Tesla (TSLA) 19 Jul 232023 Q2 Earnings call transcript

Good afternoon, everyone, and welcome to Tesla’s Second Quarter 2023 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 Q2 results were announced at about 3:00 pm 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

has please But During one yourself into before use raise we question today’s join to Elon Please to hand follow-up. jump limit button the some one the of Elon? question-and-answer the portion opening call, remarks. and question Q&A, queue.

Martin. you, Thank

achieved a record globally $XX bestselling production in Model QX and recap. of revenue just a any And in we record QX So, the likes deliveries, vehicle Corolla In quarter. kind vehicle surpassing of the and Golf. of and billion QX, Y about became single

including price. sold a you for the huge So, it was to is, the This Tesla a customers number incredible kind, that far team, at vehicles one achievement lower thank think, our any vehicle an I just by support. and are their of

came high this operating spite of nonetheless, XX%. of managed to and uncertainty. macro interest And about in a margin achieve of we And lot rates

to target this year. million We continue vehicle X.X deliveries

to Although, factory for we QX be shutdowns will little a down expect because summer got lot production bit of upgrades. we’ve a that --

in So, factory upgrades. for production just slight probably sort a decrease QX in of global

we our is, the autonomy of is products robotaxi like sort have a And the future revolution. is robotaxi robotaxi we next going think ceiling to -- quasi-infinite In going also level. long-term, way to think we’re through just drive demand. volume products manufacture The itself dedicated

highest units It’ll way. a vehicle the design per production far revolutionary any it’s So, in by revolutionary made hour of ever. be

that. about excited very So,

I X train slightly in becomes also then net And, this million, X The like a has it’s better it order and data we autonomy, at it it more again. our million, millions -- sort results. The it’s have, training you are data training been more -- basically respect in incredible. from see we mean, Dojo, need at Autopilot but to over mean, the proven over neural million I there vehicles. wow, of seeing of With and you like neural basically -- build with to XX the like get at X examples, works; something, training works; million where times examples, we’re net, okay, it’s barely to

massive the there’s combined a of amount obviously, of order data by, an of this on even magnitude. And all has road So, more Tesla no substitute that companies are I maybe just data. the vehicles collecting for than think,

we big -- XX% think have a all might of or very I So, number.

So, the have success in outstanding we is and a resources. computing sort function AI unique data all three talent, arenas. in And endeavors capabilities of of

don’t software our how if if have anyone did And had I training not the know really they could and had what doing, we’re just they our even do data. computer,

So, is the need, training significantly net to speaking it’s neural somewhat -- for of which, of our video training. which reduce designed training. that is a cost Dojo to It training kind is we optimized designed the computer of

just neural things, for talking -- need net quasi-infinite So, -- the just we training speaking enormous. that of is see again,

resources. So, expect for I to Dojo, we -- just NVIDIA really we think clear. But be see having to use vast -- both, there’s and demand training

[ph] think in-house the by XXX capability we training And a net of exoblocks we may reach year. of end neural next

XX than to so. a self-driving human as go That of of million going human. soon full will miles, using billions from FSD And the be being a safer times as driver, a better is mile FSD miles beta. million to XXX quickly. see been tens clear to over human good XXX date, then have then being billions miles. than seem It’ll very vastly small being path number to We of So, driven average

inference the our car, dedicated. and inference sort computer, which that’s It’s Dojo AI high development. Hardware our the we in really X, hardware efficiency Autopilot, of computer but car a clearly between call in of edge it’s Optimus X, the And Tesla’s cutting at robot,

With four is line our candidates we on here will Cybertruck of build fit regard that the XX-foot that of bed will a to first Gigafactory. Austin a I’m our over six release Austin. our final in garage. into and continue the at in Cybertruck, to aware truck actually foot production the This we’re have doors

bigger the the outside, on inside. So, it’s sort but even on of biggest it’s

-- one the looks on elements inside it’s it bigger that’s it on of feel than the design I outside. So of -- the should think good a is

exterior is really but this down the millimeter. Cybertruck car, the no dimensions we And the small cared to of last about

in -- start we And big, right maximize not get year. the to try too just utility really of it this zone, Goldilocks of and delivering to not then volume. middle we wait too the the small can’t later the So

highlights. other Some

XX,XXX Our connectors and over locations. global Supercharging roughly network X,XXX -- over at stands now XX,XXX

are of we and I called Standard, the people Tesla source aware, lot Standard. which As Charging now open American a Charging made North it’s the think

and have do right Ford, thing to and in and that signed charging the EV just We network. helping our GM, to general. other the use OEMs access honored Mercedes many trying gain believe strongly car deeply accelerate revolution other to connector up companies to We’re in our

goal the there. So, that’s

this -- in but OEM major are we full licensing discussions just And Tesla very Tesla is I self-driving our that with very license to available, -- software is strongly, open not using emphasize, as FSD. important other just a North with licensing, something case -- point to about making in very and discussions hardware that not we it think, Standard, Then companies. early Charging are American like we’re we’re already although with I want the car

keep trying not to we’re So, to ourselves. this

our facility lithium are We’re others. more to progressing than cathode it happy to license And lastly, well. and refinery new

focus In conclusion, maintaining as on as to can, calls while healthy many making we we continue financials.

