Tesla (TSLA) 24 Jan 242023 Q4 Earnings call transcript

Good afternoon, everyone, and welcome to Tesla's Fourth Quarter 2023 Q&A Webcast. My name is Martin Viecha, VP of Investor Relations, and I'm joined today by Elon Musk, Vaibhav Taneja, and a number of other executives.

Our Q4 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 we remarks. uncertainties, risks in differ results jump including recent to mentioned Actual has could of into due Q&A, or some But SEC. [Operator the Instructions] a Elon number those most before filings operating and Elon?

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of business not will think electric years XXXX the X.X year-over-year delivered. delivered year as record hours strong Y flow predicted. gigawatt tremendous grow Storage the and proud remained The as is I'm billion nearly business, cash very storage over to best-selling to the spending gigawatt at the than for that I there. Model kind, growth million of many said vehicle of in growth, in faster future yes, globally, digits. just vehicle and see $X.X best-selling continue car Energy And X.X of super batteries predicted, XXXX so on in the became with hours triple before, projects. it units business we'll people that. Free spite compared work that XX vehicles, I strong the So storage doing much in any

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So years and great thank -- our employees of strong come. and to a a to and year our XXXX all suppliers for to again investors, Thank you forward and looking our you.

Thank as you, and CFO, our Vaibhav, some well. opening has remarks

Thanks, afternoon, everyone. Martin. Good

mentioned, for we as was being business. Elon in despite terms As both a energy and in of well achieved business our as year for record our deployments This XXXX had a auto in year challenging deliveries record production to would terms resolve team of higher interest to the customer our being us through this whole Tesla their like rates dedication inflation. throughout. Big thank period. thanks I and for with higher also and challenging

and of generated billion the we to XXXX our terms of of on the billion and ended In end $XX investments cash year over flow cash over hand. with $X.X financials, with $XX of year free billion revenue

recognition business, certain have due net by impacted onetime being deferred continue companies the in of sustained in era. similar now the gone of recently This be in QX, their billion history a phase will income other vehicle tax we several per see through our GAAP companies assets. in other early unit Cybertruck tax benefit to to in XXXX was In $X.X rate our similar with to is profitability release improvements more the our Our recent who was line with allowance the of of from despite accounting. Accordingly, S&P noncash valuation on us our of XXX. booked and starting change cost

the to our parts is since extremely equation, few. name this result, there moving which out in improved change a local predicting of a challenging As auto auto or gross are That of are incentives, many control, sequentially. tariffs said, like margin gross our margins to some

on our platforms. reductions, are we While the the teams limits are focused within cost current approaching

front, customer digital XXXX. campaigns promised, the appreciate of still in investments we in On are made phase. in education We acquisition customer the as the fully as we importance demand

of XX% Tesla Our owned data XXXX buyers in never before. suggests a our vehicle that around

are just figuring the Tesla concept for them cost. overlooked versus of ownership. vehicles, creative out We upfront ways the of and cost them benefits mostly being owning about is bring gas-powered among new key to the a in educate This being customers total in

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First, $X,XXX at of credit, point-of-sale we a buyer for as offer immediate the for purchase time an qualify benefit customers that of reduction now means the to who Model for Y, customer. which end

this lease partner the Secondly, within using we attractive to recognized and Note sales very are Y as that program and rates continue upfront for offer sales. under leasing automotive Model reported X program. our revenue

back XXXX. the This another auto a terms to by had the us deployments business works been year revenues XX%. for again in Storage This to and energy record laying by our some than Energy in make for rate increasing doubling whole their quite of thank team the growth in years than to building reality. Megafactory more with our business I efforts with metro. foundation business poised is in more surpass Tesla a has time Our this would like few

services Our to supercharging, started cars and services and revenues we to others our our fleets as -- from results, fleet-based and meaningfully as to fleets also business used the contributing expect our continue increase. grows

