Q3 2024 Tesla Inc Earnings Call
Is that something that the industry has seen year over year declines in order volumes in Q3 Tesla at the same time as achieved record deliveries in fact, I think if you look at EV companies.
Worldwide.
Best of my knowledge.
No EV companies even profitable.
An archive to the best of my knowledge.
There was no EBIT division of any company of any interest to go to a company that is profitable. So it is notable.
That Tesla is profitable despite.
Very challenging automotive environment.
Speaker Change: Uh huh.
Speaker Change: And this quarter actually is a record Q3 for us.
Speaker Change:
Speaker Change: So shall we produced our $17 billion because actually just yesterday. So congratulations to the teams that made it happen to Tesla.
Sterling: Sterling, we have been smart work to make 7 million cars.
Sterling: So let's see.
Sterling: So have energy storage business is.
Sterling: Growing like wildfire.
Sterling: With strong demand.
Sterling: Kantar World.
Sterling:
Sterling: And as people know on October 10th we laid out a vision for autonomous and electric future. Then I think is very compelling.
Sterling: So the test team did a phenomenal job that was.
Sterling: It's actually giving people an opportunity to experience the future.
Sterling: What we're.
Sterling: Humanoid robots wolfcamp long the crowds and whatnot.
Sterling: But even presentation or anything, but especially won't be among crown serving drinks and whatnot.
Sterling: And.
Sterling: And we had 50 autonomous vehicles go 20, cyber caps, but there were an additional 30 bottle wise operating fully autonomous read the entire night.
Sterling: <unk>, thousands and thousands of peoples thousands of people shrink.
Sterling: With the with no incidents they turn out.
Sterling:
Sterling: So.
Although the winter.
Sterling: It's worth emphasizing that the sub cap had no steering wheel or Brexit or accelerated pedals.
Sterling: Maybe there was no theres no cost there was a way for anyone to intervene manually even if they wanted to and the whole night went very smoothly.
Sterling: So.
Speaker Change: Regarding vehicle business, we are still on track to deliver more.
Speaker Change: Portable models, starting in the first half of 2025.
Speaker Change: This is.
Speaker Change: I think probably people are wondering well what should I assume for vehicle.
Speaker Change: Physical sales growth next year.
Speaker Change: Yeah.
At the risk of I would just take a bit of risk here I don't want to give some some rough estimate which is I think it's 20% 30% vehicle growth next year.
Speaker Change: <unk>.
Notwithstanding negative external events like if there's some force majeure events.
It's a big world breaks out or <unk>.
Speaker Change: Interest rates go Sky high or something like that then we would be.
Speaker Change: Kent.
Speaker Change: Overcome massive force majeure events, but I think with a lower cost vehicles.
With the advent of autonomy.
Speaker Change: Something like 20% to 30% growth next year is is my.
Speaker Change: My Best guess.
Speaker Change:
Speaker Change: And.
Speaker Change: And then and then cyber cap, reaching volume production in 'twenty six.
Speaker Change: Or do you feel confident of southern cap, reaching.
Speaker Change: Reaching volume production at 26, so just starting production reaching volume production at 26.
And that's.
Speaker Change: Uh huh.
Speaker Change: But that should be substantial growth and we're aiming for.
Speaker Change: So at least 2 million units a year.
Speaker Change: Side of the cab.
Yeah.
That there'll be more than one factory bid.
Speaker Change: I think its at least to make things here, maybe 4 million ultimately.
Speaker Change:
Speaker Change: So.
Speaker Change: Yeah. This is just my best guesses, but you got some of our best guesses, but that's where my best guesses.
Speaker Change: Yeah.
Speaker Change: The 26.
Speaker Change: L 46, 80 lines the team is actually doing great work there.
Speaker Change: The $46 80 is.
Speaker Change: Rapidly approaching the point, where it is the most competitive so so when you consider the fully fully landed.
Speaker Change: Cost.
Speaker Change: Of a battery pack.
Speaker Change:
Speaker Change: Fully landed in the U S.
Speaker Change: Net of incentives and duties.
Speaker Change: <unk> hundred 46, 80 is tracking to be the most competitive.
Speaker Change: Maybe lower cost baked in what else will be considered than any other alternative.
Speaker Change: Yes.
Speaker Change: Not quite there yet but we're.
Speaker Change: We're close to being there, which I think is.
Speaker Change: Extremely exciting and regret.
Speaker Change:
Speaker Change: Several a lot of ideas to go well beyond that.
So.
Speaker Change: If I think there is.
Speaker Change: If we execute well the $46 80.
Speaker Change: We'll have the <unk>.
Speaker Change: Internally produced cell will be the most cost competitive.
Speaker Change: So and so being North America.
Speaker Change:
Speaker Change: A testament to a tremendous amount of hard work there from Biogen.
Speaker Change: So.
Speaker Change: That said, we will continue to buy a lot of sales from our competitors our tests not to make.
Speaker Change: Sure.
Speaker Change: To make cells just internally, so I don't want to sort of any alarm bells here.
Speaker Change: We have roughly increasing.
Speaker Change: Substantially all of them.
Big outward and our stationary storage output, so we need a lot of cells.
Speaker Change: And most of them will still come from suppliers, but I think it is.
Speaker Change: It is.
Some good news stumpy Tesla in total so.
Speaker Change: Historically, it's been the most competitive.
Speaker Change: And in the U S.
Speaker Change: So with respect to autonomy.
Speaker Change: As people are experiencing in the cars.
Really from week to week.
Speaker Change: There aren't significant improvements and the miles between interventions.
Speaker Change:
Speaker Change: So with the new version 12 five.
Speaker Change: Release of wholesale kind of entire trunk.
Speaker Change: <unk>.
Speaker Change: Combining the code into a single stack some of the.
Speaker Change: City dragging in the antenna highway driving our one stack.
Speaker Change: Which is a big improvement for the highway driving.
Speaker Change: It's just all neural nets.
Speaker Change: And the release of actually smart summon.
Jeff: We're trying to a sense of humor here Jeff.
Jeff: Uh huh.
Jeff: And we're also so that's about one five.
Jeff: 13 of FSC.
Jeff: What is going out soon.
Jeff: Sure elaborate more on that too.
Jeff: Later in the call.
Jeff: We expect to see roughly a five or six fold improvement in miles between interventions compared to $12 five.
Jeff: Looking at the year as a whole.
The improvement.
And Myles Katrina interventions, we think will be.
Jeff: At least three orders of magnitude.
Jeff: So.
Jeff: That's a very dramatic improvement.
Of course of the year.
And we expect that trend to continue next year.
Jeff: So.
Jeff: Sure.
Jeff: The current cards internal expectation.
Jeff: Selling general expectation.
Jeff: Or.
Jeff: That shows the FSB having.
Jeff: Yes.
Jeff: Longer miles between English sheep.
Jeff: Human is the second quarter of next year.
Jeff: <unk>.
Jeff: Which means it may end up being the third quarter, but its next it seems.
Jeff: Extremely likely to be next year.
Speaker Change: Sure do you want to.
Speaker Change: Yes, and missing might've been clinical interventions.
Yes. Thank you you mentioned it on the.
Speaker Change: <unk> already made at undertakes incrementally towards a fire from starting up this year and then with that in the release, we expect to be.
Speaker Change: That was the next from the beginning from January of this year on my prediction is soccer.
