secured fast today? of improve how you can grow So have annum to

count think from years Well, I hope civilization frankly. it’s difficult now. a anything XX very is to as don’t that I still I predict around, win.

fun. that Not

Yes, World Hopefully, exactly. by we then. haven’t Yes. War X had

In on elements lithium But requires into purity thing a common of to most as the ion of quite it’s is the we necessary the scale. for and case in of amount battery-grade of lithium So a hydroxide, refining is machinery I pretty it lithium lithium materials the everywhere. raw not do to do want material. the and much to ultra-high the – batteries. hard earth. lithium, this constraints lithium scarcity of massive a one is see – It’s refining of emphasize carbonate due difficult

of manganese. with of my also cathode, create it. will phosphate – of think the or iron anode and – plenty I guess to there is be amount a ridiculous is As difficult phosphate two-thirds And maybe iron maybe iron there some is with batteries it was

In iron. Iron more earth is by mass, little says, are else, of is we Basically trivia ingredient made the two a of fact oxygen, one Yes. rust. than earth better what – Actually, stuck wild. anything is of is is together. number number which earth

That’s – almost think We rust. are of earth, is roughly a I that’s ball. two-thirds rust

a stuff, bit like rusty ball – of plenty lithium. are other little but We a of bearing with so

shortage materials. like anyway, there not a is So of

to access there make cathode. isn’t it that The process material intensive on mean I LFP more capital good other Yes. actual less the way. LFP but a that refining is is thing to thing the just that is

just so scalable on resource refining – is it’s on the side. And not side, there it’s the scalable

we to and Absolutely, can very scale It’s production, rate a at in whole I question. think rate is barrier supply no here. and seeing clear, are increase fundamental there you chain. rapid battery simply the production a what Okay. Like in

down you road, of If of appears critical is I refine to the the cells. say machinery the say one ingredients lithium what concerns the concerns were are today, ion to would

be mostly actually phosphate, lithium itself the cathode, I like manganese. will and said then some the iron said, I which So,

really think stationary will nickel iron and just all aircraft vehicles of kind then that like long-range I be almost need and phosphate thing. for you storage chemistry and

Yes.

is growth. I are going as can would in as we see it’s the accelerate And it quickly do making to need own to thing the up, we XX years say we their with is problem our we possible. working suppliers when investments, – to the are out, not capability or years X like are more specifically ramp is facility – we we other look question. a flyovers. The in you why in our building This already Texas. that But to to a next have here like And your year yes,

the how do a to ourselves to it activity way are something is We yourself. on accelerate lithium as refining to working well because best learn

we the to are move these doing So, all it things forward. are

solve Yes. don’t If our problems, suppliers then these will. we

yourself. question Emmanuel un-mute next comes Rosner from and go Bank. The you. Thank Emmanuel, Deutsche from ahead

on have so follow-up question quick then much. vehicle on and a you Thank supply. your Yes. a I demand

seeing worried order pace book of slowdown as like of the that view a pressures the is demand in experiencing? you the the of I new of risks any expressed, consumer Elon? Are or to that side. Are light the pressure or think the order you your on result about sort any of the you in economy sort First, of it

production. Well, right very our firm now, is much

will So, our we anyone car, have arrive long as leads Y, order sometime it if tell, next on year. Model can – they if you order

is this not clearly months us. So, many for issue for an

is production. problem overwhelmingly Our that of

So, yes.

things Okay. two just add. Maybe to

we I not our can are seeing impact question, little. on your a demand, macroeconomic on tell. Specifically a that Maybe

Some maybe.

material. But it’s not

times some runway go uncertain the certainly, things The second a I lead see about to we mean will backlogs, with where about. are looks state year. talking at next really point world prices, and But have we very production, very is any point the the here. ramping spend we road commodity how of quickly like what time with thing long Elon’s not we demand is the to have long something

Yes.