We our be it this be growing excess XXXX, future and Tesla, us continue for output, Accordingly, for critical in capital XXXX in this I to our for in would thank investments we helping million. can like cost the up growth being everybody foundation questions, of focus continuing in again, increasing would efforts to the next open reduction our initiatives. and suppliers believe Martin. to our at growth. Once of expecting For lay to us currently our We phase is $XX journey. with our our are expenditure investors

is through and investor you, Question #X Thank go Michael. questions. let's from

platform XXXX? you production so has the see might to in that line Austin, compact next-generation time moved Given the of vehicle vehicles the that next-generation improved the we start

is often because revolutionary Giga to really in We off-the-shelf, type a won't easier a often the -- new live reason of shows production technology taken That's with in says. to to Austin -- it's but salt was the a of not thing. new of we our optimistic. our current if be tremendous that XXXX, it's I'm line need your just things line I be optimistic we put that schedule mean of the regarding the what manufacturing grain lot time. engineers second will I'm with this revolutionary at I living engineering sort Texas want on start new manufacturing like should a half. Tesla current towards of lot blow just here. The to There's works elsewhere. mind, certainly want end since just amount But don't And line. technology, schedule say for on of But I This I sometime the versus

expecting to production emphasize, of next currently are be ramp. sleeping I will we Like That start production a but challenging line be second on -- the So half year. can't practically. we'll

will that exists In head be. But above manufacturing be confident going, not level. technology is the in we world. next will once it it fact, any It's am practically, that other and I shoulders anywhere

what curve So looks off S predict of real and always it's then that It it starts exponentially. always manufacturing slow, difficult to like. grows

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week cells from expect next into been XXXX Thank get is Drew? And Michael has when rate? What you. again. do per you there? to ramping question barrier the multimillion cells The to

Yes.

want that hard actually cell to any it's is production our too. But with XXXX because allay for it is as to weeks XXXX these I've describing concerns commenting here some Cybertruck the the limiting that. finished ramp Cyber inventory. an Elon about way First, keep regarding to And ramp ahead is people And S vehicle it things. predict goal not I for but I'm only the just of of curve programs. Today, just said, future goals. our Like seen

they do. Like do make are cells. there That's where companies like hard a problem. all battery they all entire It's is

Indeed. Indeed.

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manufacturing And technology.

Yes, exactly.

the addition Texas their regarding improvement new cell of QX, the production before. installed cost assembly what was X more the with energy in teams I've mentioned and our rate line, product yield design what have of the increase in And factory of new ensure to in quality of successfully now the to process which commissioning, the production doing, running the we're design just year. in and to in we And line line, for using from was and Y X and the cell And in fourth swapped collaborated focus currently returns team assembly terms Model do any to X XX% design as and ramp major we're able starting the Cybertruck engineering introduction, lines X trials, QX. And changes will a as first QX X and be this cell, priority.

definitely, this year is a for So XXXX. big ramping

We do our expect suppliers. also we ramp to from want also emphasize that orders to

So suppliers. our suppliers. our It's replacing this not is supplementing about about

CATL. longest got an our obviously, LG is we of We've company. supplier. Panasonic, So are our very BYD. suppliers. We've appreciative and They're got amazing

Tesla is shareholders XX% AI at that he uncomfortable be you. he is doesn't voting? has Thank that next The expanding retail Adam. Should robotics stated concerned if and have of Elon question from

out why that challenges let over had institutional but be artificial activists guess it, of and concern the we've to capability services, what would and advisory path Glass here, of those is ideas control I explain -- shareholder want be and -- lot I a stage little lot about there's -- strange And if a don't basically juggernaut could so I is that should I robotics have what company done. I of I Lewis, and see voted intelligence that organizations sort of influence be my my to creating me of that concern at with some Yes. call truly power. a which an by have sort firm ISIS, them infiltrate which ISS, random shareholder immense