to come. excited what’s intelligence obviously and about Our development we’re is artificial a era new entering incredibly

started And times. then like service work quarter. extra this during just overall such I’d of much effort our you profusely businesses contributor and for hard the all very are making you’re Thank thank making. Megapack, of a lastly, as who to all lot uncertain to other a to Our your profitability and impact employees meaningful whatnot, Supercharging become

Thank much, Elon. think has And you as Zach I remarks opening some well. very

Martin. Thanks Yes.

quarter continued again QX Elon of and as deliveries, services another was mentioned, and on team records the the progress. our As and record production energy Congratulations Tesla for well profit other as businesses. in to

interest As rates, economic and in comment regulatory we I consumer navigate our uncertainty, a on want period rising through change, volatility financial approach. confidence to of

platform includes This but Semi, evidenced foundation vehicle continuing new the the and future. increasing only business. that not is the continuing growth service, continue and such as capital as the self-driving, also generation spending investments full AI are to Cybertruck, as related Supercharging factories, First, as we This applications, value also expenditures in we expansion, products the technologies invest the capacity in Optimus with our will meaningful R&D heavily long-term on priority of the our includes our for by battery well drive as most to continued in processes, ensure single Dojo, our core spend. important next such and in our this as to technologies internal network, lay

capital requires to towards reductions and as QX. each businesses, materials, on in R&D process as our progressed strong all working on appropriately customer AR, improvements inventory unit This in work COGS capital per of raw a in key so focus business, both, work way to investments. which our our goals and importantly, well and doing most energy volumes but continue the our vehicle a pace continue that we of of in capital Second, maximizing on generates of

reduction modest improve If We showed we look action remained vehicle specifically to despite in automotive cost commodities, business, also our at cost a manufacturing taken and continuing early the the gross costs quarter. our category, including nearly our rapidly healthy, affordability -- Austin we build material and margin unit recognized rate per to and while and in factories. realized Berlin in increase every improvements logistics, further

energy business, our reductions we margins by cost and For and particularly Megapack. gross profit economics, driven with deal improved

are of revenue their As based types projects the milestones. sequentially typically on storage volumes a and volatile specific recognition reminder,

to carry idle Elon’s to the on for upgrades. amount As we volumes will factory of I some downtimes by comments QX cost. driven want factory reiterate upgrades These rest forward also planned of look year, the

working keep long-term continue to we the macro in or which as our in the with can execution and are term. great impact much again dynamic on minimize we uncertainty as a quarter. environment, positively to on important focus Regardless, mind However, near efficiency to remain also possible. It’s negatively the a everybody a outlook. to in fundamental Congratulations

let’s And to go questions. investor Thank much, you Zach. very

on licensing FSD answered. first question we’ve The already

So, one. second let’s to go the

achieve status out what Day? The you out on How you do the you Battery on question XXXX you the expect Day? When Battery is, laid of is far to laid specs are second from cells? what

Yes.

little a a with bit start I’ll First, update. just production of

and XX XXXX produced in XX% So, QX production million increased in over surpassed Texas, cell QX, team cells production here the Texas.

that. our cell on by XX% a reduction focus congrats XX% quarter-over-quarter, resulted in So, in that yield team for to Their COGS. reduced scrap the and bill

we’re current design was mechanical than XX% process optimization. production. Texas, That through in our density launch preparing cell, Here energy Cybertruck which higher to and is accomplished

As the place in per next, a we be of on through we year comfortable cost should scale end Cyber cell. cell production the early and

energy battery like-for-like a targets, cell on density basis. our expectations our electrochemistry Cyber Against the at is

topic cost or We’re is which reviewed improvements, significant for further yet Day, production, in-house silicon do bring integrate day. on that and Battery density another cathode a both to energy but

of in of most we focused scale reduction, equipment, and Tesla-engineered all Lastly, a to and it we are XXXX on remember our utility up date. achieve important Texas density, that to Day strove on the what realizing system was improvements the capital is cost to we Battery cost which production factory

very Autobidder Energy between how Given the this see next evolved to can Tesla do the you products AI you is, hardware as how capabilities, segment Thank margin model? accelerates? long-term on much. has revenue more your you and The and software the from margin Tesla’s mix recurring thinking talk question upcoming

to contracted meet provide quick can’t map, update. to Lathrop road but continues ramping projects show XXXX. demand QX strong energy in We product future and on successfully Megapack I with our can a globally comment