Speaker Change:
Speaker Change: And this came in because of the technology improvements going to endo and having higher frame rate.
Speaker Change: Pardon me also helped by hardwood floors more capabilities.
Speaker Change: So on and we hope that.
Speaker Change: We continue to scale the internet FERC the data the training compute etc. By Q2 next year, we should cross or the.
Speaker Change: Average human my subcritical intervention panic collision the case.
I mean, that's just.
Speaker Change: Unvarnished, our internal estimate yes.
Speaker Change: So.
Speaker Change: Sandbagging or anything else.
Speaker Change: Our total estimate as Q2 next year to beef.
Speaker Change: Safe than human.
Speaker Change: And then to continue with rapid improvements thereafter.
Speaker Change: Yeah.
Speaker Change: Sure.
Speaker Change: Sure.
Speaker Change: No.
Speaker Change: Good luck.
Speaker Change: Okay.
The vast majority of humanity has no idea.
Speaker Change: By themselves.
Speaker Change:
Speaker Change: So.
Speaker Change: Especially for something like a model three or model line.
It looks like a normal car.
So you don't expect more card to be able to.
Speaker Change: Be intelligent enough to drive itself.
Speaker Change: <unk> cabinets looks different sovereign truckload suffering.
Speaker Change: Bottom line <unk> III.
Speaker Change: Look they're good luck and cars, but look at RSA book fairly normal you don't expect 1 billion all looking car to be intelligence.
Speaker Change: AIG two deals drive, though but.
Speaker Change: It does.
Speaker Change: So who do you want to expose that to more people.
Speaker Change: And so we're doing everything.
Speaker Change: Every time, we have.
Speaker Change: Okay.
Speaker Change: A significant improvement in the software or we'll roll out another 30 day trial, so to encourage people to try it again.
Speaker Change: And we are seeing significant improvement in adoption.
Speaker Change: <unk>.
Speaker Change: So they.
Speaker Change: The take rate for MFC has improved.
Speaker Change: Improved substantially, especially after the 10 10 event.
Speaker Change: Yes, so there's no need to wait for robo taxi or <unk>.
Speaker Change: To experience full autonomy, we expect to achieve that next year with the with our existing big line.
Speaker Change: Yeah.
Speaker Change:
Speaker Change: Order towards actually spot someone gives a small desktop what it's going to look like.
Speaker Change: The car able to drive itself to the user.
Speaker Change: <unk> currently is still limited, but then quickly.
Speaker Change: The increase in <unk>.
Speaker Change: Already at more than $1 billion.
Speaker Change: Hedge himself a sportsman.
Speaker Change: Yep.
So.
Speaker Change: We actually we have four Tesla employees in the Bay area.
Speaker Change: We already are operating a ride hailing capabilities. So.
Speaker Change: So you can actually with the development App you can request a ride.
Speaker Change: And it will take you anywhere in Bay area, we do have a safety driver for now but.
Speaker Change: The software required to do that.
Speaker Change: We've developed a great day.
Speaker Change: Kevin do you want to elaborate on that yes sure David.
Kevin: We showed some screenshots of this in the Q1 shareholder deck.
Kevin: Yes. This is real we've been testing effort as a part of the year and the building blocks that we needed in order to build this functionality and deliberate in production, we've been thinking about and working on for years.
Kevin: It just so happens that we've used those building blocks to deliver great features for our customers in the meantime, such as sharing your profile synchronizing across cars. So that every single car that you jump into whether it's another car that you own a car that somebody's loan to you or rental car the jump into it looks exactly like yours everything synchronized senior positions.
Kevin: Media navigation everything is the same just what you would expect from one of our Robo taxis.
Kevin: But we gave that functionality to our customers right now because we built it intending for it to be used in the future.
Kevin: It really.
It leaves enough up selling now.
Kevin: And then cyber security that we knew we were going to need to deliver that functionality.
Kevin: Sending a navigation to destination from your phone to the vehicle.
Kevin: And so you're doing that now with the the ride hailing app, but it's something that we have.
Kevin: Made available customers for years.
Kevin: The progress on our route and the mobile App, that's something you'll need the ride hailing app, but again, we released that.
It's not like we're just starting to think about this deal right now while we're building out the earliest stages of a ride hailing network. We've been thinking about this for quite a long time and we're excited to get functionality out there.
And we do expect to rollout.
Kevin: Right hailing again.
Kevin: California, Texas next year.
Kevin: To the public.
Speaker Change: But not the California somewhat.
Speaker Change: Quite a long regulatory approval process.
Speaker Change: I think we should get approval next year, but but it's contingent upon regulatory approval.
Speaker Change: Texas.
Speaker Change: A lot faster so it's a.
So I would say like.
Speaker Change:
Speaker Change: But we'll definitely have available in Texas.
Speaker Change: And probably haven't available in California subject to regulatory approval.
Speaker Change: And then.
Speaker Change: And maybe some other states actually next year as well, but at least in California and Texas.
Speaker Change:
So I think that'd be very exciting and.
Speaker Change: That's really a profound change.
Speaker Change: Tesla becomes more than a.
Speaker Change: Sort of a vehicle.
Speaker Change: Yes.
Speaker Change: We remain factoring company.
Speaker Change: At that point.
Speaker Change: So.
Speaker Change:
Speaker Change: We published our Q3 <unk> mode.
Speaker Change: It shows good morning, wherever you 7 million milestone payment that can pass the U S average one crash roughly every 700000 milestones currently showing attacks snooki improvement relative to the U S average.
Speaker Change: And we continued to expand our aon training capacity to accommodate the needs of both MST anonymous.
Currently not not training compute constrained.
Uh huh.
So probably the biggest limiting factors of the.
Speaker Change: The efficacy is actually getting.
Speaker Change: So good that it takes us a while to actually find.
Speaker Change: Mistakes.
Speaker Change: You start getting to where it can take 10000 miles to baidu.
Instead of a mistake.
Speaker Change: It takes a while to figure out which is this.
Speaker Change: Oh, it's a soccer ball rather than they started about eight rather than spot for both be it actually takes a while to figure it out because neither one of them making mistakes.
Speaker Change: Take a long time to make mistakes so.
That's actually the single biggest limiting factors.
Speaker Change: And take us to figure out, which would which personally is better.
Hum.
Speaker Change: Class problem.
Speaker Change: Obviously, having a drag fleet.
Speaker Change: It's very helpful for.
Speaker Change: Breaking this out.
Speaker Change: And then with Optimus Richard Richard.
Speaker Change: ASP improvement an optimistic starting movement on October 10th and our Nextgen 100, Guam, which is 22 degrees of freedom, which doubled the prior.
Speaker Change: Uh huh.
Speaker Change: And more on.
Speaker Change: It is extremely humanlike.
Speaker Change: And also as much better tactile sensing.
Speaker Change:
It's really good.
Speaker Change: Competence thing that we are most advanced humanoid robot by a long shot.
Speaker Change:
Speaker Change: And Moreover.
Speaker Change: The only company that really has all the ingredients necessary to scale.
Speaker Change: You're right robots.
Speaker Change:
Because the things, but what about other companies' mistakes that they're missing.
Speaker Change: The AI brain, but they are missing the boat, it's really scale to very high volume production.
Speaker Change:
So you sort of see some impressive video demos, but what did they like.