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credits automotive Thank your what question is margin year? for you. gross full The the is next for expectation ex regulatory

possible. every exercise, at engineering is chase remarks, of we're focused the I reducing used we is many pennies the level, further. A exercise, constant our to on we leads have Like few saved is floor. the element packaging production the to cost my materials we reduction. just -- Each cost a cost very penny mentioned, the through said look from which whether This to and of to other scrutinized subcomponent but at to or down opening I things, to redesign just This the in cost optimize the vehicles. where extensive down not down component and whereby to get involved --

a this. strong team, focused which We hyper on have is

this of... However, because thing to predict very precisely difficult there lot is are a a

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not, to not? is you. anticipate company why in Thank XXXX XX% the next The XXXX? question be or volume If Okay. either does realized CAGR

there in rate said have at our prior we before. as same growing we be periods the won't be where As guidance, will

growth are We major X waves. between

expansion In vehicle. The the platform. first initiated lower, to be will and be the Y., and next with team Model as volume of one we began will one said, with believe trying XXXX, the of X next-generation growth we have we're the global the next-generation focus the launch our because on

When products produce And The cell Thank we and from expect and Giga Tesla question is first right. Michael. their start much. on of to next next-gen the vehicles? XXXX construction All can such Mexico? you the very Nevada these when semi each Giga will as expansion

have broken We to projects. as started we of Therefore, from Austin ramp and incorporate where we the regarding recipe Nevada quickly. plan learnings as Shanghai, other the demonstrate basics phase success the to recently we semi next-generation want work first with in Giga Y our next and Mexico, earlier, the have Fremont to we ground ready said from expansion But started with platform really to construction. X, long start get follow ramped the lead and before with

improved before, -- of years kind with that, production of Yes, X mean, from improvements world. is situation. And important frankly. core things, tissue easier a and that's years Model in figure from my actually cases, and was Y emphasize that, to in life, Model then versions then X exactly. scar I And hell, do was -- really about the variant years on Shanghai line production significantly as Still go mental to of and much those so somewhat X, way of many. of worst then Model sensible an improved we're then Y have do able throughout some It's X manufacturing the line the But of to slightly a Berlin. the some of improved versions of out honestly it -- the the think I technology replicate -- the right Model

you. The question any there company? progress made licensing with next been Thank for an with is agreement Michael another FSD has

and but be believe real lots car yet. companies don't should think licenses, tentative but really -- we've of it's conversations, for quite I they think FSD some asking I had

I the this were to technology. would become if full calling another emphasize and probably license of CEO company, I car self-driving that do And be to definitely will It's Tesla think definitely that I year. I Tesla obvious asking smart move. want

Thank Optimus volume production line what getting is what from to And of line? you. the for first Siddharth, question the production there? The time next are barriers

a the There's new the Optimus the and the to obviously extremely It's in robot. product no well to technologies value AI productivity a is translate no maker times there's Tesla economy, very think what of is And combined. to car limit an that limit think biggest has capita the product, robot the far a the X at everything exceed something a an revolutionary is you I already economy. wheels. Tesla per the just when we that And we've because if quite X-wheeled technologies else for the capita? capita. economy of car is -- on world. to developed humanoid just robot arguably And robot potential

humanoid by So arms robot humanoid -- with is developed most far the sophisticated anywhere a legs, that's world. in and robot robot being Optimus the just with a

a -- just left team see lot few sure work. That's was malware your territory, you Like -- as make the I that I Optimus it's robot. no any to last impossible in number upload in -- you impossible every is a a precise will This be until something, we've late finally when scale obviously of The can midnight lab. chance a night. on a make be the got of quickly. especially where it we actually very the to -- centralized updating uncharted to units at amazing year. is progress is to want safe, lot product, that doing we of prediction. But it's shipping good with And brand-new Optimus humanoid the that obviously the when and Optimus think a should months. uncertainty control I Optimus public next there's Optimus for lab or advancing of some there's have case uncertainty

a in to most case So we're updated has from ever product server. by going to to said, That's localized kind be thought where I of to want far. potential any the think fold the -- the to safety. But that shutoff -- cannot extreme have valuable it we I the like really central from do be