-- quarter, a our place, are Megapack margins last in target stated margins. line reasonable with As in target vehicle

eventually assembly ramp is full line XXXX. progressing on in schedule, final of Lathrop doubling capacity second factory our at The ahead Lathrop

today, We in California tour our project in to us actually. have several Australia, Riverina that construction project Hawaii, with the customers, we’ll trusting exciting Gigafactory, completion, We at thank in products for grid or the utilities projects Texas these want here operators KES including nearing and one several large projects. and in

Texas, is we small. In Autobidder an occurring. Australia, wholesale enabler in a that best over question, much hours under for continue sales, Tesla’s important deployment year. the annualized is industry of with the Autobidder lifetimes relatively markets relative but large QX. on does UK, have next it’s performed to software projects the hardware grow these contracts to recurring Megapack our projects revenues like UK in and revenues, side remember It’s in -- Autobidder to dispatch upfront California and On how gigawatt margins projects on capital CapEx given years small are hardware large to an growth XX the these have basis of contributor X

have Powerwalls We fun side, some things residential we the happening. X.X installed. surpassed On million recently

we virtual solar the and drive on charge power vehicle which this participating customers Charge their to for we began to Just Powerwall hits using Texas grid are provide in Solar, their only in to Tesla on our and that customers excess week, vehicles sunshine ERCOT. roof. launching plant Yesterday, paying allows support their

time access. of third credits bill electric Model by X in to market as over rest by We today, annual new customers customer’s a all these lower expect over expanding to our credits expands ERCOT and Texas we quarter. median owners the vehicle are the followed Texas, Tesla enrollment And to increase these

to basis. bringing regulatory hardware capabilities regulators operators be Unfortunately of driven of residential requires BPP and Tesla by level a and somewhat electric In Tesla software Insurance, the run, working the on the and a that similar energy our jurisdiction-by-jurisdiction through permit. market access long to and market fractured customers utilities, value will environment

relative to Powerwall eligible in than capacity can value to Australia, For today. the as energy system more provide that’s and a peaker we of typical buffering, of system such services, double like the stack ownership full

quantify COGS to unit benefits and incentives; Thank is, secondly, you the from next very manufacturing could The year-to-date? the you raw much. battery question material IRA per battery declines

that. take can I right. All

On $XXX course of this for to for question manufacturing the range we first the the per these in provided of that $XXX million guidance quarter. to expect IRA incentives, part we of million be the year previous

partner, so Panasonic. this cells previously, for well. We that QX case battery of qualified long-term we are note, the I within staying boundary credits in will guided includes from our as and before, think this a I that we’ve was that sharing XX-XX as mentioned

On notable side, are so improvements far. discussed commodity most the previously. we is improvement continuing as there, we’ve Lithium see to the

coming because reminder, we lithium. And is on commented price as see quarter also not the in I fully about we’re realized on think the just to I exposed typically, before financials. this actually a last it this our call, a of

another team some to supply Our has down. with we chain bunch agreements some and -- in have do exposure here, put a that done place companies partnership a job of but up in other moves long-term terrific

seeing We’re is great. in nonetheless. large and which impacts, as aluminum benefits steel, the but I think contribute Not lithium also as they

relative also total we IRA that benefits and the if to the impact QX So, prior quarter, about add the same this it’s up size we magnitude of in as received.

things to COGS from this per in put unit to sequentially I there. two think QX, mind look to you as there’s keep QX Just in at context,

mix to quite for increased our The deliveries from first SX QX. bit that QX a is

a from think And then which these that Austin for Austin related bit still and and to increased. above as continue slightly in quite mix QX we production fundamental of reducing costs as And did our work you it’s Model reductions, that. we on Berlin So, elsewhere. to adjust quarter, Berlin cost of factories the secondly, Y to about important our are builds QX, cost,

that’s COGS impact -- so, per consider And you the QX of from something terms model QX to to unit. in out as on

Karn I here? commodity just ask do generally, add there’s side want to else to want on you the more or if anything

Yes.

when we of place. from commodities all translate As we have But long-term board a little in it pricing that we’ve hedged seen and look pricing cobalt because specifically have you position batteries you mentioned, as reduction from in a lithium go nickel, contracts naturally across the for into dollars the Zach, at been bit reductions impact. per-vehicle the the thousands And such in graphite. of into

commodity of to We’re end the of pricing extend of of the price low historically kind ask and taking fixed I decade. advantage the certainly those some through contracts

continue we’ll of go that to back playbook a future. as to it’s So look we to kind the

