Q1 2025 Tesla Inc Earnings Call
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Speaker Change: Good afternoon, everyone and welcome to Tesla's first quarter 2025, Q&A webcast. My name is <unk> head of Investor Relations and I'm joined today by Elon Musk thereabouts in Asia, and a number of other executives Q.
Speaker Change: Q1 results were announced at about three P. M Central time in the update that you published at the same thing as it is about cost.
Speaker Change: During this call we will discuss our business outlook and make forward looking statements. These comments are based on our predictions and expectations as of today.
Speaker Change: Cool events or results could differ materially to a number and due to a number of risks and uncertainties, including those mentioned in our most recent filings with the SEC.
Speaker Change: During the question and answer portion of today's call. Please limit yourself to one question and one follow up please use the raise hand button to join the question queue.
Elon Musk: Before we jump into Q&A Elon will be providing an update.
Elon Musk: Hello, everyone well its never a dull moment these days.
Elon Musk: Well thanks for sure every day is going to be exciting.
Elon Musk:
Elon Musk: As people know there's been some blowback for.
Elon Musk: Spending in government.
Elon Musk: And our governor efficiency with dose.
Elon Musk: I think the work that we're doing there is actually very important for us.
Elon Musk: On a spring in the same depths.
Elon Musk: Our country United States to destruction.
Elon Musk: And our team has made a lot of progress in addressing waste and fraud.
Elon Musk: So the natural blow back from that as those who were receiving the wasteful dollars. Unfortunately.
Well.
Elon Musk: Try to attack.
Speaker Change: Me and our team and anything associated with me, So and then maybe one for <unk>.
Speaker Change: Should we just let the waves from Ford continue.
Elon Musk: Yeah.
Elon Musk: And it was continuing to grow at an unsustainable pace.
Elon Musk: That was bankrupt in country.
Elon Musk: Or to fight the waste before.
Elon Musk: And try to get the country back on the right track.
Elon Musk: I believe.
Elon Musk: So I think there is two five.
Elon Musk: The way support.
Elon Musk: Thank you I'll get back in the right track.
Elon Musk: Together with the President Trump administration.
Elon Musk: Because of further shifting of America goes down we will go down with it.
Elon Musk: Tesla and everyone else.
Elon Musk: No.
Elon Musk: I think this is the critical work.
Elon Musk: The purchase that you'll see out there theyre very organized they are paid for.
Elon Musk:
Elon Musk: There are obviously not going to.
Elon Musk: That's the reason that they are purchasing is because theyre receiving fortunate money.
Elon Musk: Or.
Speaker Change: Recipients of wasteful largesse.
Elon Musk: Yes.
They're going to come up with some other reason.
Elon Musk: But that is the real reason for the protests the actual reason.
Elon Musk: Yes.
Steven: Steven the way some floor, we're still continuous to receiving that.
Elon Musk: That is the real thing that's going on here obviously.
Steven: So.
Steven: Now that said I do think is.
Steven: The.
Steven: But the large slug of work necessary to get the Soc team in place and.
Steven: And then the government too.
Steven: Get the financial House in order.
Steven: Is mostly done.
Steven: And I think.
Steven: Good.
Steven: Starting.
Steven: Yeah.
Thanks Bond.
Steven: Okay.
Steven: My time allocation.
Steven: Those will drop significantly.
Steven: I will have to continue doing it Paul I.
Steven: Thank you.
Steven: The remainder of the present time.
Steven: Just to make sure that the waste and fraud that we stopped does not come roaring back.
Steven: We will do it.
Steven: As the chance.
Steven: So.
Steven: So I think well continue to spend.
Steven: Good day or two a week.
Steven: <unk>.
Steven: Government matters.
Steven: As long as the President would like me to do so.
And as long as it is useful.
Steven: But starting next month.
Steven: King.
Steven: Far more of my time to Tesla.
Steven: <unk>.
Steven: Now that.
Steven: Major work of establishing the department of government efficiency is done.
Steven: So.
Steven: It tells me we've gone through.
Steven: Many many places over the years.
Steven: Yes.
Steven: And actually been through many many.
Steven: Many of the ADESA experiences.
Steven: We're probably we're and they're happy to answer that please.
Steven: Please.
Steven: And maybe it doesn't times.
Steven: So many times.
Steven: This is not one of those times for novel negative.
Steven: Not even close.
Steven:
Steven: So.
Steven: There are some challenges.
Steven: And I expect that this year will be.
Steven: It will probably be some unexpected bumps this year.
Steven: Okay.
Steven: We remain extremely optimistic about the future of the company.
Steven:
Steven: The future of the company is fundamentally based on.
Steven: Large scale autonomous cars.
Bob: And Bob.
Bob: Large scale and large volume vast numbers of autonomous humanoid robots.
Bob: No.
Okay.
Bob: The value of the company that.
Bob: Truly useful autonomous humanoid robots and autonomous.
Bob: Useful vehicles at scale at low cost, which is hotels is going to do.
Bob: Yes.
Bob: Staggering.
Bob: I continue to believe that Tesla.
Yes.
Bob: Excellent execution will be the most valuable company in the world by far.
Bob: So that's an important area, we must execute well.
Bob: Okay.
Bob: Okay.
Bob: We do execute well.
Elon Musk: I think testing will be the most valuable company in the world by far.
Bob: As valuable as next five companies combined.
Bob: So.
Bob: Hi.
Bob: But there'll be a few bumps along the road before before that happens.
Bob: I said I think the last earnings call.
Bob: No.
Bob: We'll start to see.
Bob: <unk>.
Bob: Steve.
Bob: Prosperity of autonomy.
Bob: Take us back in a material way around the middle of next year. We expect we expect to have it be selling fully autonomous rides in June in Austin is as we've been.
Bob: <unk> been saying for now several months so that's continued but.
Bob: The real question from financial standpoint, when does it.
Bob: Really become material and affect the bottom line of the company.
Bob: I can start to.
Bob: To be a fundamental.
Bob: Part of the above.
Bob: <unk>.
Bob: Yes.
Does it move to the financial needle in a significant way that's probably.
Bob: Around the middle of next year second half of next year.
Bob: And then once the desktop move that.
Bob: Significant way it will really go exponentially from there.
Bob: So.
Bob: Yes.
Bob: I encourage people to look beyond like the.
Bob: Yes.
Bob: Some bumps and potholes.
Bob: All of these.
Bob: Robert immediately ahead of us.
Bob: Okay.
Bob: Left you guys to be.
Bob: Bright shining.
Bob: Okay.
Bob: So development Hill.
Bob: Reaganesque imagery.
Bob: <unk>.
Bob: And.
Bob: That's where we're headed.
Bob: Lastly, it doesn't to your flagship.
Bob: And the next year or so.
Bob: Hello.
Bob: Okay.
Bob: Yes.
Bob: With respect to supply chain risks.
Speaker Change: That's me it sounds like it's been working on for several years is to localize supply chains.
Speaker Change: This is actually makes sense from a cost standpoint from a and promote logistics risk standpoint.
Speaker Change:
Speaker Change: Is to have the supply chain is to be at least located on the continent.
Speaker Change: <unk> is built.
Speaker Change: And so we are.
Speaker Change: I think the least.
Accompanying the least affected car company.
Speaker Change: With risk with respect to tariffs.
Speaker Change: At least in most respects I mean, it remains to be seen.
Speaker Change: Now no tariffs at all.
Speaker Change: Yes tough on a company wide margins are still low.
Speaker Change: Sure.
Speaker Change: Right.
Speaker Change: We do have localized supply chains in North America, Europe, and China. So.
Speaker Change: Okay.
Speaker Change: That puts us in a stronger position than any of our competitors.
Speaker Change: Yes.
Speaker Change: Okay.
Speaker Change: Yeah.
Speaker Change: And undoubtedly I'm going to get a lot of questions about tariffs.
Speaker Change: I just wanted to emphasize that.
Speaker Change: The tariff decision is entirely up to the president of United States.
Speaker Change: I will begin with my advice with President rich.
Speaker Change: If you listen to my advice, but then it's up to you and of course to make this decision.
Speaker Change: I've been on record many times, saying that I believe lower tariffs are generally a good idea.
Speaker Change: For prosperity.
Speaker Change: But this decision is fundamentally up to be elected representative of the people being competitive in the United States. So.
I'll continue to advocate for.
Speaker Change: Lower tariffs rather than higher tariffs.
Speaker Change: That's all I can do.
Speaker Change: No.
Speaker Change: Now, let me walk you through why I'm, so excited about the future of Tesla.
Speaker Change: So first of all autonomy the team and I are laser focused on brain robot taxi to Austin in June.
Speaker Change: As you play, it's a tiny little twist as all four.
Speaker Change: For model y.
Speaker Change:
Speaker Change: And Austin.
Speaker Change: And then.
Speaker Change: It actually should parse out the terms.
<unk> taxi or robo taxi and just generally like what's the cyber cat because we've got a product called the salary cap and then but any any.
Speaker Change: Tesla way, which could be an S. Three extra why that is autonomous is a robotic texting while Robert Jackson is a confusing.
Speaker Change: So.
Speaker Change: The vast majority of it.
Speaker Change: Tesla fleet that we've made is capable of being a robot taxis robotic texting.
Speaker Change: <unk>.
Speaker Change: And as we go from there.
Speaker Change: Great.
Speaker Change: Once we can make.
Speaker Change: The system work, where you have paid rides fully autonomous fleet with no one in the car.