Just on the to barrier. comment

getting I Like it to to like think get talked something do barrier, we've that it the things, can we but it's part. it and walk about do actually utility is around. like this, to We get can useful.

do already can things. some It useful

But things, these like to making utility. millions like of it's

to get it. to You utility got of

doing year. specialized generalized that the robot can capable And and smart tasks moderately it'll it doing already do course well, it a do that's terms that, of better get will what of -- can Yes, just tasks, be. is through the in of

As in mean AI technology mean runs Optimus super the Optimus that's in looks time. I technology. I improve Westworld, that utopian but like It same situation. building not of the really the same the the set the the technology we lab admittedly, car, the future. was training at same inference a the on we're car, we improve computer

not reference. Yes, best the

invited Nolan of them Yes. to the all lab. of Jon come I Westworld, Nolan, mine actually, Joy, and Lisa The friends see creators --

a come stands, stand, you wild. subsystem wild, got just the test especially well, test like leg -- test exercises doing pretty it It's and think one see on I pretty Yes. arm sort soon. one just in stand hopefully a repetitive where of

We're not soon. anytime Westworld entering

Right, very right. seriously. safety take We're going to very,

The do is orders the you. how anticipate you fulfill Cybertruck be able to when to Thank from Nermin are And next existing queue? many orders? in question

for order be, numbers we orders the soon growing. we in new have all will their been launch. holders has so to The If all, The conversion of sort Cybertruck of want patience. thank And XXXX. very continues, also, as far it keep to very very, order all the trend builds out encouraging. to come First rate the in I likely reservation reservation the after

all focused ramping, all time. the deck so fulfill lead So can we on in a we're demands now on reduced hands

is a price, And dramatically right emphasize could to that much production-constrained gouge early delivery. to feel situation. a Yes, doesn't we important situation, sort it's this people of that us demand-constrained obviously, but very not to raise for the

demand the -- the off So is hook. but really,

we of million, price but on sure the is delivering is as that something X.XX a Yes. order or but X.XX long mean, North see frame. like As maybe like million the affordable, take, And I time ultimately -- on mean, it give I it's have I -- year in America more us roughly Cybertrucks a head turner.

is. you Definitely you up. at go, look Anywhere people thumbs They you. give

Yes. trucks know future It's finally best hardly like -- trucks if the But which that company very definitely to the would the name, on just are good the you It's other the would It's some know them. ever. brand the Cybertruck. you there switch the out road. there, like you made on with looks were But road future. and which our product

reported release. in All delivery energy volumes next Tesla we and is Thank production The the can you. get question right.

Yes.

just trust growth in the a and We hours from will a to to 'XX put to who production assembly to 'XX. consistent the gigawatt do this Megapack line capacity to strong operation critical continues signals driving so second update see demand with brief their XXXX want to And the strive thank infrastructure XX I for around and by on all Megapack of continues thank XX our And the partners of We strong execute globally, end team trajectory through starting to Lathrop to from quarter. Megapack XXXX perspective. of the final like the personally from execution. engineering teams ramp their the year. would double world. through business

your Siddharth. last than the is that results are expand preliminary from and of the car on is the non-luxury on people campaign? price And Given education will Tesla awareness investment average ads? price return many still of educational question investor the you $XX,XXX, lack you. the Thank What ads average less

issue increase solution there's time, -- really EV aware adoption is at well. mentioned, the as But issue. awareness Elon As we address the ultimate affordability the to do same

audience tests series the just digital on some of ran awareness geos of and messaging we a channel. targeted on very investment digital to also different and QX, try the return misconception address driving of the to measure EV, ultimately across channels. And The on drive really generally organic as our our you we're digital particular of these to affordability. in So where campaigns, and focused in and the traffic run XX target close million product the different our campaigns visitors we -- behave million first-time to channels And about safety, website. these our to to viewers viewers number those these X.X traffic large such one reached A actually are similar unique very to through digital those really Texas, visits campaign awareness come of site. The is is website.