FSD into lever FSD. you. the price new to The to transferability car as Tesla considered being instead to FSD? to on of an question next allowing due customers existing upgrade Thank Have you allow existing a of a locked

we get Yes. This is question asked lot. a a

excited FSD. we’re that amnesty. So, announce of we is QX, will be allowing onetime to This for transfer a

in of reasonable place least be to but it need QX, you or QX take -- -- within So, frames. delivery to it in advantage at needs the time order

hope this makes happy. I yes, thing. is This onetime a people So

orders, Right. more we The next schedules, estimated question, specifications? when will delivery give and information about the Cybertruck pricing

off far see so is Demand hook. you hook, can’t the even the

So, it that’s not doesn’t the a lot. look it like in Cybertruck to vehicle. I it, like that doesn’t new issue. like lot look of not other It a technology any -- really has an because is want emphasize vehicle any do other like

elements as So -- of ramp least internal likely fast production. and and the the move production the will supply as chain and entire slowest

it’s wouldn’t smooth. expect hope I So, I --

that like ramps any with unique of But it in fast -- go ramps. experience the XX,XXX And element first one the well-executed there’s the production as and we’ve order production Cybertruck. got at better the least processes certainly approximation, of -- as of least XX,XXX. if lot parts lucky, We’re a will

it’s always predict ramp be delivering So, car and high year, I this volume we year. to be but making the difficult them we’ll think next will in initially, the

critics vehicles? costly makes that share of the with costs to is experience details question process next The to you you. pushing harder repair customer. about on and vehicles Can initial more Thank the Gigacasting essentially Gigacast some contended repair,

us. That copying why must be everyone’s

Dried up multiple traditional simply have out. and to misconception Elon. to joining be I There’s methods. but stains, blah, cut, is that like and be repair, have are Lars. has blah, and easy This of adhesives they to bodies are multiple out. materials removed, rivets welds be Thanks, Spot to made a true. that’s not structural blah. drilled Panels mean, adhesive chiseled

crazy patch a It’s a quilt. of

Yes.

an it rear and to X cheaper times example time a means XX replaced like the money. Y, it’s X, do the back Model cast and with versus cast replacing Model from what do it rail that our faster And rail. do times that we to so with since together Using and and incentive a own have in we easier works putting of to with closed shops. And team make faster and repair own body this that with because design it collision to our team we insurance, we’re specific parts Design on an repair. that we our have loop insurance

collision make repair continue to cheaper body all to training. our Tesla-approved we We do to And body become continue and this, and expect available shop already over shops we’ll faster this will time. or that

into loop deal. closing that on collision big Yes, factoring a is repair and design

don’t ecosystem else can I that we anyone that think with do so. Crucial. it have,

to wear we to and do the the be that the And anyway. need details the inserts, time, replaced so out all actually are Yes. -- change actually with of because we casting able actually and inserts

make changes is the cast and better much or So we harshness, every inserts us. that’s can to It’s to way. so cheaper, other tweak castings. the And front in car copying are manufacture. body companies --basically body lighter, actually cast the why rear better easier noise vibration, design many But

Probably.

about lot certainly press a Well, they put releases out of it.

be to think future. made cars basically the all it’s I how going in are

Thank you.

be been start Optimus bots And many performing they will have made? when how tasks? able question, Next to useful

XX million. Yes.

around X or X bots. we’re I think

any at can humanoid actually things suppliers are actuators that how guess. yes, for There’s and I of month. about think price. are working that off-the-shelf no -- more that -- were what look, work are the Depends every sort There the there’s on phase. found we lot -- of no -- XX, -- it’s a actuators. interesting what We many I But well robot there Optimus produce there’s bot.

Certainly compelling. not

things a could -- that human do. not can do the humanoid robot There’s something that Yes.

designed. actuators production. of or then, actuators, design own actually had designing hardware the them So, be we’ll every designing the volume the using are, really, them controller, of But electronics, our as these integrate the we course, to that the we’ve for car. custom one sensors. power the in motor is And inference same And

just not the other it’s they’re manufacturable. in capable lighter, tighter So, that also and any exists more world, but actually than wherever actuators

them able in So, be make we to should volume.

start that. that actuators, November-ish. will Tesla of ramping The integrated actuators -- the and up that be Optimus then, after designed is candidate should around have walking sort production we’ll of all first And

In terms to out own in like just think pretty some utility, to be something useful we’ll out that. of trying our first factories when and have things, confident be sometime we’ll this be do of yes, I’m -- would next year. be it in our able factories I do able but its I proving we’ll useful

So yes, it’s going well.