by if and I people the to affordability sometimes this or enough say, rail usually it. – expressed to buy does there mentioning product because somebody worth surface raise “Well, don’t little price do somebody rich. you cannot is some – for got infinity, something?” money is not for they demand, you if buy rail this just it, fundamental think basically double where it’s the have that a to – is all – one if thing bit, to a the between is why price And maybe just you there But even is money the value value who even concerns desirability infinity, money

to just is because kind the a high So, then off you and falls you affordability arbitrarily pass demand level this cliff. prices boundary some of why the raise

a I we are embarrassing lot have like we few as we crazy They have got also feel times. and raise had have our trucks do or chain raised levels. quite price and the of But at prices a inflation. So, supply production frankly we

bit. a am a some I little So, can is prices promise reduce at hopeful, this we am anything, the that but hopeful not or point, I

a Thank you. Emmanuel, do you have follow-up?

follow-up the My supply was side. actually on Yes.

quickly installed that your very do can current fill quantifying was that encouraging excess So, you X.X capacity to installed currently. at see How million capacity? basically it you that think already are you of units in

this of Well, we vehicles got I think – mean exiting we good a have year a week. XX,XXX at chance I

internal utilized get the to year. a I working we It a of but to mean the Yes. needs our the there, end are there. are There by time that lot happen challenge. have what capacity plans ramp on. to to that’s is will be takes It

Yes.

I already, many of is a week this XX,XXX-car weeks think had so XX,XXX-car have We within end reach year. the by

Theoretically, as to if end quarters and record them to will said doing are month the for ramp they And But really we also Shanghai be they capacity that record really also rate. and strong. had shown year, we then Fremont, in we the quarter. last this the on better production are at of well. coming deck Berlin fire by last

is you lot very you say, a of There certainty. certainty. intermediate have that I of can But [ph], like the it’s bridge with part the and of ESCO, lot more part difficult always uncertainty a to like looks the can think production high end that ESCO, ESCO

year next that’s confident so – X,XXX both end year. And will at XX,XXX this next the probably and of end we why certainly, not I Berlin locations year get at cars am week in cars to the but of and or early a Austin week a by by

question Oppenheimer. The go ahead you. Thank Colin, next please. Colin comes from from Rusch

this guys. and much, to you bit you through out a about into this rolling that you XXXX? pricing the get year of closer the the how so times, Thanks Could as functionality evolving see talk around FSD, increased strategy balance and full little and cycle

Yes.

of price increase this sometime We the FSD year. will later

value I is well. increase understood the well can with before materializes, the currently wants Then cheap, we by The associated to with FSD anyone is is, software would go to make of of sense not use to ridiculously FSD. extremely use the basically I and all or think is caveats it. It probably FSD which price people. it Beta high quiet Beta that just who Beta most think assuming

lithium on Great. sorry suppliers the bit And to in either up see you guys contaminants, of yields with and the into as belabor But guys side. carbonates you around that can the some specific that supply the bit you particularly end terms that seeing chain you elements move of little the some in more of issues be can materials of a and battery hydroxide, your in real troublesome little production? then some XXXXs, around prove a for potential contaminants

Yes. anything on, comment lithium specs right we on have call to yes. I this don’t really of yes, think now, purity the

are an The Yes. XXXX factor, which not a is contaminants issue. from the not

ahead very you comes question Toni The please. Thank go much. Sacconaghi Tony, from from next Okay. Bernstein.

wondering or And or make lead empirical Zach, some month, is is you two am indication times the I it that there would you In for demand. comment. order I taking maybe think a cancellations you really my Thank question. might Elon, saw and in whether pressure any on whether last speculation that data you that just if led some maybe to be that as around have demand, said response Yes. said I question the see that you to little, well. you

last U.S. only anecdotally, lower the in That’s if four have you I lead China the think the visibility the a gotten have. and over both squint, really months times little investors

prices quantitatively point elaborate really sort am you just maybe on are are anticipating could could to, if or anecdotally something So, wondering whether there they please? I of some of be could impact or you that’s that whether you because high

it’s No. proven a Tesla a And we almost I have always a a now mean this had been I problem. always production demand it’s production know for I think problem, have does has true. said not many we we have have very years, problem. exception rare

will that the think remain I case.

a numerator production? you a and So, like, and increase is denominator there

Yes, absolutely.