trials going understanding exploring So different our a going campaign. to get forward, channels effectiveness doing we're just and to keep better of the of digital this

don't of awareness, sure spend want side. people the we we like to but our overspend will about money money token, awareness. very that creating the this We understand spend the want make keep to aware, we'll and but tweaking same be -- we lot we to are on don't a just we'll methodology importance because increasing on we how careful also to where caution But where I of that would that's at want

some where for Yes. Japan I market geographies remarkably mean there is low, example. are our share like

of service need world, works sure Japan, country. Superchargers the have make and in are the largest in but is any the centers right car that there market Now obviously in third the Japan and the we locations well we to product

market have BMW, least we and carmakers at or like share have. Mercedes currently non-Japanese other say, should which -- to, proportionate So not a we do

And quite there awareness -- is of of to Japan, friends I when that's Tesla. like like think talk mine I lack case. So the they're of in a

we So is, that that's case awareness and regions in much need to awareness. where yes, definitely where countries not a there increase

you. Thank

Let's go to analyst questions.

Ferragu New us? Pierre question Research. first Street from hear you can comes The from Pierre,

really guys. tough it's the on I'm Teams, to Well, being unmute button for Okay. find sorry late.

So yes, like reduction. my the be question cost on would

car a last on over more been has COGS it X You've X, it like quarters sequentially look talked per like And lot. if on average. average, at about X% the than down I already coming the

you of like So year. are a car going a per down that on trajectory XX% COGS means

So manufacturer very, mundane in don't ever consumer the electronics. other I a that's normal of industry a it's manufacturing performance, probably that. But very like auto unheard of very that's and achieved think in but any -- industry. microelectronics performance it's lot or car like a good very

whether cars, things so you like where love a I'd down yourself time? to costs, hear to costs have the become ability down of are industry sustainably into this over in to your how kind line have actually the to with actually together and pulled is cost latter, your about microelectronics see Or thoughts with rest And always to you in more taking yourself closer like think ability consider going do improve you you take your on to more business, the control that you pace.

Yes.

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we from benefits did that. then see So coming

to they I place cost. But future there can said, whatever because in out same further the -- I cost -- limitations. because do Tesla, time would we're or there taken we a out they which as more, care to project current team completely the figure are of, but well a team would try is still platform, previous wherein less as engineering big team supply chain chasing. with our reduction take more that are getting a to like challenge, out we are goes I gangbusters at pace there both the not caution want is kudos give yes, And every them the I to the at go and the would here say those to So

increased us scale also sort of the there. Yes, helps

the like As suppliers introduce looking Elon go existing mentioned. we at renegotiate products, We're new every for pricing. better and opportunity we Vaibhav to penny have

you is cost as opposed And down because is has pricing returnable of more as with -- result companies, become, trucking cardboard, on put environment; routes, become the and trucking going these that negotiating year-over-year. things for far truckloads of better even bigger inbound XX% shipping logistics companies, the Just an the with better sort give more to just using we come to a example, we optimizing the this which our packaging it. by the efficient with and full of optimization into we doing

going are streams continue. to work those So

Xs, also out are We get X, of then more levels as there chain where see X getting Getting of efficiency tiers supply Tier into system. those pricing Tier the to well to Tier the opportunities. are to negotiate the and

then we're And where side, areas the technology is in example. improving great Power on the static, still is especially design a not rapidly. electronics like right,

sort They that the old of fundamentals vehicles result improvements vehicles. that cost come over are bring And into new well. they only in reductions go to there driven to We as up the device generation. don't like the from generation continue

So to space. that's you with the talking about microelectronics what closer were like