Speaker Change: One city.
Speaker Change: That is a very scalable thing for us to go broadly within.
Speaker Change: Whatever jurisdiction allows us to operate.
Speaker Change: Because what we're solving for is a general solution to autonomy.
Speaker Change: Not a city specific solution for autonomy.
Speaker Change: Once we make it work in a few cities, we can basically make it work in all cities and that.
Speaker Change: And that.
Speaker Change: Legal jurisdiction. So if its once we can make it work in a few cities in America, we can make it work anywhere in America.
Speaker Change: Great work.
Speaker Change: Two cities in China look anywhere in China like Western Europe.
Speaker Change: Limited only by our regulatory approvals.
Speaker Change:
Speaker Change: So this is the advantage of having a generalized solution.
Speaker Change: Using artificial intelligence.
Speaker Change: Yeah.
Speaker Change: Sure.
Speaker Change: Tesla designed specifically for this purpose.
Speaker Change: As opposed to very expensive sensors.
Speaker Change: And high precision maps on a particular neighborhood where that neighborhood may change.
Speaker Change: And changes and then the cost of stops working so.
Speaker Change: Oral solution instead of a specific solution.
Speaker Change: Okay.
Speaker Change: <unk>.
Speaker Change: And.
Speaker Change: With regards to autonomous.
Speaker Change: Good progress not Smith.
Speaker Change: We expect to have.
Speaker Change: Yes.
Speaker Change: Thousands of.
Speaker Change: Oh, Optimus robots working in Tulsa factories by the end of this year.
Speaker Change: And use more.
Speaker Change:
Speaker Change: And.
Speaker Change: We expect to scale optimists.
Speaker Change: Faster than any product I think in history.
Speaker Change: To get to millions of units per year.
Speaker Change: As soon as possible I think.
Speaker Change: So confident.
Speaker Change: Two.
I'm going to use per year and less than five years.
Speaker Change: Maybe four years.
Speaker Change: So.
Speaker Change: Alright.
Speaker Change: Okay.
Speaker Change: 'twenty three I feel confident in predicting a million office units per year.
Speaker Change: And it might be 2029.
Speaker Change: So.
Speaker Change: Let's see with respect to energy energy business is doing very well.
Speaker Change: The Mega pack is.
Speaker Change: Yes.
Speaker Change: It enables.
Speaker Change: Utility companies to output far more total energy than would otherwise be the case.
Speaker Change: When you think it would be.
Speaker Change: The energy capability for grid.
Speaker Change: It's much it's much more than.
Speaker Change: It takes a total energy output per year.
Speaker Change: Okay.
Speaker Change: Power plants could operate at peak power.
Speaker Change: For.
Speaker Change: All 24 hours as opposed to being at half power, sometimes quarter power at night.
Speaker Change: Then you could double the energy output.
Speaker Change: Of existing power plants.
Speaker Change: And in order to do that you need to buffer the Angie.
Speaker Change: So that you can charge up to something like battery pack of mines and the discharge to grant during the day.
Speaker Change: So.
Speaker Change: This is a.
Speaker Change: Massive unlock on total.
Speaker Change: Energy output of any given grid.
Speaker Change: And over the course of the year.
Speaker Change: And utility companies are beginning to realize those and are buying bigger packs and scale.
Speaker Change: So at this point.
Speaker Change: Gigawatt class factory is.
Speaker Change: Quite a comtech.
Speaker Change: Many orders in the Hopper will gigawatt and beyond.
Speaker Change: Ares.
Speaker Change: And we expect the energy the stationary energy storage business to scale ultimately to Terawatts.
Speaker Change: So very very good numbers.
Speaker Change: Q1 <unk>.
Speaker Change: First quarter of a year or so.
Speaker Change: Or is it pretty tricky.
Speaker Change: Because usually the worst part of the year because people.
Speaker Change: Don't want to go buy a car in the middle of winter drink it wasn't so.
Speaker Change:
Speaker Change: And so we picked Q1.
A good quarter to do.
Speaker Change: Great.
Speaker Change: Our cutover to the new version of the model Y and retail production.
Speaker Change: Off the world's best selling cost worth remembering that model is the best selling part any kind on earth.
With $1 1 billion unit output.
Speaker Change: <unk> models.
Speaker Change: And we did this changeover at the same time in.
Speaker Change: And factories all across the world.
Speaker Change: Congratulations but hasn't team on an amazing job in pulling off what is a very difficult transition.
Speaker Change: So yes it is.
Speaker Change: It's really very impressive work.
Speaker Change: So.
Speaker Change: Yes.
Speaker Change: In conclusion, while there are many nib some headwinds for us in the broader industry the future for Tesla.
Speaker Change: Never.
Speaker Change: Goodbye.
Speaker Change: <unk> is delivering sustainable abundance within our affordable AI talent robots.
Speaker Change: So.
Speaker Change: This outcome.
Speaker Change: Length of sprays.
Speaker Change: Sustainable abundance ruled.
Speaker Change: Have you seen like what's the ideal future that you can imagine.
Speaker Change: That's what you'd want you'd want a balance for all.
Speaker Change: Whether it's sustainable.
Speaker Change: It's good for the environment.
Speaker Change: This is the happy future.
Speaker Change: What's the happiest future you can imagine.
Speaker Change: One which is that will be a huge weather sustainable abundance rule.
Speaker Change: Closest thing to have and we can get on it basically.
Speaker Change: So thank you again to the test team for.
Speaker Change: Although our efforts.
Speaker Change: In this challenging time.
Speaker Change: And look forward to continuing to lead the team.
Speaker Change: Two.
Speaker Change: We had success and engagement.
Speaker Change: Great. Thank you very much Elon and before being born that Bob has some opening remarks.
Speaker Change: As Ilan mentioned in Q1, we achieved something which has now been undertaken in the automotive industry off I'm keeping all our factories are best Southern Guy who was an insane.
Speaker Change: And this is this.
Speaker Change: I understand this is not a small feat.
Speaker Change: Okay.
Speaker Change: I'm not aware of anybody else being able to do the best I think Carl I'll, let ones within the quarter and that's hitting all the documents, which we had established at the beginning so big kudos.
Speaker Change: Kudos to the team for making this happen.
Speaker Change: Additionally, we also hit.
Speaker Change: Record gross profit by Lindsay storage business and the bottom.
Speaker Change: Now getting back into the business Theres been a lot speculation as to the reasons for decline of all Lincoln deliveries in the first quarter.
Speaker Change: We had previously guided that we will be updating all factories and this will lead to several weeks of lost production.
Speaker Change: Please did happen.
Speaker Change: They've been in fact, all contained as not having enough new model Y available in most markets for people to see and experience till the last few weeks of the quarter.
Speaker Change: Additionally, the negative impact of vandalism and unwanted hostile to us of that and our team had an impact in certain markets. Despite this we were able to sell all legacy model Y in U S. China and a few other markets within the book.
And again.
Speaker Change: Just so people understand we will producing the legacy model y to middle to end of February and we switched over and we were able to still sell out within that period, So again big achievement.
Speaker Change: Since people at Tesla can make it happen.
Speaker Change: We've been extremely we have away extremely competitive Lincoln lineup, which with most blancos going to a recent update.
Speaker Change: I have to Dent F. Once an SSD you Havent, Barcelona shortfall, which can take you almost anywhere under supervision.
Speaker Change: Numerous stories shared by our customers ranging from how it is indeed their daily commute.
Speaker Change: Providing mobility customers with disabilities.
Speaker Change: Given all of the customers the ability to travel confidently and independently.
Speaker Change: Only an intensity supervised Samsung and the human driver just pause to improving the lives of individuals with speeds and again this is something.
Speaker Change: We have the experience.
Speaker Change: And anybody who has an experience.
Speaker Change: Yes no.
Speaker Change: We've been doing a lot lately.
Speaker Change: And get those stories out at least on X. So that people can see how other people have benefited from this.
Speaker Change: Now coming into the financial stuff.
Speaker Change: Although margins declined sequentially, primarily due to the reduction in the total number of them at least lower fixed cost absorption.
Speaker Change: Due to factory changeovers.
Speaker Change: Lower regulatory studies.
Speaker Change: Offset slightly by a slight increase in pricing due to the launch of new model Y. Despite incentives since we had to sell legacy worldwide.
Speaker Change: And then just storage business like I said before has achieved yet another.
Speaker Change: I'll start off Craig.
Profit in the quarter.
Speaker Change: This was despite a sequel.
Speaker Change: The sequential decline in deployment.
Speaker Change: The importance of this business as Elon mentioned.
Speaker Change: Pretty profound, especially in this environment because.
Speaker Change: Now in order for our grid.
Speaker Change: Properties to <unk>.
Speaker Change: All of this you need some more stability and disciplined lifestyle.
Speaker Change: By far the simplest and best solution, which we are aware of which can help do this and we will also develop something unique.
Speaker Change: Unique solutions to help our customers to achieve this.
Speaker Change: Additionally.
The firewall side.
Speaker Change: Hello, selling the new Palm oil <unk> and it's been received.
Speaker Change: Wei reception from customers and to the extent that we are currently supply constraint.
Speaker Change: On Venezuela under.
Speaker Change: Margins they were slightly down sequentially.
Speaker Change: Because of the pressure on the used car business and insurance business.
Speaker Change: Note that we continued our children needing to improve profitability in our services and solutions business.
Speaker Change: Productivity.