As is obviously. needed we increase demand production, more

change much to a like at just because side the look the more we it’s the lot on are you demand state No, can’t about doing backlog other and production.

make We not backlog are longer. trying to lower, the

building factories Building more… and

We don’t and and annoying. backlog. restaurant annoying. It That’s want burger a order hours and would have that’s you go three to a be long like, like you to a wait

your Same You burger get car. the want to away. right with

lead that want we reduce. times So, to

Okay. Thank you.

was spirit that the the both was and impacted are that bit, question, seeing of maybe... I Now follow-up trying the to a on fact said maybe little just that we demand be you

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is So, but us. it’s we so not really for – for frankly. issue issue demand. an much some an is price, excess us. manage might for That just But be other It it not issue companies have an

flow in Tesla has X your you. question can with for that consistent or whether life changed the am and am you dramatically company role next comment I role, see from in obviously to the wondering, near years a years Elon, X margins. a terms I in company industry-leading at your death and you. on cash Thank X commitment or if Okay. last of company your wondering changing spent the over the time years. personal you and just

calls then. you there a have been something said unless call and am on few I since is think every I ago, wondering unusual you wouldn’t on be calls you how...

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ahead question you comes and William next very much. un-mute go from yourself. Stein. The Thank Fantastic. Please

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others about a particular. heard degree to in some semiconductors, the shortages certainly you all lot and in from have We from

some Is the certainly of like the inference big, that. there side, some mundane but the like? am what their about performance those you areas to of microcontrollers in own of maybe categories. any guess other sort in in the seen that product have supply car, improve decide that important and I doing of make I to of type internal you outside terms aspects? wondering the customers are and chain the leverage on ecosystems improve exist more – of that doing That’s what effort degree to Dojo are We to of sort

we We and above beyond had a this moment what currently to there a great meeting. of and chips side. They to investments of support us. ourselves. for a to in working the components critical in before we need went really take CEOs actually again Well, We once supplier difficult chips supporting to don’t suppliers. been Actually but intend would need make have right are we have that with closely key like of call. make suppliers the done, thank working our us be we a they there going number with one major We suppliers make our to car. our think don’t is met some chips, will key been to have times. And just through I with And

there, So, out to our very all much. thanks suppliers

Microcontrollers, guess do maybe we have power talk some, already. very vehicle we I in And the some. just lot battery Yes. of a electronics, management, it yes, often, yes, some, about custom don’t yes, but silicon

there we is a after going go where actually future, where technical a And in try think at So, advantage. I is supplier… there to the we are look to

that side engineering solutions, have our issues with there when are cannot. other an supply changing this simply just chain it many it’s entire pack advantage I and Tier of with And us to find the Even work. it Xs OEs Tier structure we the alternative think into that’s now make where Xs, get or chips whether on we

is as is much company. as a a Tesla company hardware software think it I

chip even cases, that as address chain the on And chips, And has ways new the issues frankly, chip, Yes, – reduce better. of or single different out of be a use achieve that chip But to for had rewriting have testament by a needed. a to in use able chips able a the more chip us supply we new forcing so quite to chip whole roll shortage we that’s we software front into served one interrupting software write the car. chips of turns software actually, able in to production. without a number we for patch of and which some than car, team to function is been is dual are the to the that our

we mature to going in are our do functionality it goal that And laptops makes that cars. as wherever into to gone as it that It’s and And phones. do Yes. the way trying scale to the with sense quickly is can. more integrate that we and way like as is platforms we chips, fewer it’s

chain whatnot? a you what about do From – think the and standpoint, do supply we chips

Yes.

take own and I level, high mean for understand are requirements we partners from something with a microcontrollers, and that will think I specs design partnering instead the – key our of architectural and they us. designing the building

We point, that, done space. to Drew, your on sensing have battery the

We makes application-specific But ICs. end product it integrating, have some got makes supply better easier, failure reliability reducing of but yes, is less there because components, the chain the number it points. also the of

that’s So, always the been mantra.

got have the functionality. try wafer we consume times, level same at and less the achieve to And also to

we have the have months. some six that that also constrained we last something that’s modules faced at the been of in in So, looking

Thank you.

you and is speak again months’ Unfortunately, time. much, this Fantastic. your you I Thank you we questions. all very all much. Well, in thank appreciate the have time of to and will quarter, this three goodbye. very we

Bye.