Some in of the vehicle. that exists

trying more everyone car certainly, tech is computer the of from. a our many has last than car XXX scrape pennies lot ways automotive to and is production, new of over years in And so

amount crazy orders cars a in compared have our to like anyone compute It's We of magnitude. else. of

that And down, we get to ride right?

know, more. nutty some I number. X,XXXx Maybe don't it's

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been we've riding wave. that cost electronics definitely So

that the much the built put I or way think than -- that on we are and that to non electronics very industry cars vehicle even automotive we traditional like have call our structures And other what together. is you way things to industry. microprocessor the the do side, costs do we no down then through breaking down And automakers bring mindset closer power

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

in portfolio X, Yes, today, you addressable of about the run with price I'd given market of which consider the your of the market? X probably you mentioned million estimate rate love points between you've what your and addressed What's like market think car the growth like the already a cars, with big this of -- share And You're today. this you addressable quick the S. like you one. today? the you It's your unit shipping have size like what these what a kind of X do are achieved to phase Y, about you X periods. you hear

we that's don't firm I have we have idea say if I it's actually -- a exactly. anybody did don't -- think to hard -- know

there's small automotive -- I as Yes, think it this one the still very EVs at mean, I share. way market look about wouldn't to is -- a well. contribute say industry

share our can So pie. with I a as number specific and out I goal to certainty. that have is take say of give market yes, we you? do think But much to try that don't

It's well. growing couple be in X% a today, or And it's like years a could it but pie XX% as it's future. of in the

Yes.

we've get. at I like not we've It's cars this, you million a And sell. can how XXX of And great way barely vehicles can XX% many about EVs said sell, X% there's and market's we're how how can more year, it's certainly, that sell. you and you many that. to still always looked think the many it,

Y. I in say, lower worth price at, they than much that priced world, look noting the the Model vehicles of mean you average it's the selling other top-selling if are

priced RAVX, that Toyota than like they're ours. thing, Civic, of a lower So much Corolla, kind Honda

do despite cars. be it's expensive wallets volume So in It's afford able a quite difficult the car best-selling to really people unit than that and thing being remarkable them for are to stretching other a much to more high-volume their Tesla.

you. Thank

from The analyst. Jonas next Morgan the next from to go question Stanley. Let's comes Adam

I So feels this Optimus see everybody lab. the on call sure I'm wait to can't way. the same

last is time? September Your Elon, this realm It XXXX. that a the seems year a changed Can in AI Tesla AI like has lot this Day and year? Day, was expect we

a good it's Yes, question.

Days, these we literally of a competitors basis. that found have some do when AI on our do frame-by-frame We look we at what

They do.

we copied. things being then these And find

with Battery Day. Same thing

Same thing with Battery Day.

later a little over with to of we team. would have recipe we talk the But about year. secret cautious sauce. yes, something kind So the think I'll revealing this I update it think to And of be good some the I exact do. might be do

is AI recruiting, should Tesla so main sort be they the and of AI -- robotics as change of company. as these of a Our perception goal Tesla company with think to of Days an car thinking Tesla as people when

OEM into as on of topic OEMs Elon, a markets tremendous and that thoughts love as -- in with in for saturated Tesla investors this supply, achieve And the follow-up, to China there's partner expanding could scenario Tesla allow China-based can United the Maybe you Chinese western growth in the like help of as I'd the markets transport States? much western accelerate kind sustainable where competition should a your envision a markets? success Europe to market gets how and a

car is observation the that companies generally world. our Chinese car are Well, companies the the most competitive in

think or barriers much established. I So if other world. I will outside China, most significant tariffs think car pretty of there in the on Frankly, barriers will established, depending success are not of trade kind are they trade demolish companies have they what

could obviously -- to happy company the an other Supercharger good. We So our revolution. advancing access and sustainable they're anything happy we're on Certainly, happy also to perhaps give we're We're to partner. energy license license technologies electric network. be don't to except car front, self-driving, see to the obvious opportunity Supercharger in that helpful extremely any full

Barclays. comes you. from from question Thank next And Dan Levy the

First, I'm factors to walk through unlock if you the of can some required your wondering gating next-gen just platform.