world than to a potentially term really $X million -- real better think, cool a arm Optimus and for arm but and them in there’s that body team. people arms actually would U.S. And a around sounds say should we or about man give or that incredible is is I or in like leg biological can it amputated, that actually by that impressive, and just one. cost maybe there amputees. or I is another incredibly basically This just their implant $XX,XXX could robot capable, thing be a give want was has $X long so be cyber good, as a -- life, to help arm I Neuralink man. leg X that before robotic million. are a legs alone, someone don’t the the talking believe had the to we million Neuralink combining will And --

period? other Tesla is to reduce trended next order levels And the it has you. increase Conceptually, incentives how intake demand? does it has during prices how when question at in trended decide to or to the Thank sales is, appropriate QX? The quarter-to-date how relatively production

Yes. I demand has guess, roughly tracked production.

e-mail, we orders has what we demand order -- seven is is chose we really an so all no is I aim from that generated globally. -- output which at days -- -- look real-time other like get we have that it’s week. real-time and a e-mail production, -- something that I for and So carmaker think -- factories have

on earth adjust mood course So is. it’s pulse of to real-time the And like the we what the according a finger basically. of public

of for new a is big decision car a majority vast people. Buying

environment. there’s car challenge what So, uncertainty, interest economic least pause time any see on happens. another buying at generally And to is new obviously, then people the rate

so the decreases, anything rates interest As debt increasing the price the affordability car. of with bought of rise, effectively

interest rates payments rise dramatically, -- of reduce So price actually when the sharpest interest was, this the increase is And at until the interest in recently, I price believe, car up the history. least of the it car. to we rise the rate have because

if So, global ball. that. If we had ball economy, to a borrow crystal that do the really appreciate something it, for got crystal about I could somebody’s I

DM us.

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and is buy old the right. adage so, hold And of

Buy it. and to if or hold That’s I’d it. For like they they’ll continue say advice, See as that like company a good you love. an make products products? stock -- does great identifying seem investment products it

win. You’ll

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makes and has So, great common that’s you sense, why a products actually. that a of buy company It’s pipeline. should stock good future

then generally, panics, market market I’m see you you recommending if to but company’s that are, Tesla, what products can if you high. buy; And your sell. when overly and not exuberant, yes, buy services when confidence or the low, provide is the -- about sell you

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So, market. this Warren to Credit is Buffett. a that stock

Thank you.

to the next Let’s question. go

drive With the margin gross emphasis price rise cuts automotive gross even when? investors margin, cuts? And if automotive stabilize into growth expect so, to due or to to the of can outpacing volume efficiencies eating see

to will I’d that Autonomy Where’s minor relative gross silly. long-term crystal in looking may, all Invest. margin the really look, look ball, profitability I are these picture. and short-term make recommend variances again? numbers ARK If the of at

the accounts. Twitter, their Smart people think good. great. or very analysis finance, It’s Fintwit Finance I best. generally, And on the They’re follow is their

So info. you’ll that’s opinion best the my get where in

long-term believe up strongly is when a don’t investment. and I And down. sweat Tesla things big So, go

term, sell market term. at control little short feel over fact, I but we’ll confident panics, In buy; time. if too a long just -- generally, market can’t the deliver is like exuberant, the -- But if the I’m

I So it’s -- Zachary? is really where at. and mean, autonomy the

the are that I think only the investment; it’s I continue with matters intense thing of this the that mean, of you. intense. I money in potential. is my said It’s intense I now, fully short is in investing teams technologies to we right in terms which invest. agree generating and products portfolio And are the of opening remarks, what technical enough in in terms to term is

massive have it’s technology. cash is business, money investing capital-intensive free of super ridiculous new in flow a in Frankly, amounts That that think I we hard. while positive

just also... vertical new not It’s products, And integration. but like even

share... our make actually We Yes.

near-term a matters what we’ve management, Is to we’ve a on perspective, on capital continuing we’re -- my and do is to focused quite working reinvest? so, which ensure to invest. is And capital focused that the been to on. least made reinvest we on can everything receivables of what That generate at very provides progress cost focused near-term to reduction. we raw be that on means to from in reduction hyper the cash set the Hyper-focused continuing bit with cash. continue accounts as of well materials This cost there

there’s so, that control. And of set we a this

We reductions. have cost of a pipeline

We as space are getting tailwinds in right the helpful. mentioned, that’s now, Karn commodity

average things selling consumer control matching rates. interest ensure to Elon’s back be control and keeping We point. to don’t prices But to around don’t that demand Variability goes macro and we’re We to have balanced. sentiment. responsive we supply an obligation that

And so, quarters. is the this managing how we’re next of handful

value Soon flows of cash business. enough, these quarters present of will the be behind us. They the of won’t be future part

the that keep it want we to sure term we the sure view make and to is that that want long make exactly business we so, way And be.

you right. much. very All Thank

let’s analyst go to questions. Now

The from Barclays. Levy first Dan question comes from

AI sense more the Is a product? machines? a you And result is first we should maybe payout us when it pretty you focus. what expect question see a start to I sense as front us of start the -- wanted maybe could what give the of the a in with your is, to when the Can resource like on outlay you a this? with starts of OpEx and to payout refining process what clear sounds it and efforts about accelerating Dojo. It’s you’re provide of your

are or…? spend how you going much Are Sorry. we to on Dojo saying

Yes.

