Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:01):
Hey everybody, welcome back to the Elon Musk Podcast.
This is a show where we discuss the critical crossroads, the
Shape, SpaceX, Tesla X, The Boring Company, and Neurolink.
I'm your. Host Will Walden.
Good afternoon, everyone, and welcome to Tesla's second
quarter 2025 Q&A webcast. My name is Travis Axelrod, Head
(00:25):
Investor Relations and I'm joined today by Elon Musk,
Vivatineja and a number of otherexecutives.
Our Q2 results were announced atabout 3:00 PM Central Time in
the update deck be published at the same link as this webcast.
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.
(00:47):
Actual events or results could differ materially due to a
number of risks and uncertainties, including those
mentioned in our most recent filings with the SEC.
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 buttonto join the question queue.
Before we jump to Q&A, Elon has some opening remarks.
(01:09):
Elon, thanks drives. So we've had a very exciting
quarter. The we're able to successfully
launch robo taxis, so providing our first drives with no one in
privacy with paying customers and Austin and as some may have
noted, we've already expanded our service area in Austin.
(01:32):
It's bigger and longer and and it's going to get even bigger
and longer. We were expecting to really
greatly increase the motion service area to well in excess
of what competitors are doing and that's hopefully in a week
(01:54):
or so, two weeks. Yeah, A.
Couple of weeks, a couple of weeks or so and and then we're,
we're getting the regulatory permission to launch in the Bay
Area, Nevada, Arizona and a number of and Florida, a number
of other places. So as soon as we get the
(02:17):
approvals and we improve our safety, then we'll be launching
the autonomous ride hailing and most of the country.
And I think we'll probably have autonomous ride hailing in
probably half, half the population of the US by the end
of the year. That's, that's at least our goal
(02:37):
subject to regulatory approvals.I, I, I think we'll technically
be able to do it. So assuming regulatory
approvals, it's probably addressing half the population
of the US by the end of the year.
But we, we, we are being very cautious.
We don't want to take any chances.
And so we're good, we're going to yeah, go, go cautiously.
(03:02):
But but it's the service areas and the number of vehicles in,
in operation will increase at a hyper exponential rate.
So, you know some other notable things.
Model Y in June became the best selling car in Turkey,
(03:23):
Netherlands, Switzerland and Austria.
It is, I believe the best selling car of any kind in the
world still. And autonomy is a is a big
factor there. So even without even accepted,
even without supervised, even with just supervised self self
(03:46):
driving, it's a huge selling point.
And it's worth noting that we donot actually yet have approval
or supervised FSD in in Europe. So our sales in Europe we think
will improve significantly once we are able to give customers
(04:07):
the same experience that they have in the US.
This is my, this is I think a very important point to convey.
And we've been working with maincountry regulator, which is the
Netherlands. And I think we're close to
getting approval of Netherlands.Then it's got to go to the EU.
(04:27):
It's quite a, you know, Kafkaesque.
In fact, Kafka had no idea that's something like the EU
could exist beyond Kafkaesque challenges with bureaucracy.
But it will, we will get the approvals and I think we'll get,
you know some people in Europe will have experience, some of
(04:47):
them have the US in most of Europe, you know this year
hopefully at least partially in this quarter.
And then we also have some regulatory, regulatory
challenges in China which we're hoping to unblock shortly where
we because we also cannot provide supervised investee in
(05:10):
China currently. Are we going to unblock that
suit And that's also that's another major, it's really is
the single biggest demand drive.And then within the US, as we
get confident about safety in different geographic areas, the
will be, it will loosen up on how much somebody has to be
(05:39):
laser focused, have their eyes laser focused on the road.
You know, it's, that's, that's been a common complaint.
In fact, it it does create an open odd, odd safety issue where
people will sometimes disengage autopilot, then then do
something, change the radio or maybe look at the phone drive
(06:02):
with your knee and then reengageautopilot, which obviously is
not is less safe than simply keeping autopilot on.
So anyway, we're get that that that experience will will
improve in in the next several weeks.
The the because of our focus on Austin with the one driver's
(06:25):
seat, the production release of Autopilot is and actually
several months behind what people experienced on a robotax
in Austin. So now we have the robotax in
Austin launched will be providedadding back those elements so
that there will be a step changeimprovement in the water pilot
(06:47):
experience for people outside ofAustin.
This is really, as you can tell,this is very much sort of
autonomy is, is the story like we need the we need the physical
product, without which you cannot have autonomy.
But once you have a physical product, you need the autonomy
is what amplifies the value to stratospheric levels.