Cybertruck, initiatives a a where a there's do things of of You XX-volt like the manufacturing to you that cost do give Cybertruck and about features is Maybe sense a think back a these Investor stand. And new needed technologies what -- extent can in things and and reductions know number a going factor we batteries. for number architecture Day next-gen believe is really of powertrain. you proving ago, gating cost XXXX really at year be really just us talked platform? you the ground initiatives employing your in platform To unlocking for next-gen to

that a Yes. I obviously should platform. at We're When anything of to gating think that said, Elon next-generation manufacturing vehicle. doing don't next-gen do have you the be you prove it innovations, lot for Cybertruck as out. something scale, the in considered for

and just the don't throw it You just build on it. line

adopts those do phases wanted open it's something going we definitely We're those we're well. forward, technologies manufacturing also So we that. everyone industry wants to for new if to now. Sure, carry validation the as to all through was something and XX-volt partnering hope

-- time -- XX industry really people moved thing, XX. but auto so is like that XX [indiscernible] but, of to the XX know the number high man, inside-baseball from this that it's random

of XX. number Random

Yes. Well, it's random. much less

but... random on less Slightly human based injury

I CAN communications you of the mean of communications, dramatically which reduces sort bus, bandwidth vehicle to need sort of in of moving slow. copper amount to Ethernet the higher pretty as and opposed level is

it's really cars So bringing just to...

XXst century. The

pretty Yes, much.

for it's -- normal laptop. certainly like So a like

just like but them test car, work to that get not it's the going. of architecture is of Certainly the in our and an them means. gating The evolution any the by gating is vehicles, out bringing and finish design manufacturing

Right. right? execution, and programs Yes,

like time, time, this time tooling executing lead factory and lead So manufacturing about program. it's lead talking equipment

vehicle. make There's a for machine that lot of specialized the our machines next-gen

to order existed can have machines a They just So has a design a that to these existed. car not from are never actually has build that in way machine you never anyone.

Yes.

like just a have as you an So you phase, don't design validation phase design have well. validation but equipment

the make us It copy very the makes that have it you doesn't to the copy hard machine. machine to machine that makes because

Talking about tiers.

manufacturing Yes, yes, exactly, inception.

that our next-gen think advantage machines a sustainable is the go place I order to it's don't So no to make do there powerful, car that just quite exist. because

have FSD. you could do NVIDIA update think of just training mention not at the does sufficient do of what release if supply the your now so improving Dojo you Dojo, follow-up, system? you on and provide be an expect in a stands needed you resource where GPUs Or Dojo us As a that point for to

question I your the -- is deep AI is part one. a mean that of

net -- processing like significant neural with obviously a a not it something GPUs. So wrong hedging our or the vestigial. we're GPU's unit that's orders NVIDIA like bets They unit, of graphic processing can't see -- didn't word, you that. GPU Yes, produce so graphics, word. here really like funny there's is no

in So self-driving lot progress a is and training -- of our limited.

need important The that's a into in training, inference. like human. the you effort with it's effort much less training, put Something you more

train takes do like effort mental a it hours, a to the person, So if in just you something. class, of sort less subject, XX,XXX

you takes first and And driving. mental you drive, for things it -- many it about how had and your safely. of only to capacity still you think after you've bit a completely drive took to on been can much to you drive other If was focused mind drive, little your remember when to years, started be it of driving

do, you the training is level. more it the more at efficient the inference So

a it and Dojo, risk, dual whatnot. is for jobs, of It's high sure I long we payoff like Dojo not a Dojo need all. path training have plans And we taking X.X, do training. but X, Dojo because It's the X and It's And long it high scaling a so a So Dojo shot. probability. we're up. the program. but a high doing not payoff a -- pursuing is of Dojo at lot high and NVIDIA shot we potentially think thing as it's working, are is something would and very of that worth is