Speaker Change: They like the localized AI in the.
Speaker Change: Go ahead to scale volume to very high numbers.
Speaker Change:
As I've said on a few occasions before I think optimists wells really be first Aqua Park.
Speaker Change: Hello.
Speaker Change: I think as contracts are being the most valuable product.
Speaker Change: For the energy business.
Extremely well.
Speaker Change: And the opportunity ahead is gigantic.
Speaker Change: The later.
Speaker Change: Thank you Pak factory reached 200 Mega packs a week.
Speaker Change: Which is now a 40 gigawatt gigawatt hour a year run rate.
Speaker Change: And we have a second factory in Shanghai that will begin with around 20 gigawatt hours a year run rate.
Speaker Change: Q1 next year with respect to next quarter.
Speaker Change: And that will also scale up.
Speaker Change: It won't be long before we're shipping 100 gigawatt hours here stationary storage at Tesla.
Speaker Change: Okay.
Speaker Change: Right.
That will ultimately grow I think to your multiple terawatt hours per year.
Speaker Change: It has to actually in order to have a sustainable energy future.
Speaker Change: The terawatt scale here, you're not really moving the needle.
Speaker Change: So.
Speaker Change: If you look at our literally very complicated.
Speaker Change: Last Master plan.
Speaker Change: Which I think actually it's too much detail.
Speaker Change: Maybe I'll ask grant to analyze if needed.
Speaker Change: Can you give us the T L D R.
Speaker Change: The last Master plan.
Speaker Change: But we showed them that basketball and that it is possible to take all of us to.
Speaker Change: Fully sustainable energy situation.
Speaker Change: Using sustainable energy power generation and batteries and electric transport.
Speaker Change: And there are no fundamental material limitations like they've got some very rare material that we don't have enough of our partners.
Speaker Change: We actually have enough with raw materials to CRE.
Speaker Change: Okay.
Speaker Change: Take all of human civilization make it sustainable.
Speaker Change: And even if utilization dramatically increases.
Speaker Change: Electric usage could still be fully sustainable.
Speaker Change: But one way to think of.
Speaker Change: The progress of our civilization.
Speaker Change: Space shuttle of esoteric, but as percentage completion of Scottish upscale.
Speaker Change: So cautious scaled one would be you're using all the power of.
Speaker Change: While the planet.
Speaker Change: We're currently less than 1% on car shack level.
Speaker Change: Level one.
Speaker Change: <unk> would be using all the power of the Sun.
Speaker Change: And level three we'll look off the galaxy.
Speaker Change: So we have a long way to go.
Speaker Change: [laughter] Hello.
Speaker Change: I'm going to go.
Where.
Speaker Change: Where do you think it caught a ship terms.
Speaker Change: It becomes obvious that.
Speaker Change: By far the biggest sources of energy as facade.
Speaker Change: Els is.
Speaker Change: Okay.
Speaker Change: And the noise.
Speaker Change: So.
Speaker Change: So in conclusion Tesla is focused on building the future of energy transport robotics and AI.
Speaker Change: And this is a time when others are just focused on managing around it near term trends.
Speaker Change: I think what we're doing is threat approach and.
Speaker Change: Uh huh.
Speaker Change: We execute on our objectives and be well.
Speaker Change: It sounds like my prediction is task will become most valuable company in the world.
Speaker Change: Probably by along by a long shot.
Speaker Change: I want to thank the terms of the team once gainful strong execution in a tough operating environment and were looking forward to building an incredibly exciting future. Thank you.
Speaker Change: Great. Thank you very much Elon and that Bob has an opening remarks swap.
Speaker Change: But there's also a world also.
Speaker Change: And once again don't stainless gains of which the assistance they want what they eat.
Speaker Change: But the generation of operating cash flows of six months into it.
Speaker Change: Automotive revenues grew both quarter over quarter and year over year.
Speaker Change: <unk> unit volume growth, we did experience a reduction in <unk>.
Speaker Change: Primarily due to the impact of financing incentives as a reminder, providing these incentives primarily using third party banks and financial institutions and recognize the cost of these incentives is enough for a reduction to them.
Speaker Change: We released <unk> four slide with truck and other features like actually small someone like the lepton dwell Lego.
Speaker Change: This contributed 26 million of revenues in the quarter.
Speaker Change: We continue to see elevated levels of like new sales with over 2 billion of revenues. So far this again.
Speaker Change: Span on this at an industry level.
Speaker Change: <unk> continues to outperform U S and Europe.
Speaker Change: After all three.
Speaker Change: And.
Speaker Change: If there is something to be launched when that does gives us a signal of what is to come in other regions as customers acceptance of your vehicles.
Speaker Change: We feel that is the right strategy to build affordable and most compelling.
Speaker Change: Our focus remains on growing unit volume, while avoiding a buildup of inventory.
Speaker Change: Support this strategy continuing to offer extremely compelling winco financing options and they're good luck.
When you compare any vehicle in the lineup with other Oems.
Speaker Change: I'll wake us provide much better value, particularly when you consider the safety features or farm ins.
Speaker Change: Unbundling software folks therapies like David talked about include also what sure Ken talked about autonomy music options until controls and much more.
Speaker Change: Well, everyone equally and Atlanta consult with these capabilities. It is an awareness gap.
Speaker Change: Just with buyers and then times, even with existing holders.
Speaker Change: We plan on making these more visibility not interactions with both existing and future customers.
Speaker Change: Automotive margins improved quarter over quarter.
Speaker Change: Or is this a feature release discussed before.
Speaker Change: Increasing our oil production and delivery of London.
Speaker Change: The benefits of the marketing pricing and more localized and the reason region, which resulted in lower freight and duties.
Speaker Change: Turning these margins in Q4 power will be challenging.
Speaker Change: Given the current economic and one.
Speaker Change: Not that we are focused on the cost per Waco, and there are numerous work streams within the company to squeeze out costs without compromising the customer experience.
Speaker Change: Yes.
Speaker Change: That's a bit helpful. Hopefully helpful macro trend is if there's a decline in interest rates.
Speaker Change: As.
Speaker Change: Basketball baked on.
Speaker Change: On automotive demand.
Speaker Change: The vast vast majority of people in it.
Speaker Change: The demand is driven by the milestone payment connect what multiple payments so.
Speaker Change: I think most likely we will see continued decline in interest rates, which helps with the affordability of vehicles.
Speaker Change: That is one time material observed in the industry.
Speaker Change: Because of the affordability being impacted because of interest rates.
Speaker Change: People are holding onto the car slowdown, especially in the U S.
Speaker Change: And that is actually having an impact on all our investor team.
Speaker Change: As we discussed.
Speaker Change: Yeah.
Speaker Change: As we have discussed and byproducts energy deployments fluctuate quarter over quarter due to customer readiness location of bolivars being fulfilled and not necessarily an indicator of.
Speaker Change: With annual production within the quarter, while we did see a decline in Q3, we expect to grow deployments sequentially in Q4 to end the year.
Speaker Change: More than doubled.
Speaker Change: Last year.
Speaker Change: <unk> margins in Q3, Florida record of more than 30%. This is a function of mix of projects being deployed in the quarter.
Speaker Change: There will be fluctuation in margins as we manage through deployments.
Speaker Change: And on inventory.