(07:14):
We also launched the Tesla Diner, which has been a huge
hit. It actually got worldwide
attention, which is unusual for a diner.
Datas don't typically get headline news around Earth, but
this is a pretty special diner and if you're in the LA area,
it's worth visiting. It's sort of a shiny beacon of
(07:38):
hope and but not otherwise sort of bleak urban landscape,
frankly. So it's really quite a lovely
experience. Great job by the team there on
the full stop driving front continue to worry about that we
have we're continuing to make a significant improvements just
(08:01):
with the sock rate. So the we're expecting to
increase the parameter count. Actually, at this point, I think
we think we can probably 10X that one was 10X the power
front. Yeah, roughly, roughly 10X the
(08:22):
parameter count. So this is actually a very
tricky thing to do because if you as you increase the
parameter count, you get, you get choked on memory bandwidth.
But we currently think we can 10X the parameter count from
(08:43):
what people are currently experiencing.
That's, that's so not, not just the Forex actually 10X increase
in private. And yeah, so, so there's still a
lot of improvement on the existing hardware to, to, to
happen. Energy is growing really well
(09:06):
despite headwinds from tariffs and spare supply chain
challenges. The Megapack is expanding
capacity quickly and and we haveupgrades the mega pack that
would make it even better and wehad record Powerwall deployment
gain in Q2. So I think batteries are going
(09:29):
to just going to be a massive thing that the scale of
batteries, battery demand is. I think not that many people
appreciate just how gigantic thescale of battery demand is.
The way you think about it is that the US sustained power
output for the US grid is around1 terawatt, but average usage is
(09:56):
less than half a terawatt. If you add batteries to the mix,
you can run the power plants 24/7 at full capacity, thus
doubling, more than doubling theenergy output per year of the
United States just with batteries.
But that's a good big deal. It's a really big deal, Optimus.
(10:25):
So we're revolving the Optimus design and really getting
Optimus to the point where it isa phenomenal design.
We're an Optimus version to right now sort of 2 1/2.
Optimus 3 is it is an exquisite design in my opinion and will be
(10:49):
an incredible as I've said many times before, it predicted it
will be the biggest product ever.
It's a very hard problem to solve.
You have to design every part ofit from physics, first
principles. There's nothing that's off the
shelf that actually works. So you can design every motor,
gearbox, power electronics, control electronics, sensors,
(11:16):
the mechanical elements. We've also got to train
Optimists to use its lens and its sensors with a neural net.
But we'll be applying the same techniques we're applied for a
car, which is essentially A4 wheel robot and Optimist is a
(11:39):
robot with arms and legs. So the the same principles that
apply to optimizing AI inferenceare the car applied to optimates
because they're both really robots in different forms.
And and Tesla, it is important to you know that Tesla is by far
the best in the world at real world AI like like a clear proof
(12:04):
point for that be if you compareit to Tesla to Weymouth,
Weymouth's got you know, the caris best doing with God knows how
many sensors. And yet isn't Google good at AI?
Yes, but they're not good at real world AI.
Thus far they have Tesla is actually much better than Google
by far and any much better than anyone at real world AI.
(12:27):
And and by far Tesla has the best the best inference
efficiency. Like the key figure for AI is
what is the intelligence per GB?And people talk about
parameters, blah, blah, blah. But I think we'll just talk
about stop talking about parameters and talk about
gigabytes because with the parameters, you can have 4 bit
(12:50):
parameters, 8 bit parameters, 16bit parameters.
But the actual constraints in the hardware are how many
gigabytes of RAM and how many gigabytes per second can you
transfer from RAM. Therefore, it is not a parameter
constraint. There's it is a, there's a byte
constraint and Tesla has the highest intelligence density of
(13:13):
any AI by far. And I have a lot of insight into
this with XAIXAI is, you know, Grok is the smartest AI overall,
but it's a, you know, Grok 4 is a giant beast actually with the
TB level. And so kind of a important to
(13:38):
note, Tesla has the best intelligence density.
Intelligence density will be a very big deal in the future.
It is now. So with Optimus 3, which is
really the right design, It's like it doesn't have at this
point, there's no significant flaws with the Optimus 3 design,
(14:05):
but it it, we are going to retool a bunch of things.
So it's it'll probably be prototypes of Optimist 3 end of
this year and then scale production next year.
We're going to try to scale Optimist production as fast as
it's seemingly possible to do. So try to get to 1,000,000 units
a year as quickly as possible. You think we can get there in
(14:34):
less than five years? It's nice to sort of I guess
that that's a reasonable aspiration is 1,000,000 units in
your five years, it seems like an achievable target.