So payoff. I got think potential. I can't high emphasize it's enough, risk, high

complete even potential -- Tesla-designed program. inference Mobileye. then X Version It's -- Hardware so anyway Tesla. terminology probability the the X think X, because I version the the to confusing. of very a complete It we're There's of of bit the the -- interesting version now if About design of think and actually was also the of hardware which AI design a is chip -- X subject. the what's given it's X actually version called but a So chip. And NVIDIA, version it success has inference special. sense I'm Tesla-designed I our on was X, in for to car, makes Hardware still for X belaboring is it's the low something was about we're

sort in when and to something future, Hardware there's X can of in not generalized X use computer interesting X. I play from in-car potentially that -- a GPTX from -- improvements to we're run gigantic do where tasks, X making a or the or cars AI mean like X So that. are can the

XXX tens robotaxi of of available you've in right whether XXX they're leaves that vehicles millions with Like may, else decisions even well -- Tesla that the compute compute a architectural over in future, there, everyone scenario, XX in still than used heavy time If hours, combined. it's out maybe more out hours got of of hours. of use, possible have the

question next from comes And from you. the Thank Fargo. Colin Langan Wells

or left. As ] try QX. we're And the about about [ thinking about implies not talks like you're aperture above to sort limits, of sounds that press that XXXX, comments XX,XXX hitting going whittle there's slightly in the but the into talk approaching and to on continuing release it the release much away, [ ]

thought increase, I add that benefit raw of you addition, will out. into I material is wage to year. costs said sort played almost -- next And kind of have that In the hourly you are guess,

is level there stays of to to kind should kind Or opportunity it this the at So go be of XX,XXX? continue below modeling an into we 'XX? that

wage But said, down. I cost the looking other where keep We of increases, cost are opportunities else coming like try are we increases. which of aware at definitely can out through because cut we the and figure and

try will but to opportunity number, there. and So more to definitely costs we there opportunity a to, further. bring down definitely is more I guide specifically won't there's which get

opportunities chain long bunch. Yes, figures side such on And more reductions. X to is for we're seen XXXX. design then in even already whole just we've from we're to of got organization. what what it's North perspective, supply of Lars cycle cost come on my a still through the has a time point, -- with a commodities commodities lots chasing there's that material this the

the on commodities. And there's still some tailwind left

what That's I mean. Yes.

Aluminum and steel.

And battery materials. Yes.

improvement that's to It in mind X% my that boggles $X cost, billion. if we think a make

I ago the does it by where but slam the that dunk, So started if mean most long if be not cars think lead What? valuable the we like, ultimately? week. And cost world. in well, a company reduce very making like With we we're only we good I yes, execution -- like $X.XX, on -- not average, a billion. could with I execute said, XX it's off $X Tesla it's

Thank you. Colin, do question? you have follow-up a

Yes, go level. would just the In the commentary, mentioned a follow-up. taxes you the XXX S&P quick to

that gradual below considering? been it to you've that to tax And a year S&P, next be cash be that trending we're think would typically change should any going Or we jump next right Is modeling it's think I XX%-ish. from -- next year? as impact years? we like few that XX%. change should well up over the slightly I expect when

Yes.

of on it's amount, spoke no taxes account from books. for which on your you the is cash it I there's So valuation taxes release about. impact how the What does

had So enough et accrue it's taxes. there wherein basically are cetera, have because an didn't to we book we accounting NOLs, certain wherein change jurisdictions

means that Now that released valuation the deferred and on books, have allowance rate recognized we been immediately tax your has assets tax the goes up.

Okay.

Thank think have much and so you. Bye-bye. your again months. X all all you I that's we speak the you questions, Thank we'll of in time today. for for to

you. Thank