Speaker Change: Our pipeline and backlog continued to grow quarter over quarter as we fill a 245 production slots and we're doing our level best to keep up with the demand.
Speaker Change: Just going back on the automotive margins.
Speaker Change: I talked about two sites.
Speaker Change: I talked about what is happening one other thing, which I want to also share is that.
Speaker Change: That.
Speaker Change: We will continue to keep whatever we can to excrete like I've said before about squeezing of the costs, but this is something which we also are really capable of.
Speaker Change: Just in Q3, we can see.
Speaker Change: Our lowest cost per late call. It that is a trend, which we will focus on.
Speaker Change: Yeah.
Speaker Change: Then going on to service. Another we continue to show improvements in Q3. This was losing sort of better performance. Both enough service. It will switch influenced collision parts sales and merchandise and continued coal to supercharge that.
Speaker Change: <unk> continued to grow as the overall fleet size increases.
Speaker Change: Our operating expenses declined quarter over quarter and year on year basis. This was partially due to the restructuring we undertook in Q2.
Speaker Change: Cost savings from these initiatives were partially offset by an increase in costs related to all the assets.
Speaker Change: We have started using the GPS lustre is out of our factory house and ahead of schedule.
Speaker Change: Well on track to get trimmed ticket Gpus deployed in Texas by the end of this month, one thing, which I'd like to elaborate is that we're being ready to release shares.
Speaker Change: He had compute spend too.
Speaker Change: I'm, saying, how best we can utilize the existing infrastructure filmmaking.
Speaker Change: Smoke.
Speaker Change: On the Capex front, and we hadn't worked 300 miles within in the quarter.
Speaker Change: This was a sequential increase largely because of investments in AI compute we now expect total capex for the year it could be in excess of $11 billion.
Speaker Change: We shared our vision for the future at the regional water event at the beginning of the month.
Speaker Change: Lithium is hyper focused on delivering on that ratio. The all efforts are underway to make it a reality.
Speaker Change: Well have you achieved significant progress this year it will take time to get this.
Speaker Change: As we find new and incredibly complex technologies and navigate a fragmented regulatory landscape.
Speaker Change: Future is incredibly bright.
But that's something once again for all of it.
Great. Thank you very much caught up now.
Speaker Change: And now we'll go to your Investor questions. The first one is as Tesla still on track to deliver at the more affordable model next year as mentioned by <unk> earlier, and how does it align with your AI product Road map.
Speaker Change: Sure.
Speaker Change: <unk> said he arent plan.
Speaker Change: The first half of next year, our mission has always been to lower the cost.
Speaker Change: Our vehicles to increase the adoption of a sustainable energy and transport.
Speaker Change: Part of that is lowering the cost per car vehicles, which is where.
Speaker Change: All of the.
Speaker Change: Personally owned vehicles that we sell today, Colin but the next phase and that really is it fits into AI roadmap is when we bring in robo taxis, which lowers the initial cost of.
Speaker Change: We're getting into an EV and those that's really where we see the marriages.
Speaker Change: <unk> roadmap.
Speaker Change: Yeah.
Speaker Change: Yes.
Speaker Change: It'll be like with with with incentives sub 30 K.
Speaker Change: So which is kind of a key threshold.
Speaker Change: Great. Thanks.
Speaker Change: Thank very much.
Speaker Change: Similar question next when can we expect Tesla to give us the $25000 non robot taxi regular car model.
Speaker Change: We're not breaking it on all of it.
Speaker Change: Vehicles today erosion I think we've made very clear that we're like the futures of autonomous.
Speaker Change: I mean, it can be.
Speaker Change: Alright, and Thats actually said there's been.
Speaker Change: Many years ago.
Speaker Change: Got that.
Speaker Change: My strong belief I believe that is panning out to be true.
Speaker Change: Keep very August in retrospect is that the future is autonomous and electric vehicles.
Speaker Change: And.
Speaker Change: Not autonomous gasoline vehicles, which won't be like riding a horse and using a flip phone.
Speaker Change: It's not that there are no voices, yes, there are some positives, but there are unusual.
Speaker Change: Niche.
Speaker Change: And.
Speaker Change: Yes, Sir.
Just everything is going to be electric autonomous.
Speaker Change: Yeah.
I think this was light like should be frankly, blindingly obvious at this point, but that is the future.
Speaker Change:
Speaker Change: So.
Speaker Change: A lot of automotive companies most of them run our companies have not.
Speaker Change: Internal entrants, which is surprising.
Speaker Change: Because we've really chip shouting from the rooftops for such a long time.
Speaker Change: It will accrue to their detriment in the future.
Speaker Change: Uh huh.
Speaker Change: One of our vehicles in the future we will.
Speaker Change: Yes.
Speaker Change: <unk> vehicles that.
Speaker Change: We've really made all of a 7 million vehicles vast majority.
Speaker Change: Capable of autonomy.
Speaker Change: And.
Speaker Change: We are currently making on the order of 35000 autonomous vehicles a week.
Speaker Change: If you compare that to say where he most entire fleet, it's westwood they have less than 1000 cars.
Speaker Change: If I can't week, yes, not cars look normal.
Speaker Change: Yes, they're mostly Nicole cyber truckload space.
Speaker Change: Thankfully.
Speaker Change: Look some abnormal.
Speaker Change: [laughter].
Speaker Change: And then the sight cyber cab central of our taxi.
Speaker Change: We wanted to have something a few trusted bookings I think it does look futuristic.
Speaker Change: It's worth noting with respect of the cyber cabinets.
Speaker Change: It's especially I'm just.
Speaker Change: Revolutionary vehicle design, but a revolution and vehicle manufacturing.
Is also coming with the winter.
Speaker Change: I went to cyber cab.
Speaker Change: The <unk>.
Speaker Change: Our cycle times like this.
Speaker Change: Units for her.
Speaker Change: For our.
Speaker Change: The.
Speaker Change: Cyber cap line.
Speaker Change: As.
Speaker Change: Like this this is really something special I mean listen this will be.
Speaker Change: Yeah half order of magnitude than other car manufacturing lines like if I could.
Speaker Change: Like not even the same week is what I'm, saying none of them the same way.
So.
Speaker Change: So it's.
Speaker Change: I said that several.
Speaker Change: Several years ago.
Speaker Change: Maybe the most.
Speaker Change: Hottest has been appointed coffee will be the boundary.
Speaker Change: And just like buying factory.
Speaker Change:
You can't reverse engineer factory that yeah.
Speaker Change: Yeah, it's like.
Speaker Change: And our frequency.
Speaker Change: Yes.
Speaker Change: <unk>.
Speaker Change: And so we're in a rapidly evolving I mean, Patrick technology.
Speaker Change: So.
Speaker Change:
Speaker Change: So anyway does that basically I think having a.
Speaker Change: Irregular 25 K models pointless.
Speaker Change: It would be silly like Ob completely at odds with what we believe.
Speaker Change: In this world, but matters is lowest cost per mile.
Speaker Change: The efficiency of that vehicle and that's what we've done with architects exactly in front of US It is fully considered cost per mile.
Speaker Change: That's what matters and if you try to make a car that is.
Speaker Change: Yeah.
Speaker Change: Essentially.
Speaker Change: Our hybrid manual.
Speaker Change: What amount of cards, it's not going to be as good as a dedicated.
Speaker Change: Scott.
Speaker Change: <unk>.