R&D Dojo? on

Yes.

Well, be we’re going to open not loop expenditures. on Dojo our

computer. well do the to is will north of another through us, staggering generalized $X of and this spending the billion like also on the the -- And -- for mean, you one we’ve be to mean highest next training scale you a think So -- -- It’s in on. something hard like things and training I I Dojo. I dollars thing next need to And autonomy, training -- in to over to year billions also at mean, order think, ever. toward billion so on needed of you data this achieve data -- it’s solution need actually $X well, but over -- truly yes, is compute. problems we of got I year, video it’s the spend copy it’s need amount it’s this

can’t lot harder. if companies of say why. Because car? they’re AI LLMs why a That’s see and You make so would it’s self-driving doing I whatnot. a great, they

just process, but So companies some got data best think we’ve But AI do And way do the think great to it’s I is to I somehow. there. got fundamentally, processed -- that. to be -- out the silicon there’s amount of custom staggering

Dojo is training. you optimized a optimized of With to It’s memory LLMs. compute-to-memory much designed tends so training. It’s is do not have what whereas that’s bandwidth, training, optimize -- video for video higher to ratio LLMs for bandwidth So video be for choked.

that’s So said, it. NVIDIA NVIDIA I to to done -- have hardware. some -- job. of as it They’ve for we take -- lot fast we’re and we’re Tremendous we’ll deliver respect hardware will NVIDIA. like but us. actually incredible I NVIDIA also continue a using as mean Jensen We’ll -- an

can’t. GPUs, Dojo, know could might we don’t And need not frankly, but if enough us I they deliver they

the XX to enough times got We they’ve to sheer kind as human. than because we’re good some been -- better to video to so as trying said, want human, So like get better prioritize our not than They’ve yes, many human. of maybe times But XXX GPU get of orders. nonetheless, just I magnitude customers. training

probably like year. per there’s million serious on order times twice permanent better And of XX per believe would million now, injuries, mean closer automotive as still deaths the then good if Right X say I and And if think XXX,XXX it injuries. year. you I it’s something permanent to times deaths XX human, X XX than severe -- human matters as -- so you’re million

like, be it’s So, XXX we would okay, times better. rather

then, needed So computer of as but march other Xs, to there’s really and truly that’s Dojo, do safety there’s And think we that. and perfect applications mind-boggling desperately achieve -- video for video for it’s of possible. it need amounts for And we training. just I a want as

Elon what to add to Just mentioned.

capital and spend mentioned are he that quickly. spend. R&D is And numbers the moving this So, between

And provide expense. so, our we on three-year a outlook capital

up these that the outlook. to moves considering as our guidance Q. we’ll are continue in And in down, update that expenses and We

training the would full Yes. done is training. say, it if That’s to of fundamental more compute, limiter I on had we get progress rate the faster. self-driving want we --

that’s So it.

difficult it’s quickly can predict And it. to how on execute we just

Thank Great. you.

I follow-up, macro target uncertainty a as with Just right recognize your but there’s volume CAGR. near your of incredible term, XX% you’re now, sticking

to willing what the more on contribution. your margins thinking to are keep to As be think from going we sacrifice you about going is CAGR get ahead, penetration to to help sort growth. differently some or in some volume extent commentary share? Cybertruck that to you intact, XX% be EV about willing sacrifice on to pricing further of But There’s are of year prior just margins versus

hours much may as XX vehicle getting X times maybe It’s share. every be worth X.X has more produce is on autonomy of week. not is about or what as that if day capability actually XX week-ish. that says average average, in today. you It’s -- can -- it a sort doing sell If full a that’s driving like hours of that future of this that think something a the as hours just Because we car

If and to either autonomous you Airbnb, you’ve is allow like to sometimes autonomous maybe by car like -- the able if vehicle autonomous on operate used got partially others. dedicated use your be autonomously or

Airbnb just to is want it -- just a you your room The value Sometimes use Airbnb doing tremendous. in with house. exclusively like

of, it’s they dramatic future, making increase. make -- valuation sacrifice have we of not a I more will distant too to the it vehicles margins I sense because would it -- favor think in So, sort does it in think think be

upload value in I the increase maybe in self-driving think asset we approved by full Tesla point which be can at will the fleet change step the history. single biggest is regulators and value