Speaker Change: As previously discussed our operating expenses continue to increase sequentially from <unk> to <unk>.
Speaker Change: Related initiatives, including Optimists, and also cost of develop windfall lake programs, including southern Gov somewhat and cheaper models.
Speaker Change: These expenses flow through R&D.
We believe even in the current environment. It is the right strategy.
Speaker Change: Making investments in these areas.
Speaker Change: And as for the long haul.
Speaker Change: These increases were offset by decreases in SG&A and some changes in our one collateral program.
Speaker Change: Other income will reduce significantly on a sequential basis.
Speaker Change: The primary reason was.
Speaker Change: Well bitcoin mark to market loss in Q1 versus 10 in Q4, resulting in a 472 million drawn.
Speaker Change: Remainder of the changes because of FX diminishment.
Speaker Change: The adoption of new Mark to market standards for Bitcoin, we expect.
Speaker Change: Volatility in other income in addition to the FX.
Speaker Change: And tenants.
Speaker Change: Hottest topic, which people talk about.
Speaker Change: Latest impacts to our business.
Speaker Change: As Ilan mentioned on.
Speaker Change: In the wake of business, we've been on this journey.
Regionalization for years.
Speaker Change: Specifically in the U S model y.
Speaker Change: Has been entered the most American mid con on costs not completed in America Index C is twofold.
Speaker Change: This is the boundaries of the all the work with the team has been doing all the helix and to the extent that today.
Speaker Change: If you look at us.
Michael: Michael lineup in U S well Bob.
Speaker Change: Approximately on a weighted average is 85% U S MCA compliant.
Speaker Change: So like Elon said, there's definitely gives us a bigger hedge as convinced a lot other Oems in terms of managing the test, but we're not that big.
Speaker Change: Because when the section 232 auditors become effective in May, which includes Canada, and Mexico, and Canada, and Mexico has been part of our regionalization strategy.
Speaker Change: It will have an impact on profitability.
Speaker Change: And there are no research bordering on this impact has been up a couple of Thompson.
Speaker Change: We just pretty much in line with what we've been forecasting.
Speaker Change: The impact of tenants on the annuity business will be up sites since we.
Speaker Change: So MSP battery cells from China.
Speaker Change: We ended the process of commissioning equipment for the local attraction will tend to feedback yourselves and the English.
Speaker Change: Thank you, Brent, which we have Kevin will establish a fraction of our.
Speaker Change: Total installed capacity of <unk>.
Speaker Change: Awesome.
Speaker Change: We've also been working on securing additional supply chain from non China based suppliers.
Speaker Change: But it will take time.
Speaker Change: Also note that in a matter of fact.
Speaker Change: In spite of all the impact on us from frontline energy from times Sunday lunch business we.
Speaker Change: We do have a Mega factory, China, which just started operations Q1 and that are that that should take care of our business outside of U S.
There was also an important impact of tenants on our capital investments I know this is something little sound counter intuitive since Nordic along functional and faxing, an expand lines, we have to bring equipment alongside the used because there is not that much capacity in U S and the concentrated in long island.
Speaker Change: Such equipment being built and this objective the expenses to bring it in from China right now exactly.
Speaker Change: [laughter].
Speaker Change: And the reality is China.
Speaker Change: One which has the most capacity the wide.
Speaker Change: Our capex guidance inclusive of Montes, even the optimizations. We've tried to do it is forecasted to be still in excess of 10 billion. This year.
Speaker Change: We're still evaluating what we want to do on disciplined to.
Speaker Change: To summarize we have near term challenges in our business due to tariffs and brand image.
Speaker Change: The thing our strategy of providing the best product at a competitive price is going to be a winner and this is the reason we're still focused on bringing cheaper models to market soon.
Speaker Change: A lot of production is still planned for June.
Speaker Change: Additionally, the advancement in Ssds and into features including final throughput actually launch in Austin later this year should help create new ahead of demand.
Speaker Change: I'd like to thank everyone at Tesla and our customers.
Speaker Change: Hey, Patrick Thank you very much Bob now.
Speaker Change: Now we will move on to the Investor questions I will start with questions from <unk> Dot com.
Speaker Change: First question is what are the highest grids highest risk items on the critical path to a robot taxi launch and scaling.
Ashok: And as Ashok.
Speaker Change: And we've got a truck line.
Speaker Change: Sure.
Speaker Change: Thank you Mrs.
Speaker Change: Talk by the.
Speaker Change: Just have disambiguate.
Speaker Change: Cyber Catherine Robo taxi plus gain.
Speaker Change: Sure.
So.
Speaker Change: Be well.
Speaker Change: When will Tesla does.
Speaker Change: Because that tells us that will be fully autonomous.
Speaker Change: Jeremy.
Austin: Austin, our employee model wise.
Speaker Change: So.
Speaker Change: That is.
Speaker Change: It's currently on track.
Speaker Change: To be able to do paid rights fully autonomous fleet.
Speaker Change: In June.
Speaker Change: Yes.
Speaker Change: And.
Speaker Change: And then to be in.
Speaker Change: Any other cities in the U S by the end of this year.
Speaker Change: Fair enough.
Speaker Change: Not to predict the exact ramp sort.
Speaker Change: Sort of.
Speaker Change: Week by week month by month, except that.
Speaker Change: It will ramp up very quickly.
Speaker Change: So it's going to be like some.
Speaker Change: Basically an S curve, where it's critical to predict the intermediate slope of the S curve, but you kind of know where the ESCO is going to end up.
Speaker Change: Which is the vast majority of the total fleet being autonomous.
Speaker Change: So.
Speaker Change: That's why I feel confident predict David large scale economy.
Speaker Change: Around the middle of next year.
Speaker Change: Certainly the second half of next year.
Speaker Change: Hi, Greg that there'll be millions of Tesla's operating autonomously fully autonomous fleet.
Speaker Change: In the second half of next year.
Speaker Change: Yes.
Speaker Change: Got it.
Speaker Change: Yes, it does.
Speaker Change: It does seem increasingly likely that there will be.
Speaker Change: A localized.
Speaker Change: Parameters that grasberg.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: Especially for.
Speaker Change: Hi.
Speaker Change: Places, perhaps a very snowy weather et cetera in the northeast with all of them.
Speaker Change: You can think of it it's kind of like the human.
Speaker Change: If you.
Speaker Change: So you can be a very good driver in California, but are you going to be also a good driver and at Blizzard in Manhattan.
Speaker Change: Youre not going to be as good.
Speaker Change: So there's actually some value.
Speaker Change: This will drive better probably because of an accident is higher so.
Speaker Change: It's increasingly obvious that theres some value too.
Speaker Change: Having.
Speaker Change: Okay.
Speaker Change: <unk>.
Speaker Change: Set of parameters for.
Speaker Change: Okay.
Speaker Change: Okay.
Different regions and.
Speaker Change: And localities.
Speaker Change: Okay.
Speaker Change: That prevented the nice to have category.
Speaker Change: Required category.
Speaker Change: Hey, guys.
Speaker Change: Really the cars.
Speaker Change: Just very much like the human.
Speaker Change: It's digital neural nets and.
Speaker Change: And cameras and humans operate with biological neural nets.
Speaker Change: Eyes.
Speaker Change: And so at the same strengths or weaknesses will be present.
Speaker Change: Four.
Speaker Change: Yes.
Speaker Change: Digital.
Speaker Change: <unk> is a biological neural net nice.
Speaker Change: If you'd like to elaborate on that.
Speaker Change: Yes, I was speaking to the location specific models with shallow agenda based approach and you can see that from.
Speaker Change: Our department of FSD Super away from China.
Speaker Change: We added minimal data, that's SaaS Pacific the modest generalized quite well.
Speaker Change: Many different driving sites.
Speaker Change: It just shows that the best solution that we have is the right one because if you had gone down the previous.
Speaker Change: Rule based solutions are like more Hard-coated HD map based solutions is or taken like many many years to get sand to work as you can see those from the videos that people postpone mindsets.
Speaker Change: <unk>.
Speaker Change: So these end of life solution that Europe.
Speaker Change: Pursuing is the right one that's going to scale well and you can think of this like location specific parameters that you don't know what you did to Africa, a mixture of experts.
Speaker Change: Some of the assembly of it.
Speaker Change: Hey models and rock.
Speaker Change: They all use a mixture of experts to perfect specialize the parameters to specific task, while still being general this make fee.
Speaker Change: Yes.
Speaker Change: Do you have a similar amount of compute to solve for the.
Speaker Change: The diversity of past I think that's the total.
Speaker Change: In terms of addressing the question Thats as far in all of the.
Speaker Change: Critical things that need to get right. One thing I'd like to note. This validation self driving is a long term problem that can be a lot of X cases to Colombia happened very very badly currently we are driving it on in Austin, using our JFK, but anything super App to get interventions that are critical part of what actually operation.
Speaker Change: And taking that go many days without getting any single intervention. So you can't.
Speaker Change: Italy, Norway that you had improving our recruiting and your capacity.
<unk> Buildout sophisticated simulations are including neural network based media generation.
Speaker Change: That's all happening in the background to make sure that we deliver a safe product and we are able to measure our safety, even though we can't succeed.
Speaker Change: Now on the block or something like that.
Speaker Change: Good afternoon.
Speaker Change: I mean very basic terms.
Speaker Change: We're seeing an accident every.
Speaker Change: Every 10000 miles will will then you have to drive 10000 miles on average before he got an accident.
Speaker Change: Or any intervention.