Speaker Change: So.
Speaker Change: Yes, our cabinets.
Speaker Change: I'm not going to have stairwells in Paris.
Speaker Change: Oh, sorry, and optimized for autonomy.
Speaker Change: No.
Speaker Change: It'll cost on the order of.
Speaker Change: Cost roughly 20 K. So it is a 25 K car.
Speaker Change: You can yogurts by one exclusive exclusively if you want.
Speaker Change: So.
Just what has to be removed.
Speaker Change: You don't need it.
Speaker Change: Great. Okay. Thank you very much.
Speaker Change: And the next question is what is Tesla doing until alleviate long wait times and service centers.
Speaker Change: So we aim on solving problems at the source so at the factory before they can even affect our customers.
Speaker Change: We believe the best services now service and yes.
Speaker Change: Don't even have the ethicon doesn't break yes, exactly as the best day don't see ending with the tests you either do it fixed.
Speaker Change: Fixed issue upstream remotely.
Speaker Change: Software.
Speaker Change: At work or at home.
<unk> Park, and we addressed this issue and we've partnered with steel lip service to make sure. We're looking at the same issues and Additionally, just in Q3 Q4 this year alone we.
Speaker Change: We have opened and will open in totaling nearly 70 locations and in North America, we significantly expand the size of each location and a double that size last year compared to this year.
Speaker Change: Yes, I think I think it was actually a lot of merit to have any.
Speaker Change: Large service centers.
Speaker Change: Because you can you can have specialization of labor.
Speaker Change: You can start to approach should be more factory like.
Speaker Change: We have dedicated lanes for particular types of service, Okay, and it's way easier for somebody to come expert and a few different types of repairs and every repair exactly this has helped us with the base that the.
Speaker Change: Heavy repairs the cog in the lane dedicated lanes for different types of repairs and so it's.
Speaker Change: And really treating it like a factory.
Speaker Change: Yes.
Speaker Change: Where it says the structure I think it certainly has a strong advantage relative to the rest of the auto industry.
Because we make the cars and we service the cars, whereas I think there's a bit of a.
Speaker Change: Conflict of interest with the dealer model and the traditional OEM and dealer model, where the drillships make most of their money on service.
Speaker Change: And so.
Speaker Change: They just incentives to reduce the servicing cost yet.
Whereas in our case, we are incentive to reduce the servicing costs, because we we carry that servicing costs.
Speaker Change: And we've got a good feedback.
Speaker Change: Cars that yeah, I think it would be.
Speaker Change: With the factory with the surface leaders together is send.
Speaker Change: The factors that field repealed added factory to see it firsthand excited by suggestions for.
Speaker Change: Manufacturing engineering on site, yes.
Speaker Change: This is a structural fundamental structural advantage of Tesla versus the rest of the the auto industry.
Speaker Change: Doing a bunch of work on the software side.
Speaker Change: Unmade diagnostics.
Speaker Change: It's hard to define what needs to be done to a car for Thomson service, but also automating all of the preparation work and aligning all the resources that are necessary in order for.
Speaker Change: <unk> be very efficiently worked off once it arrives sum of the parts of their like the leftist schedule technician schedule and like everything else would be like a partner says well I suppose what's wrong with me and tells that film so does that or any of the carnage that everything ready and event.
Speaker Change: We expect to pay on those what's wrong, yes.
Speaker Change: Okay.
Thank you.
Speaker Change: Is that a customer trying to translate the cars, telling us directly you were pulling that.
Speaker Change: Yes.
Speaker Change: Last time, you don't need to diagnose the car exactly when it arrives the card.
Speaker Change: This is like again fundamental.
Speaker Change: Technology advantage and structural advantage compared to the rest of the auto industry.
Speaker Change: It's I think it's underappreciated.
Speaker Change: What are we able to do.
Speaker Change: And Thats why im because like I said before most of our costs, except for cyber truck load to say, yes.
So people don't realize that it has so much capability.
Speaker Change: Yes.
Speaker Change: The other question.
Speaker Change: But they're not like obviously like Super futuristic.
Speaker Change: Yes.
Great. Thank.
Speaker Change: Thanks very much.
The next question is please provide an update on the SME AD what will the next stage of growth look like and when will entice students already sure. So as you we posted an earnings deck.
Speaker Change: So I think on the buildup of the solar factory.
Speaker Change: Our data factory arena and Weaver.
Speaker Change: We saw a major capital expenditures for that program.
We're on track to start pilot builds in the second half of next year with production starting the first half of 2026 and ramp really throughout the year to full production.
Speaker Change: Semi growth will largely depend on our customers' adoption of the product.
Speaker Change: I don't think we're going to be demand limited.
Speaker Change: Let's say which is greater.
Speaker Change: Because it's really a commodity of total causes.
Speaker Change: Yes exactly.
Speaker Change: We have.
Speaker Change: So kind of a ridiculous amount or the semi.
In that world, where it's about how much do I spend.
Speaker Change: Interest rates per mile. It's a no brainer.
Fundamentally if you've got somebody to work with.
Speaker Change: The fully considered cost per mile or per ton of transport.
Speaker Change: It's better than a diesel truck.
Speaker Change: Any company that doesn't adopt.
Speaker Change: Electric semi will loose.
Speaker Change: So there's a lot of subjective thing is like where do you like this are competitive.
Speaker Change: We want to start and what we want to have a beautiful semi truck, but frankly, if we were in August I won't try it wouldn't matter.
Speaker Change: And this is proving so in our fleets and Pepsi as a partner in fact, the Pepsi actually said last week nobody wants their drivers don't want to go back one step.
Speaker Change: As soon as we give anyone that the electric semi.
Speaker Change: It's like the <unk>.
Speaker Change: That's like the choice.
Speaker Change: What they want to drive yeah, yeah, that's like like.
Speaker Change: So <unk> seen it that their top drivers will that get to drive the Tesla semi.
Speaker Change: And thats it.
Speaker Change: Yes, the thing they want to try.
Speaker Change: It's super fun to drive it's also very easy to track.
Speaker Change: Usually to drive.
Speaker Change: And all of that and it's like a SaaS superb.
Speaker Change: Thank you for this.
Speaker Change: But I mean like.
Speaker Change: Like you've seen like videos of where like that they like to the electric somebody like.
Speaker Change: Can go uphill.
Yes, we can speeding past like the diesel truck leasing cars and cars.
Speaker Change: So like it's responsiveness.
Speaker Change: Yes.
Speaker Change: Florida the truck actually that's been that's a benefit not only for the driver and for the goods, but also for safety in terms of other drivers on the road, you'll get stuck behind the semi youre not quite yet.
Speaker Change: Now the situation in the homeland.
Speaker Change: How that plays into FSC, which is the second part of the question all of that sometimes have been.
Speaker Change: A couple of hundred we've deployed already and the ones that will be building next year and drought.
Speaker Change: Sure you have all the hardware and the cameras necessary to to deploy FSD and we're currently training with that small team that we have and as soon as the fleet is trained in the neural nets are up.
Speaker Change: We'll get FSC onto that platform, yes, it won't be a massive improvement in <unk>.
Speaker Change: Driver fatigue.
Speaker Change: And driver safety, we've got sort of the anti JAK mapping software.
We've got.
Speaker Change: Not to worry about your brakes overheating, if you go down the down a steep hill.