Thank you.

comes the go Bank. to Emmanuel from Rosner from The next analyst. Deutsche Let’s question

Two questions from well. me as

up autonomy. following the First, on

is What trigger So non-beta before vehicles, existing lowering rates? take price FSD And of FSD? to on timing vehicles, much you latest start essentially version you’re that version your Tesla eyes-off targeted launching these an the would higher robotaxi benefit or incrementally. would a dedicated release from improving

the been it make fairly about of me, have made version in past. logarithmically. I’ve achieving over sort a look is reason and quite optimistic have rapid FSD, tends of but Well, The optimistic with the it new have my me people of fun been fun self-driving obviously, perhaps as predictions full progress of then -- will to -- like we’ll is curve made

So first, diagonally just curve looks like logarithmic up. sort straight of fairly line, upward

actually been then logarithmic series then over, it if curves thing. there stacked great of have because logarithmic, have a curves. and And that, But a so, you you it’s extrapolate then

by I’m better FSD, on I end U.S. think say wrong Now, better I’ve that in regulators. the market approved because be the be be That’s cried time. we’re this past, think of in been be than year. to not I But one to human And this this boy I I’m focus the may human by but year. end by the got first. of than would we’ve the who we’ll we’ll wrong saying

so is And is go you not high. the offer car actually as very that. the will low low, if is earlier, dramatically the sort the -- I a -- price increases it know of sort back said And When we think FSD -- offer to thing is the we although do of great autonomous. price. $XX,XXX FSD monthly a people we actually of price value actually FSD price, of high what of and it’s most subscription, I don’t a not

it so $XX,XXX -- low FSD. its yes, the a for if a actually is original to trying with think out thing. price, have like But subscription maybe price as recommend I’d car several times yes $XX,XXX I you So, don’t worth go is monthly obviously, the

the next from Stein from And comes question Truist. William

this AI to the in this with on and company. like you’ve about Elon, stick -- spoken today, but topic. great FSD, about started We’ve Dojo I’d you’ve interest read ask you developments to also -- x.ai think it concerning is AI might pursuing AI a there focus. of see quite where the bit of that value you another products be in endeavor features investors might be for to the Tesla, that and And

So perhaps compete what with or perhaps can you enhances Tesla talk about how x.ai ways, Tesla in it might value might other does? of the overlap,

Yes.

think but they large just that not company AI engineers sort of scientists were a I a willing actually the to There established some world’s were join best join the like startup, Tesla. of willing Tesla. enhance of relatively and it’ll were to value

a and actually like join it So, people I to -- we was do that’s want well convince a was how got few I Tesla. that’s like, to interviewing them was couldn’t -- and it started. I startup. they’re like, no,

work That’s it’s I that than so up else. kind start okay, well, of genesis better of go run to -- the So somewhere like, xAI.

And xAI on of sort is AGI. focused Yes.

-- want on I for it’s some will they work the Tesla. of best best very So some like really xAI there that -- problem. said, world, value just in the people to to think Also be I brings interesting the

So if very is to but it was convinced he science group, material do work just was Tesla, science compensated, SpaceX. was material Apple, wasn’t group take, really and think leave both in Tesla it where say, it to at willing in where the Tesla willing if if world, he’s you he -- that to -- SpaceX. He both both Colman Apple what leave and best at a and happy and the we Charlie to is well got

thing best And talent to do. the sometimes to that get So world in actually the been beneficial if that’s of the kind Tesla. need very you you has

the unit you number squeeze pricing, continue I with do current question you could if X.X one wonder think in continued maybe seems prices stabilized to you anticipate expect Should mundane sort lower stabilization The like million we of I If in. they’ve to decreases year? for of more more because X.X needing or can the the hit it the last have months. rest stabilized. trends or

Sure.

quite referral have be I of we -- We think effective. sort will started the which program,

conditions. As Zach was saying earlier, we don’t control the macroeconomic

rates for just really really month. the they’re rise, people, of -- lot every a of that reduces interest cars. if they’re even affordability to continue So, breaking And

In even fact, card the breaking is not if card credit rise debt, at in debt they Credit in looking you month. fact, are, look every scary.

think don’t stable, we stable. If lower would market market prices. have we just prices not they’re condition stable, control be conditions. then is I If Yes. So, will the

Thank you.

to go from Oppenheimer. Let’s Rusch Colin

maturity be to you speak expecting out complex system? operating the building what use system is to Dojo and implementing a As truly set you’re that to the much of can and you’re of software, software outsourced going in how highly

a This is level, a to run run on stack, But at can we it PyTorch is you to that a custom JAX. then software it silicon. customize designed have But custom such high and actually so.