So it was like okay.
I imagine.
Speaker Change: We must be really.
Speaker Change: It must be voice wake up by the sheer number of Tesla is doing its focus in motion right now.
Speaker Change: Yes.
It's great looking pretty bizarre.
Speaker Change: Yes.
Speaker Change: Some people are chasing.
Speaker Change: Yes.
Speaker Change: So that is just always a convoy of Tesla's Greg.
Speaker Change: Okay.
Just going over to Austin and circles.
Speaker Change: But yes it is.
Speaker Change: I just can't emphasize this enough.
Speaker Change: In order to get figured out in long tail things.
Speaker Change: I was wondering sendoff. Thanks, guys wanted 20000 miles wondering 30 day.
Speaker Change: The average person drives 10000 miles a year.
Speaker Change: So Matt try to compress that test cycle into a battery.
Speaker Change: A few months that means you need a lot of cars.
Speaker Change: During a lot of driving.
Speaker Change: In order to compress that award.
Speaker Change: In a matter of a month what would normally take.
Speaker Change: A year.
Speaker Change: Okay.
Speaker Change: Also I have that.
Speaker Change: Looked at those videos coming out of China.
Speaker Change: Yes.
Speaker Change: Yes, they are putting it to real test.
Speaker Change: Dr. <unk>, frankly, I think the Chinese consumer might be the most Americans consumer and.
Speaker Change: I.
Speaker Change: Akshay.
Speaker Change: Customers in China also.
Speaker Change: There are a lot of fun with the cars I saw one guy.
Speaker Change: Take a tesla right.
Speaker Change: On.
But autonomous standpoint, narrow dirt road, yes.
Speaker Change: Across Black Mountain.
Speaker Change: So im sorry break person.
Speaker Change: And that's also driving long.
Speaker Change: When the road with no barriers.
Speaker Change: It makes a mistake he's going to place to assume.
Speaker Change: But it worked.
Speaker Change: Great. Thank you and it's the question was on cyber cab itself.
Speaker Change: Okay.
Speaker Change: Where it would be simple validation now, yes, you should ask that question too.
Speaker Change: We have.
Speaker Change: Our first.
Speaker Change: Okay.
Speaker Change: Like <unk> coming at the end of this quarter in Q2.
Speaker Change: Is that coming months start to large scale.
Installation of all equal then you can get Texas with Stoughton scheduled for production next year.
Speaker Change: I just wanted to clarify because I think people don't understand the thing that there is no new building being built and what is <unk>.
Speaker Change: Alright. Thanks.
Speaker Change: Factory, yes.
Speaker Change: Okay.
Speaker Change: It's happening and people don't announce Cynthia.
Speaker Change: And there is not a long lines, while we're still building the model lines and cyber trends every day.
Speaker Change: Yes, so it's worth noting that the.
Speaker Change: It says the Giga factory of Austin is three times the size of the Pentagon.
Speaker Change: Included in the guidance yes.
Speaker Change: Including the ground zero button.
Speaker Change: So.
Speaker Change: Got it.
Speaker Change: Just wondering just to look big.
Speaker Change: With any more.
Speaker Change: Okay. Thank you very much. The next question is when will FSD unsupervised be available for personal use on personally owned cars.
Speaker Change:
Speaker Change: But before the end of this year.
Speaker Change: Not necessarily.
Speaker Change: Within the U S.
Speaker Change: We do want to test.
And Tesla.
Speaker Change: Pollute League hardcore about safety.
Speaker Change: We've got a great lengths to make the <unk> car in the world and have the lowest accidents per mile.
Speaker Change: So.
Speaker Change: Curious lives lost so we wanted to be very careful so everyone autonomy to be definitively safer than.
Speaker Change: Manual driving.
Speaker Change: So.
Speaker Change: That would just be as safe it needs to be meaningfully safer than cars.
Cars manually driven.
Speaker Change: So.
Speaker Change: And we want to confirm that theres lots of things.
Speaker Change: Okay.
Speaker Change: Just wanted to be cautious with the rollout we don't want to jump in at the deep end with Norway.
Speaker Change: So.
Speaker Change: With that said I think.
Speaker Change: We shipped.
Speaker Change: People should we should be able to have.
Speaker Change: At work.
Speaker Change: Several studies later this year for personal use.
Speaker Change: So.
Speaker Change: The asset has been you should be able to kindergarten.
Go to sleep and your corn Wakeman your destination.
Speaker Change: And I'm confident that will be.
Speaker Change: Available in many cities in the U S by the end of this year.
Speaker Change: Great. Thank you very much.
Speaker Change: The next question is is Tesla is still on track from leasing more affordable models this year or.
Speaker Change: Or will you be focusing on simplifying versions to enhance affordability similar to the rear wheel drive sandrock.
Speaker Change: Yes, we're still planning to release models this year.
Speaker Change: And without launches were working through like the last minute issues that pop up.
Speaker Change: Now one last one at this point I would say that ramp maybe might be a little slower than we had hoped initially but theres nothing youre just kind of given the turmoil that exists in the industry right now.
Speaker Change: But but theres nothing to blocking us from starting production within the next within laid out in the opening remarks.
Speaker Change: I will say too Brian I'm, sorry, as we've said all along for utilization of our factories is the primary goal for this new product.
Speaker Change: And so flexibility of what we can do within the form factor.
Speaker Change: <unk>.
Speaker Change: The design of it is really move into a bit of what we can do on our existing lines.
Speaker Change: New ones, but we've been targeting the low cost of ownership monthly payment is the biggest differentiator for vehicles.
Speaker Change: That's why we're focused on bringing new models with a big number was price.
Speaker Change: So the market kind of within the constraints that you're selling.
Speaker Change: Great. Thank you very much and the next question is does Tesla <unk> taxi is a winner take most market and as you approach the Austin Manche, how do you expect to compare against <unk>, offering, especially regarding pricing geo fencing and regulatory flexibility.
Speaker Change: Okay.
Speaker Change: The issue with Weibo's causes a cost way more money.
Speaker Change: Yeah.
Speaker Change: Sure.
Speaker Change: Okay.
Speaker Change: Bob.
Speaker Change: But that is the issue.
Speaker Change: Because of our expensive made and low volume.
Speaker Change: Telcos are.
Speaker Change: I don't know probably.
Speaker Change: Cost of goods.
Speaker Change: The quarter of 2023rd quarter.
Speaker Change: But one of the wafer cost.
Speaker Change: And made them very high volume.
Speaker Change: So.
Speaker Change: Ironically.
Speaker Change: We were the ones, who made the bet that our purion exploration with cameras and what do you have the correction will listen for sirens and that kind of thing.
Speaker Change: It's the right move.
Speaker Change: And we decided.
Speaker Change: Decided that.
Speaker Change: Expensive sensor suite was the way to go even though.
Speaker Change: <unk> very good at AIG, So I'm wondering.
Speaker Change: And it is worth noting that Tesla has broken incredible AI.
Speaker Change: AI software team and AI hardware chip design team.
Speaker Change: From scratch.
Speaker Change: Britain required.
Speaker Change: Both of them.
Speaker Change: So.
Speaker Change: Yes, it's really.
Speaker Change: I mean, I don't see anyone being able to compete with Tesla at presence.
Speaker Change: I'm sure it'll change eventually.
Speaker Change: But.
Speaker Change: But at least as far as I'm aware.
Speaker Change: <unk>.
Speaker Change: Does it have.
Speaker Change: I don't know.
Speaker Change: 90 <unk>.
Speaker Change: 9% market share or something ridiculous.
Speaker Change: 90, something percent at least I don't know.
Speaker Change: So that might change but.
Speaker Change: Yes.
Speaker Change: We have millions of cars deployed next year unless.
Speaker Change: Others have.
Speaker Change: Millions of across the board.
Speaker Change: We will have.
Speaker Change: Elisa blocked by regulatory situations.
Speaker Change: It won't be long I mean at a furious <unk> 10 million.
Speaker Change: Autonomous cars on the roads.
Speaker Change: Yes.
Speaker Change: And accounting.
Speaker Change: The other thing, which people forget is that we're not just looking at the software solution. We are also manufacturing tech ops and lake.
Speaker Change: They will have their taking cars and trying to pay more money.
Speaker Change: Yes.
We don't do that so that definitely gives us a big leg up in like Peanuts that we only have a big existing fleet.
Speaker Change: Which hopefully with the software updates could become autonomous.
Speaker Change: It will be coming down.
Speaker Change: To be clear the model I think we're doing that.
Speaker Change: 300, <unk> in Austin in June.
Speaker Change: We are one of the ways. We may currently there is no change to it.
Speaker Change: I think people don't appreciate that the car, which they can buy today because they have articles behalf.
Speaker Change: Capable of these kind of things.
Speaker Change: In fact, it does drive autonomously from the factory because and offline every car.
Speaker Change: Yes nowadays.
Speaker Change: Through the tunnel and mobilized everything right yes.
Speaker Change: Good afternoon.
Speaker Change: It is we put it to use.
Speaker Change: Yes.
Speaker Change: Useful work fully autonomous Lee at the factories is a surplus, especially the cars drive themselves from end of line two to where they're supposed to be picked up.
Speaker Change: Via truck.
Speaker Change: To be taken to a customer and I am confident also that.
Speaker Change: Later this year.
Speaker Change: Model Y will drive itself all the way to the customer.
Speaker Change: So from an R.
Speaker Change: Right.
Speaker Change: Factory in.