Speaker Change: We use regenerative that energy goes back into academic settings for pack.
Speaker Change: Actually when we leave bringing them, sometimes it's just like it's like radically better than entities with semi.
Speaker Change: The drivers love it.
Speaker Change: Great guys. Thank you very much. Our next question is when will Tesla incorporate X and Croc and also the Tesla vehicles.
Speaker Change: [laughter].
Speaker Change: I mean these are relatively small things.
Speaker Change: But yes it will.
Speaker Change: I think.
Speaker Change: Yeah.
We'll keep expanding.
What what is available in the car on the screen.
Speaker Change: Also improving like the browser. So like just generally can access anything you want in the car in fact for the test.
Speaker Change: Once it gets full autonomy you actually once.
Speaker Change: Fully at a system that is.
Speaker Change: You can do anything like if you want a browser internet if you wanted to.
Speaker Change:
Speaker Change: Asked ask questions. If you want to watch a movie if you wanted to play video games that you wanted to get some productivity thing you can do anything you want.
Speaker Change: And autonomous vehicle, because you don't need to drive.
Speaker Change: So that's why it's our cat's got nice big screen.
And it's a great job system. So you can watch it.
Speaker Change: What's your break movie wise, it's like bringing.
Speaker Change: So let me take a personal movie theater.
Speaker Change:
Speaker Change: Yes. This is why we've been building this functionality on a gaming to the car.
These and other all sorts of different media applications of the car because.
Speaker Change: Because if thats, what youre going to yes, there'll be built today theres something funded Gamespot away purely haven't tried it is like a castle doing bad in Port hope you're in a bunch of really fun games in the car.
Speaker Change: We're constantly looking at what features to add managed and we're paying attention to what's most commonly requested by our customers.
Speaker Change: Castle been bad Youre underwriting.
Speaker Change: Yes.
Great.
Thank you guys very much. The next question is Elon mentioned unsupervised FSD in California, and Texas next year.
Speaker Change: Does that mean regulators have agreed to it and the entire state for existing hardware three important vehicles.
Speaker Change: No.
Speaker Change: As I said earlier.
Speaker Change: He loves regulation.
Speaker Change: Have a pathway.
Speaker Change: I mean, theres a path or obviously whammo operates in California. So there's just a lot of forms spot a lot of approvals that are required.
Speaker Change: Hum.
Speaker Change: I mean I'd be shocked if we don't get approved next year, but it's it's just not something we totally control.
Speaker Change: I think we will get approval next year.
In California, and Texas and in.
Speaker Change: And towards the Aviary will branch out.
Speaker Change: And California and Texas.
Speaker Change: It's important to reiterate the slate.
Speaker Change: Given you're certifying a vehicle at the federal level in the U S is done by meeting F&B assess regulations.
Speaker Change: He calls today that are produced there it's almost capable meet all those regulations the cider category as the regulations and so the deployment of the vehicle to grow there's no limitation is the limitation is what you said at the state level.
Speaker Change: Are they control autonomous vehicle deployment associates are relatively easier to administer protections, yes, it's otherwise had halfway it's like California that may take a little longer to other ones haven't set up anything yet so we will work state by state.
Speaker Change: Do you think we should have a federal.
Speaker Change: Great.
Speaker Change: <unk> should be approved because there should be should be possible to Congress, if youre listening, let's get a federal aid this should be a federal the federal approval process for autonomous vehicles.
Speaker Change: That's how the F&B access is starting to work its federal mogul motor vehicle.
Speaker Change: F&B F&B assesses federal yeah, So I mean in.
Speaker Change: In 2017 and 18.
Speaker Change: Regulators started looking at it it's really kind of stalled since then but we would appreciate it.
Speaker Change: Supporting and helping out with it.
Speaker Change: It needs to be not I'd like at National approval is important.
Speaker Change: It doesn't pompano governor efficiency.
Speaker Change: Try and help make that happen and you took for everyone not just has bittersweet.
Speaker Change: But.
Just.
So I'd like some some things in the U S. Our state by state regulated like for example insurance like are incredibly painful to do it state by state or two states.
Speaker Change: And I think we should have this should be a natural approval process for autonomy.
Speaker Change: Oh, okay.
Speaker Change: Great. Thanks.
Speaker Change: And our next question is what is the plan for 2025.
I mean can we just talk.
Speaker Change: I mean, basically we talked with them, there's a lot going on even already mentioned that we're working on the cheaper models.
To come out there.
Speaker Change: Well of course, the team is doing to get the factories ready today to try and make that happen.
Speaker Change: The amount of work required to make a lower cost car is insanely high.
Speaker Change: But it is harder to get like 20% of the cost out of a car than it is to it.
Speaker Change: Design of the car and building entire factory in the first place.
Speaker Change: It's like excruciating.
Speaker Change: And.
Speaker Change: There's not a lot of movies made about.
Speaker Change: The heroes, who are about 20% of cost out of the car.
Speaker Change: I can tell you this should be.
Thank you that helps us if we can go ahead that is euro.
Speaker Change: Little change isn't as it sounds I guess, yes.
Speaker Change: You could hear it was about 20% cost out of their cars like damn hard with respect to empty movie.
Speaker Change: It's like.
Speaker Change: I think you probably could make a compelling movie, but it does.
Speaker Change: Like if you actually saw on harder if people actually saw Harlow, which do that you'd be like Wow, that's Denmark.
Speaker Change: Just yesterday, we were talking about party.
Speaker Change: I mean honestly like literally.
Speaker Change: I mean, they are a little bit.
Speaker Change: There's a lot of.
Speaker Change: But I do call it sort of like getting cost of things, it's kind of like it's like a penny. So it's like game of Thrones, but finished.
Speaker Change: First approximation executive you've got 10000 items.
Speaker Change: In a current very rough approximation and eastern cost $4. Then you have a 40 vessel telecom.
Speaker Change: So if you want to make a.
Speaker Change: $35000 car, you've got to get 50 on average out of a 10000 items.
Speaker Change: Yes.
Speaker Change: And then obviously the best as you delete some parts and bankers down do we have a lot of parts.
Speaker Change: Yeah.
Speaker Change: Im very excited about the salary cap.
Speaker Change: Design.
Speaker Change: But how we're rethinking.
Rethinking the design of a car from cyber kind of designing a bulk of that volume production and then design a machine that builds the machine.
Speaker Change: But I think it's also a revolutionary and it's just.
Speaker Change: But there is no other car company that's even.
Trying to do what we're doing like I've, even heard of it actually in fact I'm certain there isn't one.
Speaker Change: Okay.
Speaker Change: But I think this.
Speaker Change: Your machine that both the machine and that gets.
Speaker Change: And hence inherent.
It's.
Speaker Change: Designed to be like.
Speaker Change: Yeah.
Speaker Change: At five five times better than.
Speaker Change: Traditional factory.
Speaker Change: Cycle time, the cycle time, and like part deletion, which everyone I don't think any other company has the.
Speaker Change: The same level of WIC and accretion of thought that we have when it comes to like when you design apart from a white sheet of paper who's going to make it where does it because he made how is it going to be shipped how is it going to be assembled into the vehicle Emerald at any one point if something is done in a silo.
Speaker Change: It becomes a bottleneck of either cost or time of efficiency, but with a.
Speaker Change: <unk> taxi.