Tesla software inference the in to open case way for So, the the is software the combination bare a silicon, all is stack and the of then source car. the software which computer

impacts can business. continue That’s to going to the you’re relative as you’re to your at there’s Thanks some Okay. helpful. geopolitical rate, to some folks you be of And guys putting then this grow going so Obviously, risks be much. economy. how out managing expansion? to speak you And some super regional around of capacity

and you’re to want and those you’re of of understand different terms of plans relationships in thinking just with how managing your I CapEx some regions. So, countries about how that some

Well, this geopolitical of period risk. is a unusual

do things world. if that is the we have best keep going world, difficult rest of in So, we’re in get the I can can part things the of we -- think such factories world the many in one the parts still of

Delaney next Thank comes The Sachs. question Goldman from you. from Mark

Can reducing when vehicle $XX,XXX quarter. costs progress are per vehicle get And last and update making been per automotive you again COGS so and to has did historical be on there? an puts the think could under level? what give key takes Tesla you the

asked think that don’t of manage, I This -- this is There’s is This I to difficult series series we in the past. of we very which control. forecast. the a was costs costs

costs particularly labor on cetera, it’s go, commodity et to where so hard just side, the And say.

be certainly for pressures, deflationary like And as very what prices -- it at very to do pressures I strong a saw don’t year. mean, to And while Karn we know, now the as reduce commodity I makes a And Yes. we’re COGS. seems be inflationary obviously what -- deflationary think? deflation dropping was isn’t which seeing last inflationary seeing to we’re -- you trends mentioned, moment I difficult deflationary mean, commodity seem pressure. But mentioned the level. ago. now basically,

we’re thing the economics other the And seeing. as there’s Definitely. unit volumes improve There’s That’s that. grow. then also

comes As X part play, used lot the of years of that equipment into That’s That depreciation economies a bigger play. piece amortized. scale and There’s the be commissioned suppliers, becoming was of we’re part to a a price. come better into that to ago. of equipment X completely

So, that equipment away. because comes has piece we’ll gone contribution see situation down price where

terms then do. we And continuous to in of mentality continue of have what just continue we just to improving improvement reducing automation, at get labor, and this better labor,

seen think -- have an we quarter, So seen we every I improvement. have

down. Of course, up and spiked commodities the

being is trend efficient. the general, towards in more Just

Yes, I’m totally agreeing.

Yes, for lithium prices were absolutely a insane there while.

Yes. And now. recovering they’re

it be. used way to the -- Cobalt

Yes. the but in early still not Austin of Berlin. early ramp, and down early in well, cost the in curve we’re the -- And ramp

time work takes cost so, it the And out it. to

focus down... -- on ramp First, ramp, it’s a it cost brings

And quality costs…

once then And can cost we Yes. that bandwidth reduction. stabilizes, divert to

saw a amount to work Austin a QX decent to do and reduction quite so fundamental from of Berlin cost that continue be QX. basis And We’ll helpful. that on will

to chipping we’re And going it. just keep at so away

that. to is Packaging big a element

logistics… Yes,

which normalizing, great. is is Logistics

focused very on. something has that utilization, [Indiscernible] the team been

So, every bit of it.

it’s hard... and Yes,

Yes, saying logistics. and underappreciated. Logistics valves as like goes sold is so tactics with one with

And made fronts on cost expired in costs. improvements Yes. we’ve in all tremendous

is go down. goal pre-pandemic now, further done expired and cost to have levels We our

Yes.

from at normalized look at we higher normalized on when the for Berlin way mix to our look that QX we cost, of the progress a impacts shift internally, with So and QX Austin being while. we’ve S might percentage QX, the higher mix the had a be versus largest reduction, a our sequential it QX for mix, our in of X in cost of and percentage being

team, So, we the work to of it’s up. Tesla great keep I think just on got behalf and it

it’s of Yes, pennies. a It’s with Game pennies. game of a Thrones

question? follow-up muted. Mark, I do a have you’re think you

and quarter? comments impact downtime Maybe that for you’re about impact planning your terms factory that. Yes. on there’s the in upgrades a also point to could a that those Thank you much extent prepared spoke impact this finer production of margin you what in details you on then from very the put all

we and that. Hopefully, that exactly challenged -- aside of team know we the period of upgrades downtime possible go running quickly set don’t again windows impacted cars The so small. it’s the can and but as the way that to the we is factories reduction. number a Yes. It’s get downtime as minimize because then up for is we go kind profound not time, of into

getting we’re I too we’re the precision a is possible that asking here. think level into of for mean, weeds answer. I like to much not

let’s move on. So,

Yes.

today. unfortunately is for we the all this have time think I

So, in we’ll to you speak much. very the next you Thank months. all three

Thank you.