Speaker Change: Boston one in here in Fremont, California.
Speaker Change: Hi.
Speaker Change: Our covenant debt from both factories, but be able to drive directly to a customer.
Speaker Change: From a doctor.
Speaker Change: Yes.
Speaker Change: Yeah.
Speaker Change: Literally adjustment end of line and driving me nuts.
Speaker Change: It's unfortunate in the factories, we don't have dedicated lanes. There anything people are now everyday trust delivering supplies arts construction.
Speaker Change: And people could fall by the way you can see this from the road.
Speaker Change: Exactly.
Speaker Change: In this video is people will take videos online and anyone who wants to go see it and just drive past.
Speaker Change: First our Fremont factory and see the autonomous cars.
Speaker Change: And they drive this ultimate put themselves in the exact right spot and so we picked up yes.
Speaker Change: Yeah.
Speaker Change: We don't move it again.
Speaker Change: Okay. So thanks, Bob Thanks, Bob Yes.
Speaker Change: Yes.
Speaker Change: So that's just a routine like everyday.
Speaker Change: Yeah.
Speaker Change: Great. Thank you very much. The next question is can you. Please provide an update on the unboxed method and how that has progressed sure.
Speaker Change: It's progressing as we would be.
Speaker Change: As I mentioned, just a minute ago. It is the <unk>.
Speaker Change: <unk> for our cyber kept manufacturing process, it's really what we changed in order to allow the low cost of production I don't think it's a super high level languishing.
Speaker Change: It really levels of automation that are sort of unheard of in vehicle manufacturer it's Jim.
Speaker Change: Something that.
Speaker Change: When you see it be produced.
Speaker Change: You'll think of in terms of Mike Palmer tank cars been booked for 100 years.
Speaker Change: Really changed.
Speaker Change: In the past year, we've been like focusing on a lot of key development areas like marine large subassemblies together I'm in a precise way accurate way we've also.
Speaker Change: Things like corrosion.
Speaker Change: Going towards aluminum structures.
Speaker Change: Viewing across the seams of the vehicle and when you marry assemble components and we've even done early processing of improving that Mike It's Jay.
Speaker Change: Just to take this on the upcoming Bill.
Speaker Change: So.
Speaker Change: Okay.
All that combined with kind of go into the builds that we have in this quarter.
Speaker Change: Cyber cat product and that's the next real big test of full scale.
Speaker Change: Integration of the Unbox process.
Speaker Change: <unk>.
Speaker Change: Okay, that's kind of where we are so youll see an intestinal them on the <unk> a couple of months.
Speaker Change: Yes.
Speaker Change: And although the line wouldn't be upset at this rate initially initially.
Speaker Change: Hi.
Speaker Change: The.
Speaker Change: This is a revolutionary production system.
Speaker Change: I'm not sure what the right word is unboxing it sounds like so I mean look when you get your phone.
Speaker Change: Open it out.
Speaker Change: Yes, we have like a pleasant experience when you take your phone out of the box.
Speaker Change: But which caused a spike.
Speaker Change: Russell a revolutionary demand.
Speaker Change: This is.
Speaker Change: Profound.
Speaker Change: <unk> of how to make cars in the first place.
Speaker Change: No cars made like this anywhere in the world.
Speaker Change: The factory is the product as much as the cars the product.
Speaker Change: So.
Speaker Change: It's really just first principles approach to manufacturing.
Speaker Change: That will ultimately allow us I think.
Speaker Change: That's what I think I'm confident ultimately allow us to achieve.
Speaker Change: <unk>.
Speaker Change: Our cycle time.
Speaker Change: Okay.
Speaker Change: Every five seconds or less.
Speaker Change: The single line.
Speaker Change: And we want to incorporate some of these protested into our existing production lines as well.
Speaker Change: Yes.
Speaker Change: Already.
Speaker Change: So we have been thinking about for a long time.
Speaker Change: Excellent.
Speaker Change: The thing about this form 10 minutes curve.
Speaker Change: It's not a crazy thing.
Speaker Change: Like a car every five seconds may sound like it's coming out like bullets, but actually it's coming out at walking speed.
Dmitry: Metres dmitry recycling.
Speaker Change: So.
Speaker Change: This is Mike.
Speaker Change: We're still far away from carrying about.
Speaker Change: Eric Nemec drag of the manufacturing lines.
Speaker Change: Yes.
Speaker Change: There is still a three miles an hour.
Speaker Change: Yes.
Speaker Change: We know it doesn't.
Speaker Change: You know every five seconds I was crazy when you strip out there George Lindbergh.
Speaker Change: So yes, you can run away from basically.
Speaker Change: But thats still by far the fastest line on Earth.
Speaker Change: <unk>.
Speaker Change: And it looks like.
Speaker Change: Half on half automate.
Speaker Change: What's the best thing a lot of unknowns.
Speaker Change: <unk> countries too and Thats.
Speaker Change: Yes.
Speaker Change: We're the fastest right I would think so we think we think we're the fastest.
Speaker Change: At 33 seconds.
Speaker Change: Second factor, but this would be down.
Speaker Change: Six times faster, sometimes patched or thereabouts.
Speaker Change: So.
Speaker Change: Sure.
Speaker Change: Yes.
Speaker Change: But the point is that like.
Speaker Change: When you when you fully optimized the design.
Speaker Change: And the operation of the next generation factory that we're building right now.
Speaker Change: The five second cycle time or less is.
Speaker Change:
Speaker Change: The design is capable of it.
Speaker Change: Yes.
Speaker Change: But when you go through like a radical new architecture, you go from like being like.
Speaker Change: Alright.
Speaker Change: Shanghai in particular is an a plus.
Speaker Change: Moderately.
Speaker Change: And advanced but still.
Speaker Change: Traditionally traditional car.
Speaker Change: Our production system.
Speaker Change: Sort of.
Speaker Change: They're really.
Speaker Change: Doing about as good as possible it is possible to do within it and congressional scenario.
Speaker Change: <unk>.
Speaker Change: The.
Speaker Change: So trying to get much below that.
Speaker Change: Sort of bloke below like 30 seconds extremely difficult.
Speaker Change: And as you start getting into sort of impossible, where you just.
Speaker Change: You have to be faster than a human could possibly move.
Speaker Change: So then.
Speaker Change: The autonomous line.
Speaker Change: It really just needs to be robust moving really fast.
Speaker Change: And that's where it gets us up five seconds.
Speaker Change: But goodwill.
Speaker Change: So we'll start off with at getting a C.
Speaker Change: Yes.
Speaker Change: <unk> is C at a new architecture.
Speaker Change: Right.
Speaker Change: The potential is there over time would have been up two and a plus within an eight plus architecture.
Speaker Change: Great. Thank you very much.
Speaker Change: The next question is how is Tesla positioning itself to flexibly adapt to global economic risks in the form of tariffs political biases et cetera.
Speaker Change: As you know onsite deals we've been pricing team.
Speaker Change: For awhile.
Speaker Change: We continue to mitigate global economic risks like Parison pointed political biases by <unk> Park supply in your factories in North America Berlin in Shanghai.
Speaker Change: For example in North America are high volume vehicle programs have over 85% North American content and Shanghai vehicles on over 95% local content.
Speaker Change: That's the movement also regionalize season, as North American when you exclude the battery and we are working on regionalized the battery as well.
Speaker Change: This is a pre pandemic strategy that we accelerated post pandemic to supply diversification dual sourcing vertical integration advanced analytics and local partnerships to ensure supply chain resilience and operational stability.
Speaker Change: Having said that we're not 100% insulated and these tax rates are higher on our low volume platforms.
Speaker Change: Hi, Wally.
Speaker Change: Yes.
Speaker Change: There's no more vertically integrated car company and Tesla.
Speaker Change: Thank you Brett.
Speaker Change: We're the most vertically integrated company since.
Speaker Change: No.
Speaker Change: Henry Ford back in the day, when they were drilling mining iron and stuff.
Speaker Change: And growing rubber trees.
Speaker Change: So.
Speaker Change: But we're not growing around the trees mining iron yet.
Speaker Change: But we are we have built at <unk>.
Speaker Change: Lithium refinery in South Texas.
Speaker Change: And I.
Speaker Change: I think the biggest lithium refinery outside of China, Inc.
Speaker Change: Alright.
Speaker Change: Yes, I think so.
Speaker Change: Yeah.
Speaker Change: It has its upward potential would be the biggest moving refinery.
Speaker Change: Just trying to expand it.
Speaker Change: Right. So and then we've got the capital refinery.
Speaker Change: In Austin next week.
Speaker Change: Capri.
Speaker Change: We can figure out what to do about the anode.
Speaker Change: I'm sorry.
Speaker Change: Discussion.
Speaker Change: The vessel possible, let's be fair.
Speaker Change: And how to help no headwind.
Speaker Change: First at a desktop being no part that's.
Speaker Change: That's the dream of.
Speaker Change: Lithium batteries.
Speaker Change: But having a node.
Speaker Change: But either way.
Speaker Change: But we better have the NOL Kathryn.
Speaker Change: In the lithium and daylight for lights with separator.
Speaker Change: To make a cell.
Speaker Change: Okay.
Speaker Change: Theres no other car companies that has both lithium refineries and cathode refineries.
Speaker Change: Were ridiculously vertically integrated.
Speaker Change: And thus are best positioned to protect against supply chain disruptions.
Speaker Change: Alrighty numerical but progress in the book.
Speaker Change: And suddenly in ourselves.