Speaker Change: Development language.
Speaker Change: Okay Jonathan.
Speaker Change: Yes.
Speaker Change: And then like blowing up how it's made in saying that should be made this way and rethinking. It also it's the most efficient factory possible that shows there it will sit with our capex efficiency when we deploy it shows it shows a statistical vehicle, but also have performance in terms of like end user state.
Speaker Change: Just to close out just on the energy for adults 25, we would have started when factoring out the language that Shanghai.
Speaker Change: We will continue to increase our storage upon which that follow <unk>. We plan to continue expanding our supercharging that one getting more Oems on that was 46% in that some of that as you are talking about.
Keep going and then there's the Florida.
Speaker Change: Also we'll have two refinery starting to produce so theres a lot which is great.
Speaker Change: Yes, so many things.
Speaker Change: Great like Crazy things like tells US winning basically up on almost every single thing we're doing.
Speaker Change: If you're not running now we're on track one.
Speaker Change: Greenness, where their entire large companies that that's the only thing they do.
Speaker Change: Okay.
Speaker Change: It's a company there's multiple companies within the tilda.
Speaker Change: Like many companies being one.
Speaker Change: That's it thank you guys.
Just a few more.
Speaker Change: What is going on the Tesla roadster.
Speaker Change: Some things.
I'd like to thank our long suffering.
Deposit holders of the Tesla roadster.
Speaker Change: The reason it hasn't come out yet is because it is but is it.
Speaker Change: Most of US know not just icing on the cake its the cherry on the icing on the cake and so.
Speaker Change: Our our larger mission is to accelerate the progress towards a sustainable energy future.
Try to do things that maximize the probably the future is good.
Speaker Change: Humanity in Perth.
Speaker Change: And and.
Speaker Change: And so that necessarily means that like the.
Speaker Change: Things like that I can lines dessert, we'd like we'd all love to work on the tiller.
Speaker Change: Nextgen Texel Rosary soon it is Super fund and we are working on it but it has to come behind them the more.
Speaker Change: Thanks, and have a more serious impact on the grid at the world.
So just thank you to all level are suffering.
Speaker Change: The rest of our deposit holders.
Speaker Change: And we are actually finally, Mr progress on that.
Speaker Change: And we're we're close to finalizing the design on it.
Speaker Change: It's really going to be.
Speaker Change: Nothing spectacular.
Speaker Change: Okay.
Peter Hill: Peter Hill.
Peter Hill: Yes.
Peter Hill: Good way computer till now rivals what we're really good friends.
Peter Hill: Yes.
Speaker Change: Peter It was lamenting how the future doesn't have flying cars.
Peter Hill: We'll see.
Peter Hill: More to come.
Peter Hill: Great.
Peter Hill: Thank you very much.
Speaker Change: The next one is quite similar to other questions. He's had sudden I combine it with the final question and so briefly could you just detail at Halliburton taxi will rollout will it start with a test of the <unk> fleet and then allow customers.
Speaker Change: To add there is on the subscription model and the hardware really capable of all find interesting.
Speaker Change: Is it getting the hardware.
Speaker Change: When we solve expanded our fiber it was easier to make rapid progress with starting with <unk> and for getting on the solution and then back putting into 100 instead of directly working on 100 feet given that hardware for us.
Speaker Change: The fundamental hardware capabilities.
Speaker Change: I think that trend will continue.
Into the next few.
Speaker Change: Owners ask other battery phosphate on solutions rapidly.
Speaker Change: And then back put it behind us and just takes longer to none of those things because at some fundamentally supported in the hardware.
Speaker Change: Emulated.
Speaker Change: Yes.
Speaker Change: Michelle need working on Evercore back putting it to 130.
Speaker Change: Yes.
Speaker Change: We're not we're not 100% sure.
Speaker Change: But.
Speaker Change: But.
Speaker Change: As Chuck mentioned.
Speaker Change:
Speaker Change: Because by my.
Speaker Change: By some measures soccer for has really.
Speaker Change: Several times the capability of harbor, three it's easier to get things to work with vulnerable.
Speaker Change: And then it takes.
Speaker Change: A lot of effort to sort of squeeze that functionality into the hardware three.
Speaker Change:
Speaker Change: And.
Speaker Change: Yes.
Speaker Change: There's some chance.
Congress III does not achieve the safety level that.
Speaker Change: It allows for unsupervised FSD.
Okay.
Speaker Change: So there was some change to that and if that turns out to be the case, we will upgrade and dose group.
Speaker Change: Hardwood <unk> MSC for free.
Speaker Change: And we have designed this system to be.
Speaker Change: Upgradable.
Speaker Change: And it's really it's really worth it.
Speaker Change: Uh huh.
Speaker Change: Just to sort of switch out the computer time okay.
Speaker Change: The camera at the cameras are.
Speaker Change: Okay.
Speaker Change: We don't we don't actually know the assets back, but if it does turn out.
Speaker Change: We will take we'll make sure we take care of those who bought MST on Coventry.
Speaker Change: Great.
In the last few minutes that we have left we will try to get as an analyst questions.
Speaker Change: First question will be coming from peer Feraheme at New Street, and Pierre Please feel free to Unmeet yourself.
Speaker Change: Thanks for that guys for taking my question.
Peer Feraheme: I was wondering about like the computes Johan Youre ramping up so you gave like a interesting statistics on how much you have and you said you you don't see your compute constrained.
Peer Feraheme: And I was wondering you know how you are putting to work is this additional compute.
Peer Feraheme: Is that a game for you are creating like larger and larger mothers like next generation of meadows at la.
Peer Feraheme: Jos away open AI go from GPT three to GBP four.
Peer Feraheme: Or is that more like you're all set on the Armada and you need to throw more and more compute to accelerate the pace of learning to improve.
Reliability.
Speaker Change: And then I had a quick follow up real quick on you of what I would think it takes us.
Peer Feraheme: In California next year.
Peer Feraheme: And as you see today.
Peer Feraheme: Easy to rollout like with can you talk to.
Peer Feraheme: Cal that will start with like a supervisory.
Peer Feraheme: Nexon unbuilt shipyard <unk> someone sitting at a win just in case and removing the supervisors progressively or are you aiming foregoing.
Fully fledged without even a human supervised out when you get started.
Peer Feraheme: Okay, well I guess regard.
Peer Feraheme: Okay.
Peer Feraheme: The first part of the question being the nature of rewards is different from all of them.
Peer Feraheme: And that you have a massive amount of context, so that like the beat.
Peer Feraheme: You got to Kiss, a Tesla summary cameras.
Peer Feraheme: That mine.
Peer Feraheme: <unk> Tonight. If you include internal camera that.
Peer Feraheme: You bet.
Gigabytes of context.
Peer Feraheme: And that is then distilled down into a small number of controle output.
Peer Feraheme: Whereas it's like you normally it's very rare to have effect.
Speaker Change: Was there any element there gigabytes of context.
Speaker Change: And then you've got you've got within process that in the car with.
Speaker Change: Very small amount of compute power.
Speaker Change: So.
Speaker Change:
Speaker Change: Yes.
Speaker Change: It's all doable and it's happening, but it is a different problem then.
Speaker Change: Then what say a gemini or would okay and he is doing.
Speaker Change: <unk>.
Speaker Change: And.
Speaker Change: Now part of the way you can make up for the fact that the computer is.