Speaker Change: Multi source to every component we have.
Speaker Change: Every part coming from at least two different countries margin, which is.
Speaker Change: We started this the supply chain team and engineering team worked together on this for the last couple of years to put it together, it's not something you did.
Speaker Change: A couple of months this is seasonal work.
Speaker Change: We're in a good position to two.
Speaker Change: The advantage of that.
Speaker Change: The in sourcing of our lithium and catalyst.
Speaker Change: The two most critical parts of a battery of tests.
Speaker Change: Right in their backyard and we're totally insulated from.
Speaker Change: <unk> operation, but thank you for your operations.
Speaker Change: We also make ourselves by the way so cell production.
Speaker Change: Got it.
Speaker Change: Yes.
Speaker Change: Did you make the entered the cathode.
Speaker Change: Lithium electrolyte separator.
Speaker Change: And then you got to put all that together and the cell factory.
Speaker Change: And there are entire companies that all they do is produce sales, but they're up to the other stuff.
Speaker Change: Refined lithium or the cathode.
Speaker Change: Yes.
Speaker Change: So our cell production is going quite well and I think we are.
<unk>.
Speaker Change: Character.
Speaker Change: We're currently at sort of.
The lowest cost per kilowatt hour.
Speaker Change: And the others.
Speaker Change: All cells, we purchase in North America.
Speaker Change: Yes.
Speaker Change: <unk>, yes, so we have the lowest cost per kilowatt hour all things considered.
Speaker Change: So the test cell is the most competitive sale.
Speaker Change: Yes for kilowatt hour putting SOCAR.
Speaker Change: As we sell at lower constant with the suppliers. So yes.
Speaker Change: Yes. The plan. This year is to really build up that base getting to lowest cost is.
Speaker Change: It's been the hottest challenge Proteasome inhibitor.
Speaker Change: It's relatively easy to build a flashy product it does one thing well.
Speaker Change: To build something at high volume and loan losses, but if you look at kind of using that as a base to then go often and added performance in different areas.
Speaker Change: Products coming out.
Speaker Change: Yeah.
Speaker Change: So.
Speaker Change: Okay. Okay.
Speaker Change: <unk>.
Speaker Change: A lot of advantages for regionalization. The most important thing is we're not kind of working capital for six to eight weeks on the ocean. If theres a design change than everything Thats in transit basically has to be scrapped secondly, port disruptions as you start getting until that can be very expensive because sled disconnects can shutdown production. So then your only option is constantly yesterday and it also.
Speaker Change: Gives us resilience in supply chain. If one region is down we can bridge with others. It's more of a setup in the beginning but it's critical to have been the need arises.
Speaker Change: Having said that it's unrealistic to assume a 100% regionalization across the board for specialized areas such as semiconductors in such cases are seeing looks very closely with our partners to ensure we have strategic banks in place and are.
Speaker Change: Disruption doesn't impact production, while we stand up the original transaction for that particular commodity.
Speaker Change: And I will say like all the rest of the vehicle by Don was talking about with sales were also heavily very.
Speaker Change: Important gets turned on castings, we recycle those and also with the same thing with plastics, but it doesn't mean, we're not exposed.
Speaker Change: We do have.
Speaker Change: Some areas, where we use rare earth magnets.
Speaker Change: <unk> been working for years to find alternative sources and bring those up as well as we have learned things and as we've mentioned in the past we are working with varying numbers for some time so.
Speaker Change: As Curt said with our heavy regionalization presented as we definitely like the lowest.
Speaker Change: We're exposed to this but we're not completely immune as Pat mentioned.
Speaker Change: <unk>.
Speaker Change: Great.
Speaker Change: Similarly related.
Speaker Change: Batteries is Tesla step of battery supply constraint as noted on the Q4 call and as that chain tariffs.
Speaker Change: We've been working very hard to expand battery cell production in the U S. Both with vendors and what Bonnie I mentioned earlier with 46 80 program.
Speaker Change: And we're also working on moving the upstream supply chain for about yourselves to the United States for several years and that strategy is really starting to pay off now as it stands right now we're not constrained on battery cells and micro vehicles. The recent tariffs do posing challenges to Tesla energy like our CFO mentioned earlier, but it's something we've been anticipating and we should be able to resolve.
Speaker Change: And timely fashion, when we actually have a plan in place in rives skewing towards it.
Speaker Change: We also have some years, where things sources coming online to supplement the shortfall and then of course, we have the.
Speaker Change: Healthy production that's happening in house.
Speaker Change: Yes.
Speaker Change: We have we have a slight disconnect.
Speaker Change: Aligning the right cells with the right path.
Speaker Change: The little bit of a puzzle that we have to solve internally but.
Speaker Change: That's why ourselves, though theres no shortage.
Speaker Change: Great. Thanks.
Speaker Change: Thank you very much. The next question is detestable experienced any meaningful changes the order inflow rates in Q1 relating to all the rumors.
Speaker Change: <unk> damage.
Speaker Change: Seth.
Speaker Change: Q1 as mentioned earlier, we took the best line card in the last two years and ramped up all four of our global factories and in less than eight weeks, we have already gone to the rate of our previous model wise. The factories. So just kudos against the teams did a great job there and despite the economic strain and negative articles to add.
Speaker Change: In California in Q1, Tesla remained the best selling car not just EDI and Additionally, we had a record number of test strides globally in Q1 as well so interest remains high.
Speaker Change: And so right now we continue to see.
Speaker Change: Good interest still in vehicles.
Speaker Change: Yes.
Speaker Change: I mean to the tenants.
Speaker Change: Going into.
Speaker Change: Sort of.
Speaker Change: The macro demand for cars so.
Speaker Change: When there is economic uncertainty our.
Speaker Change: People.
Generally when a pause on buying.
Speaker Change: Taking a major capital purchase like a car.
Speaker Change: But.
Speaker Change: As far as.
Speaker Change: Absent macro issues, we don't see any.
Speaker Change: Any reduction in demand.
Speaker Change: Correct.
Speaker Change: <unk> focus on affordability and.
Speaker Change: Thanks, Matt.
Speaker Change: Yes.
Speaker Change: Thank you guys and.
Speaker Change: The next question is regarding the Tesla openness pilot line could you confirm if it is currently operational if so what is the current production rate out of Ottoman spots per week. Additionally, how might the recent tariffs impacted scalability best production line going forward.
Speaker Change: Okay.
Speaker Change: Afterwards.
Speaker Change: I wanted to sort of size of autonomous is still very much development program is not it's not.
Speaker Change: On the large volume question that's fine.
Speaker Change: Sure.
Speaker Change: And we will make to Cuba.
Speaker Change: We do expect to make thousands of utmost robust, but most of our projects can be at the end of the year.
Speaker Change:
Speaker Change: So.
Speaker Change: The.
Speaker Change: Almost everything and Optimus is new.
Speaker Change: Not like an existing supply chain for the motors gearboxes electronics actuated really anything in the EMEA or taking them. After this.
Speaker Change: Apart from the.
Speaker Change: The AI for Tesla Bethesda, AI computer, which is the same as one of the car.
Speaker Change: So.
Speaker Change: Hi.
Speaker Change: When you have a new COO.
Speaker Change: Complex manufactured product it will move as fast as the slowest and least lucky components and the entire thing.
Speaker Change: As a first order approximation there was like 10 to 10000 unique things.
Speaker Change: So that's why that's why isn't anyone who tells you they can predict.
Speaker Change: Hi.
Speaker Change: With precision the production ramp of truly.
Speaker Change: Truly new product.
Speaker Change: As does know what they're talking about.
Speaker Change: It is virtually impossible.
Speaker Change: So.
Speaker Change: You go through the cycle.
Speaker Change: Series of constraints, where those parts are looming back now that Apache limping back delivers fast moving factor.
Speaker Change: And then multiply that by basically.
Speaker Change: And then the rate of the production ramp is decided by how quickly you can solve each of those bonds.
Speaker Change: No.
Speaker Change: <unk>.
Speaker Change: Yes.
Speaker Change: Optimists was affected.
Speaker Change: Yes.
Speaker Change: By the magnets issue from China, because the Optimus actuators in the arm to use permanent magnets now.
Speaker Change: Let me to use brokers and bankers, but when something is.
Speaker Change: Volume constrained like like norm.
Speaker Change: The robot.
Speaker Change: Do you want to try to make them motors as small as possible.
Speaker Change: And then.
Speaker Change: So we did the design and permanent magnet tenant Magna is close motors most were affected by the supply chain.
Speaker Change: Basically China, requiring an export license to send out.
Speaker Change: Any rare Earth magnets.
Speaker Change: So we're working through that was trying to hope we will get a license to use the rare earth magnets.
Speaker Change: Trying to want some assurances that is not used for military purposes, which obviously are not just going into a humanoid robot so.
Speaker Change: One weapon system.
Speaker Change:
But that is certainly can make.
Speaker Change: Temple LNG <unk>.
Speaker Change: Okay.
Speaker Change: Comparable overcome these issues.
Speaker Change: And we will by the end of this year at thousands of partner programs.
Speaker Change: Great. Thanks, very much and the last question.
Speaker Change: I already covered earlier, what had robot taxi is still on track for this year. So.
Speaker Change: With that we can move on to analyst questions and the first question is going to come from here at New Street and peer at least under yourself.
Speaker Change: Hey, guys can you hear me.
Speaker Change: That's great.
Speaker Change: Very excited to hear horror robotics, Tim is becoming a very tangible suggests a desktop but I have actually a question on <unk>.
Speaker Change: On the legacy I guess, if it's a current like hotel business and when I look back into the ramp of motor three ish years ago, I'm really sorry.
Speaker Change: Being isolated.
Speaker Change: Our new courtyard completely reinvented very differentiated experience vastly superior impossible to.
Speaker Change: To match.
Speaker Change: Our traditional competitors.
Speaker Change: And for the iPhone in Triple digits.
Speaker Change: The high end of the smartphone market QUADRA opinion size and actually taking 60% market share.
Speaker Change: So when you look at <unk> today, I think they are still activity.
Speaker Change: Vastly superior to any other scars and I wonder why.
Speaker Change: That's taken about 15%.
Speaker Change: The addressable market and up more actually.
Speaker Change: So and as I went to <unk>. So many people still buying them to good use and Methodist knowing that sir.
Speaker Change: So it just random otherwise out there.
Speaker Change: And available.
Speaker Change: And I wonder if you're if you're trying to solve.
Speaker Change: That trigger internally if you understand why.
Speaker Change: What else is.
Speaker Change: <unk> hundred <unk>, then why are you missing and if you have ideas of things you could do to address that maybe.
Speaker Change: This enormous value left on the table there.
Speaker Change: Yes, that's what I'm.
Speaker Change: Wondering these days.
Speaker Change: Yes.
Speaker Change: The reality is that.
Speaker Change: In the future.
Speaker Change: We are not going to buy clothes.
Speaker Change: So it's kind of what.
Speaker Change: At what point could sort of say look.
Speaker Change: One two.
Speaker Change: With your preferred.
Speaker Change: Metaphor I mean, if you remember the days of the flip phones. When there was a 100 different flip phone designs.
Speaker Change: And I would.
Speaker Change: The mistake that lump manufacturers made was to try to.
Speaker Change: Making them many different variance of foot bone.
Speaker Change: Which was a mistake I should've made iPhone.
Speaker Change:
Speaker Change: Yes.
Speaker Change: So.
Speaker Change: Because obviously everyone's going to want a smartphone but at the beginning of the win.
Speaker Change: The iPhone came out I was like well it can't believe these guys is.
Speaker Change: Reacting as though.
Beth: This is beth.
Speaker Change: But they are doing.
Speaker Change: I kept making to variance in flip phones.
Speaker Change: Okay.
Speaker Change: I think at one point was the most valuable company in the world or close to it.
Speaker Change: But they kept making for phones.
Speaker Change: I'm trying to find another market niche maybe somebody wants a photo of a different style.
Speaker Change: Maybe just different color or whatever it is.
Speaker Change: No they just want.
Speaker Change: Our super intelligent phone.
Speaker Change: They can do everything.
Speaker Change: Just one.
Speaker Change: So.
Speaker Change: Yes.
Speaker Change: I say this many have said this many years ago.
Speaker Change: But in the future and in the not too not too distant future.
Speaker Change: Buying a gasoline car that is not autonomous will be like writing.
Speaker Change: Riding a horse while using a flip phone.
Speaker Change: Some people still do it but it's rare.
Speaker Change: Okay.
Speaker Change: Thank you. The next question comes from Emmanuel Rosner at Wolf.
Speaker Change: Daniel Please limit yourself.
Emmanuel Rosner: Great. Thanks for taking my question.
Speaker Change: So the public version of the FSB software still has a decent amount of.
Speaker Change: I guess intermittent human interventions that are required.
Speaker Change: So what's still required for the software.
Speaker Change: Year end to get to a level, where he doesn't need to be supervised and I'm asking that in the context of <unk>.
Speaker Change: Obviously, the June launch being in the next couple of months.
Speaker Change: What still needs to happen.
Speaker Change: And we are working on a number of items to go ahead.
Speaker Change: Yes.
Speaker Change: I mean, we are aware of the interventions that are happening.
Speaker Change: And Thats why theyre hardcore winding it down.
Speaker Change: Speaking some initial launch it it helps us focus on like solving all the issues that we face here.
Speaker Change: For example, I guess, focusing on Austin and architects solving all the issues that the customers in Boston or some areas Mike fish.
Speaker Change: Then here.
Speaker Change: Our biggest issues is burning down and Thats, what the team is working on along with other.
Speaker Change: Sorry, if I could redundancy issues for example, if one larger computers costs down right down the customer fleet into the ready to hand, and ask you to take over but.
Speaker Change: One does kind of situation so youre solving both like the celebrities yourself the autonomy software and also the degradation.
Speaker Change: System software.
Speaker Change: Either for Austin.
Speaker Change: Yes, it's really just we're just worked through a long tail of unusual interventions.
Speaker Change: So.
Speaker Change: And these are really very very effectively.
Speaker Change: As the single items.
Speaker Change: You mentioned every 10000 miles I mean, there's a lot of driving you benefit to even find one case with an ethics.
Speaker Change: Yes, and some enduring send that yet can you give us just some.
Speaker Change: Patrick.
Speaker Change: Missing functionality for example for handling emergency victims correctly, youre going to consume audio ads.
Speaker Change: But other than the customer facing questions don't die of audio input for the portion thats in let's call them being Austin will have audio input and so on.
Speaker Change: Okay, but would you have like remote operators for example.
I mean every now and then if the car gets to a question I think someone will likely now.
Speaker Change: On rocket, but it's just because we are a bit conservative and tend towards.
Speaker Change: More safety, then even if I get stock every now and then.
Speaker Change: We do have a more support but it sounds going to be.
Speaker Change: For safe operation, if anything just quite far more availability.
Speaker Change: It's only a couple months away, so you're going to say for yourself.
Speaker Change: 12 months Nordson.
Speaker Change: Great. Our next question comes from Edison at Deutsche Bank.
Speaker Change: Please limit yourself.
Speaker Change: Hi, Thank you very much for the question. So I wanted to ask about the optimists supply chain going forward.
Speaker Change: You mentioned very fast ramp up what do you envision that supply chain looking like is it going to require many more suppliers to be in the U S. Now because of the tariffs.
Speaker Change: I just wanted to think about when needs to happen there.
Speaker Change: Great to see how things settle out.
I don't know yet.
Speaker Change: Great.
Speaker Change: Thanks for doing.
Speaker Change: You talked about which is that.
Speaker Change: We've already taken tremendous steps localize our supply chain, where there were more localized than any other manufacturer.
Speaker Change: And and we have a lot of things.
Speaker Change: On our way to increase the localization to reduce supply chain.
Speaker Change: Risks associated with geopolitical uncertainty.
Speaker Change: Did your install base.
Speaker Change: Yes.
Speaker Change: Wanted to come back actually to the Robo taxi Dan.
Speaker Change: You have a sense on and how many cars are how big the scale will be initially and how that might ramp up I know you're targeting millions of vehicles in the second half kind of next year, but initially at launch.
Speaker Change: Many vehicles would be reasonable and is it going to be as simple as if one goes to Austin, let's say in late June or July you'd be able to to request.
Speaker Change: Yes.
Speaker Change: We're still debating the exact number to startup what day, one but its I don't know, maybe 10 or 20 vehicles a day one.
Speaker Change: And.
Speaker Change: Watch it carefully the scale it up.
Speaker Change: Quickly after that.
Speaker Change: So.
Speaker Change: We want to make sure that we're paying very close attention to the first time this happens.
Speaker Change: But yes, you will.
Speaker Change: End of June or July corrosion and what our Tesla.
Speaker Change: One of those drugs.
Speaker Change: Great and the next question comes from George at Canaccord.
George: Hi, Thank you for taking my question.
Speaker Change: Has to do with FSD pricing can we envision.
Speaker Change: When you launch unsupervised FSD that there could be sort of a multi tiered pricing approach to unsupervised versus supervise similar to what you did with autopilot versus FSP in the past. Thank you.
Speaker Change: I mean, this is something which we have been thinking about I mean, just really now for people who have been crying F&B and who've been using SSD.
Speaker Change: Given the current pricing is too cheap.
Speaker Change: Yes.
Speaker Change: 99 Bucks.
Speaker Change: Basically getting a bushnell sure yes.
Speaker Change: Yes.
Speaker Change: We do need to give people more time to.
Speaker Change: They want to look at.
Speaker Change: A key breakpoint is cable reader text messages Omar.
Speaker Change: Can you write a text message.
Speaker Change: Obviously people are doing this by the way with an autonomous trucks, all the time and.
Speaker Change: And if you could just cover drive down the highway and Youll see people texting while driving.
Speaker Change: <unk> hundred 80 miles, an hour and Clinton and components.
Speaker Change: Yes.
Speaker Change: But depending on makeup during their hair with them mirrored down.
Speaker Change: And <unk>.
Speaker Change: Texting and driving at 80 miles there.
Speaker Change: This is a common occurrence.
Speaker Change: So sure.
Speaker Change: Youll hear getting launched you name it.
Speaker Change: Shaving.
Speaker Change: Yeah.
Speaker Change: So.
Speaker Change: Hey, David.
Speaker Change: Right now the car is.
Speaker Change: Barrett assistant that you pay attention to the road.
Speaker Change: So which.
Speaker Change: For.
Speaker Change: Producers are value somewhat.
Speaker Change: It's Barry.
Speaker Change: Rigorous about paying attention to the road.
Speaker Change: Gradually lightened up on that with.
Speaker Change: Every every few weeks or every month.