Speaker Change: <unk>.
Speaker Change: Quite small.
By spending a lot of effort on training.
Speaker Change:
Speaker Change: And just like just like a human like the more you train on something less.
Speaker Change:
Speaker Change: So unless metal workload. It takes when you try to point when you when you do it.
Speaker Change: The first time like a human sauce driving that absorbs.
Speaker Change: You're a whole mind.
Speaker Change: And then.
Speaker Change: Train more and more on driving different good and you.
Speaker Change: The driving commerce becomes background task doesn't it.
Speaker Change: Only absorbs the small amount of your metal capacity, because a lot of training.
Speaker Change: So we can make up for the fact that the inference computers.
Speaker Change: It's it's tiny compared to.
Speaker Change: A 10 kilowatt bank of Gpus.
Speaker Change: We've got a few hundred watts.
Speaker Change: Referring to compute we can make up that puts.
Speaker Change: Heavy training.
Speaker Change: <unk>.
Speaker Change: So.
Speaker Change: Yeah that's.
Speaker Change: And then but then there's also the vast amounts but the actual.
Speaker Change: Petabytes of data coming in.
Speaker Change: <unk>.
Speaker Change: And then sorting out what training is important.
Speaker Change: Of the vast amounts of video training.
A video data coming fleet what.
Speaker Change: What is actually the most important for training.
Speaker Change: Vessels.
Speaker Change: Difficult.
Speaker Change:
Speaker Change: But as I said.
Speaker Change: We're not currently training compute constrained.
Speaker Change: I'm not sure if you want to leverage.
Speaker Change: Yes.
Thank you mentioned the training has what's been lost in wireless also trained quicker.
Speaker Change: But in the end, we still got a big risk models are performing better so the validation effort picking the models might spend you mentioned this.
Speaker Change: Pretty large sphere to drive a lot of mindset going close to.
Speaker Change: We do have simulation and other ways to get those metrics and those two have been.
Speaker Change: And that's the big bottleneck.
Speaker Change: Yeah.
Speaker Change: Okay. That's why you are not draining compare constraint alone and there's other Microsoft scanning as well, which is a data figuring out if we start asking more useful.
Speaker Change: That is an important testing we're focusing on that.
Hey, Dan.
Speaker Change: So as it relates to the second part of your question here about 60 drivers of rolling it out each day has different requirements.
Speaker Change: In terms of how many miles and how much time, you need to have the safety driver and not have to say, we're going to follow all those binoculars violate would've regulations are out there safety is a priority, but it goes obviously it wasn't already and safety is there will be more of a drag from them from the rideshare credit.
I mean I guess.
Speaker Change: We think that we'll be able to have travel is tesla's.
Speaker Change: During paid rates next year.
Speaker Change: So tony's here.
Speaker Change: Alright, thank you.
Speaker Change: And our next question comes from Adam Jonas at Morgan Stanley Adam Please feel free to unseat yourself.
Adam Jonas: Okay. Thanks, everybody just had a question about the relationship.
Adam Jonas: Between Tesla and X AI.
Adam Jonas: Many investors are still not clear how the work it actually I is truly beneficial to Tesla some even take the view that the two companies may even be in competition with each other in terms of talent intact and even your time Ilan. So what's your message to investors on that relationship between Tesla and where do you see it going over time.
Adam Jonas: Thanks.
Adam Jonas: Yeah.
Adam Jonas: Well I should say that <unk> has been <unk>.
Adam Jonas: To test the AI.
Adam Jonas: Quite.
Adam Jonas: Quite a few times in terms of SKU.
Adam Jonas: Scaling up.
Adam Jonas: Training.
Just recently.
Adam Jonas: Recently in the last week or so.
Adam Jonas: Vincent.
Adam Jonas: While foreign training.
Adam Jonas: Is there any big training one.
Adam Jonas: And note fails.
Adam Jonas: Being able to continue training and.
Adam Jonas: Okay.
Adam Jonas: If they recover from train one exchange, but pretty helpful.
So.
Adam Jonas: But there are different problems.
Adam Jonas: He is working on artificial general intelligence or unfair Super intelligence.
Adam Jonas:
Adam Jonas: Tesla is trying to make autonomous cars and autonomous robots.
Adam Jonas: <unk>.
Adam Jonas: They are different rounds.
So.
Speaker Change: Yeah I mean.
Speaker Change: I think we have centers before also leg on not all the eyes equal right.
Speaker Change: As a broad spectrum and we have our own citizens is there are certain things, which we can collaborate on if needed but for the most part we're slugging different issues.
Yes, it does it tell us.
Speaker Change: Focused on real World Dan.
Speaker Change: Got.
Speaker Change: It is quite a bit different from.
Speaker Change: Hello.
Speaker Change:
Speaker Change: Yes.
Speaker Change: Massive context for video.
What are you.
Speaker Change: That's going to be sold right.
Speaker Change: Alright.
Extremely efficient advanced compute.
Speaker Change: Okay.
All right.
Speaker Change: Do think tells us.
Speaker Change: The most efficient.
Speaker Change: In the world.
Speaker Change: Terms of the parents computer because average necessity.
Speaker Change: We have to.
Speaker Change: We have to be very good at it.
Speaker Change: Efficient and firms.
Yes.
Speaker Change: We can't pretend to 10 kilowatts of Gpus in the car.
We've got a couple of hundred watts.
Speaker Change: Sandra.
Speaker Change: So it's pretty well designed.
Speaker Change: Hi, Joe.
Speaker Change: But it's still a couple hundred ones.
Speaker Change:
Speaker Change: But there are different problems.
Speaker Change: Yeah.
Speaker Change: I think it will boost or something and it's like when I was running it burns.
Speaker Change: It is running.
Speaker Change: And answered questions answering.
Speaker Change: Questions on a 10 kilowatt Iraq.
Speaker Change: It's like.
Speaker Change: And put that in the car.
Speaker Change: No no.
Speaker Change: Exactly.
Speaker Change:
Speaker Change: So.
Speaker Change: Actually I, just because I felt it wasn't.
Speaker Change: There wasn't a truth seeking.
Speaker Change: Digital and superintendents company out there when it came down to continue to be a true seek it looked like.
In an AI company that is very rigorous.
Speaker Change: Bank reform.
Speaker Change: I'm, not saying exactly perfect.
Speaker Change: Dennis.
Speaker Change: Explosive aspiration.
Speaker Change: Even if something as well.
Speaker Change: Quickly correct interests will be fruitful.
Speaker Change: I think this is very important for safety.
Speaker Change: <unk>.
Speaker Change: Hey, Ryan.
Speaker Change: Actually I will.
Speaker Change: That has been helpful to Tesla and we will continue to be helped to Tesla, but they're all very different problems.
Speaker Change:
Speaker Change: Great.
Speaker Change: I keep thinking like like what it is.
Speaker Change: Like what are the car company has it has a world class chip design team.
Speaker Change: Zero.
Speaker Change: What are the car company is a world class team like tests it is zero.
Speaker Change: Those will all start ups, they're created from scratch.
Speaker Change: Great. Thank you Elon and I think thats. Unfortunately, all the time that we have for today and we appreciate all of your questions and we look forward again for you next quarter. Thank you very much and goodbye.
Speaker Change: [music].
Speaker Change: Yes.
Speaker Change: Okay.