Speaker Change: Relax that a little bit makeup.
Speaker Change: So you can be more and more.
Speaker Change: Able to do things you wanted to do.
Speaker Change: And not have the card to manage originally attention.
Speaker Change: So.
Speaker Change: Value.
Speaker Change: It'll really be profound when you can basically do whatever you want.
Speaker Change: Including sleep.
Speaker Change: And that $99 <unk> seem like the best moment in Das.
Speaker Change: Good.
George: Great and George that you can follow up.
Speaker Change: My follow up is about geographic expansion, just maybe discuss additional markets. There's been some news around India recently that you could launch this year and next thank you.
George: So yes.
George: <unk> been working on getting into India, India is a very hot market.
George: And especially the current I don't want to.
George: Talk just about tenants, but the current debt structure was Indians that any car, which we send then is subject to 70% tariff.
George: Also more than 20%.
George: In our luxury tax at Nashville.
George: The same Congress representing.
George: 100% more expensive than what attached so that creates a lot of angst.
George: Anxiety is link.
George: People feel okay as being too much about the car and they're not getting the money local government is getting the money.
And that's why we've been very careful.
George: Trying to figure out when does the lifetime.
George: Like I said, we are working on it it's a great it would be a great market to enter because it is a big middle class, which we would want to tap in tatters market, which we want to be in but again these kind of things create a little bit of tension, which we're trying to walk around.
Speaker Change: Great. Thank you so much. The next question comes from Adam Jonas at Morgan Stanley.
Speaker Change: Go ahead Adam.
Speaker Change: We can hear you Adam so many will put you back in the queue and we'll move to Colin Langan from Wells Fargo.
Speaker Change: Adam figures avenues.
Speaker Change: Yes.
Speaker Change: Colin please limit yourself.
Speaker Change: Great to hear me.
Speaker Change: Yes, okay.
Speaker Change: You are still sticking with division only approach a lot of autonomous vehicles, you don't have a lot of concerns about sun glare fog and dust.
Speaker Change: Any color on how you anticipate on getting around those issues because I my understanding of kind of blind with a camera when you get clearance stock.
Speaker Change: Actually it does not bind the camera.
Speaker Change: <unk>.
Speaker Change: We use it.
Speaker Change: An approach which is.
Speaker Change: Direct vote upon count so when you see.
Speaker Change: A processed image so the image that goes from me.
Speaker Change: Okay.
Speaker Change: Photon counting or.
Speaker Change: So the silicon the silicon photonic counter.
Speaker Change: It goes through a digital signal.
Speaker Change: For image signal processor.
Speaker Change: That's the only what happens and then debt.
Speaker Change: The image that you see looks all washed out because if it's to your point the camera at the Sun.
Speaker Change: Yes.
Speaker Change: The post processing of the photon counting.
Speaker Change: Washington things out of it.
Speaker Change: <unk> adds noise.
Speaker Change: So.
Speaker Change: Quite a big breakthrough that we made some time ago was to go with direct photon counting.
Speaker Change: By pass the image signal processor.
Speaker Change: And.
Speaker Change: And then you can drive pretty much straight at the Sun and you can also see.
Speaker Change: What appears to be the buckets to banks.
Speaker Change: And then Gary.
Speaker Change: And five we can see as well as.
Speaker Change: Okay people kennan.
Speaker Change: Any better but okay.
Speaker Change: In fact slightly better than people.
Speaker Change: The Mavericks person anyway.
Speaker Change: And.
Speaker Change: Yeah.
Speaker Change: So the camera is able to see when it's direct glare on it.
Speaker Change: Yes.
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change: And then just sit.
Speaker Change: Sydney airport's the other day that the affordable model was delayed doesn't sound like that's correct. Those reports also talked about it being more of a.
Speaker Change: Cheaper version of the model Y any color on what we should expect as at a cheaper version of a mono line or is that actually going to be a design change with that.
Speaker Change: So I think loss all of the color that in answering one of the state Dot com cautions the real thing, which we are trying to focus on is affordability.
Speaker Change: And using our existing lines and there's always limitations and you're using the existing lines as to how many different form factors can you think too.
Speaker Change: So.
That's the way I would say you should think about it the last time.
Speaker Change: I think I've said this before in other calls link.
Speaker Change: With the recent upgrades to on the luxury and Huawei platforms, you need some pretty great cars pretty big prices and nonstrategic areas and things like that I think it's easy to consider that in moving forward to so it doesn't make tank cars and we always bank.
Speaker Change: Our intent is not to make the carloads any worsening.
Speaker Change: Produced in the past.
Elon Musk: And the models that come out and excellence will be built on our lines and will resemble to form and shape. The cars. We currently make in but the key is that there'll be affordable and you'll be able to buy one.
Speaker Change: Great.
Speaker Change: We might have time for one last question, Adam we'll try your audio again.
Speaker Change: I'm going to turn it on yourself Adam.
Speaker Change: Alright, Unfortunately still not working.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Alright, guys.
Speaker Change: Technology.
Speaker Change: Go ahead.
Speaker Change: Yes, Hi, yes in the February 2008, Joe Rogan interview.
Speaker Change: Ron you advocated for a ramp in tariffs to give people time to adjust otherwise on the call you said the system would break.
And bad things would happen so are things breaking yet.
Speaker Change: And if the announced as if the tariffs as announced remain in place when would things start breaking.
Speaker Change: Well at the risk of stating the obvious I hope I am not I.
Speaker Change: One of many advisors to the president I'm not the president.
Speaker Change: No.
Speaker Change: And but.
Speaker Change: Great.
Speaker Change: Opinion creates the president and.
Speaker Change: Sure.
Speaker Change: Pat.
Speaker Change: Yes.
Speaker Change: People made their opinion compared to the president.
Speaker Change: He talks to many people.
Speaker Change: And he makes his decision and.
Speaker Change: Im hopeful that present will observe whether my predictions are more accurate than the predictions of others and perhaps we're at my advice.
Speaker Change: Differently in the future we shall see.
Speaker Change: But.
Speaker Change: I'm an advocate of.
Speaker Change: Predictable tariff structures.
Speaker Change: And generally in the past.
Four.
Speaker Change: Pre trade and lower tariffs.
Speaker Change: Now when it does need to take a look at.
Speaker Change: Yes.
Speaker Change: Some countries doing something credit credit, scoring with tariffs or is providing extreme support for.
Speaker Change: If a governance, providing extreme credentials port for a particular industry.
Speaker Change:
Speaker Change: You have to do something to counteract that.
Speaker Change: So, but I think that's on a case by case basis strategically.
Speaker Change: But.
Speaker Change: On the.
Speaker Change: The president's be elected representatives people in as well.
Speaker Change: Fully within his rights to do what he would like.
Elon Musk: Okay Elon.
Speaker Change: I respect that.
Speaker Change: Alright.
Speaker Change: Follow up and thanks again between between China, and the United States.
Speaker Change: So in your opinion is further ahead on the development of physical AI.
Speaker Change: Typically on humanoids.
Speaker Change: And also drones I'd be interested in is it even close and kind of help.
Speaker Change: Yes.
Speaker Change: Just curious.
Speaker Change: Drones.
Speaker Change: Yes.
Speaker Change: [laughter].
Speaker Change: Yes.
Speaker Change: Brendan might evolve.
Speaker Change: On X.
Speaker Change: I requested it.
Speaker Change: So I think a prophetic statement, which is any country that cannot.
Speaker Change: Manufacturers on drones.
Speaker Change: <unk> to be the best in state or any country that Ken.
Speaker Change: And we can't American cannot currently manufacturers on drugs.
Speaker Change: But that's again.
Speaker Change: Fortunately.
Speaker Change: So.
Speaker Change: And I believe manufacturers about 70% of our drugs and if you look at the total supply chain. China is almost 100, almost 100 sender groans are have a supply chain dependency on the planet.
Speaker Change: So China is in a very strong position.
Speaker Change: And.
Speaker Change: Yes, right here in America.
Speaker Change: We need to.
Speaker Change: Just more of our people and resources to manufacturing.
Speaker Change: Because the spaces.
Speaker Change: Can I have a lot of respect for China.
Speaker Change: China's amazing actually.
Speaker Change: But.
Speaker Change: The United States should not have such a severe dependency on China for.
Speaker Change: Drones and be unable to make them.
Speaker Change: Unless.
Speaker Change: Try and gives us the parts, which is currently the situation.
Speaker Change:
Speaker Change: With respect to humanoid robots.
Speaker Change: Hi.
Speaker Change: I.
Speaker Change: I don't think there is.
Speaker Change: Any company in any country.
Speaker Change: That can match Tesla.
Speaker Change:
Tesla and Spacex.
Speaker Change: Sure.
Speaker Change: Number one.
Speaker Change:
Speaker Change: So.
Speaker Change: And then no.
Speaker Change: I'm a little concerned that.
Speaker Change: On the visa board.
Speaker Change: <unk> two through 10 will be Chinese companies.
With that covenant that ranked one will be Tesla.
Speaker Change: Great.
Speaker Change: Well I think thats. Unfortunately, all the time, we have for today and we appreciate all your questions and look forward to talking to you next quarter. Thank you very much and goodbye.
Speaker Change: Okay.
Yes.
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: Yes.
Speaker Change: Yes.
Speaker Change: Yes.
Speaker Change: Yes.
Speaker Change: Yes.
Speaker Change: Yes.
Speaker Change: Yes.
Speaker Change: Sure.