In conclusion, so far 2025 has been a very excited year, a lot
(15:03):
of major milestones. We've made clear demonstrable
progress in autonomy that's a lot of naysayers said we would
not achieve. And it's worth noting that the
we have done what we said we're going to do.
I mean, we're always on time, but we get it done and our
(15:23):
naysayers are sitting there withegg on their face.
So great, great, great progress by this as a team.
Yeah, I do think if Tesla continues to execute well with
(15:45):
big autonomy and and like humanoid robot autonomy, it will
be the most valuable company in the world.
A lot of execution between here and there doesn't just happen,
but provided we execute very well, I think Tesla has a shot
(16:08):
at being the most valuable company in the world.
Obviously, I'm extremely optimistic about future of the
company. Best way to predict the future
is to make it happen, and we're making it happen here with Tesla
team. So I'd just like to say thanks
to all of our supporters and I think we're going to tell you an
(16:31):
incredibly exciting future. Great.
Thank you very much. Elon and Bedlock has remarks as
well. Tavis, as Elon mentioned and Q2
was an interesting quarter in a few respects.
We started ramping up the production of the new Model Y at
all our factories. We rolled out our robotaxi
service in Austin and delivered a car completely autonomously
(16:54):
from directly from the factory to the customer's home.
It is a Seminole point. Get to this thing.
I mean, it took a lot of effort and I really want to thank
everybody at Tesla to make this happen.
It wasn't an easy thing to do, but we did it.
It took time, but we've just begun the next phase for the
(17:17):
company. The one big bill has a lot of
changes that would affect our business in the near term.
The first among those changes isthe repeal of the higher EV
credit of 7500 by the end of this world.
Given the abrupt change, we havelimited supply of vehicles in
the US this quarter as we have already with the lead times to
(17:38):
auto parts to build cars. We've rolled out all our planned
incentives already and we'll start paying them back as we
start to sell. If you're in the US and looking
to buy a car, this around now aswe may not be able to guarantee
delivery orders placed in the later part of August and beyond.
The will also make changes to certain emission standards by
(18:01):
reducing the amount of penalty to 0.
This in turn will have an impacton the new sales of regulatory
credits to other OEMs and in turn will lead to lower
revenues. When we now plan our business
around such sales, it will nonetheless impact our total
revenues. Quite false.
(18:22):
On our automotive product portfolio, the entire line up is
updated globally, we're seeing an increase in the number of
test drives. We started the production of the
lower cost model as planned in the first half of 25.
However, given our focus on building and delivering as many
vehicles as possible in the US before the EV credit expires and
(18:44):
the additional complexity of ramping a new product, the ramp
will happen next quarter slower than initially expected.
One thing which is grossly and appreciated and Elon talked
about it is that all our vehicles in the lineup are
capable of a dump. This is by far the biggest
differentiator between US and the competition.
(19:06):
Our vehicles top safety standardas is, but with FSD they are and
will continue to set a new standard for safety within
vehicle transportation. We published our vehicle safety
report earlier today and you cansee the car on FSD is 10X safer
than the car not on FSD. We've started seeing an uptick
(19:29):
in FSD adoption in North Americain recent months, which is a
very promising trend. And just to give you
perspective, you know since the launch of since we moved to
version 12 of FSD, we've seen the adoption rates really
increase. We've started seeing the on the
(19:51):
automated revenue front despite reduction in regulatory credit
revenue and the total automotiverevenue increased by 19%
sequentially. Even the total deliveries only
improved 14%. This was primarily due to an
improved ASASPS because of the new Model Y.
(20:13):
This had been improving margin sequentially as well.
Along with improved mix and higher cost fixed cost
absorption, despite an increase in cost of tariffs, we started
seeing the impact of tariffs in our PNL.
Sequentially, the cost of tariffs increased around 300
million with approximately 2/3 of that impact in automotive and
(20:36):
rest in energy. However, given the latency in
manufacturing and sales, the full impacts will come through
in the following quarters and socost will increase in the near
term. While we are doing our best to
manage these impacts, we are in an unpredictable environment for
the tire front. The margins for the energy
(20:57):
generation and storage businesses improved sequentially
while deployment reduced primarily due to the ramp of
power deployments. At higher margins, we were able
to achieve our highest gross profit for the business yet.
Note that the overall deployments will continue to
vary quarter to quarter. Thinking on covered this that
(21:19):
you know industrial storage willmake a difference in this drive
towards AI and data center growth.
The energy requirements are increasing at a rapid scale as
application as AI applications are very energy hungry.
The quickest path to scale up energy is deploying storage.
This is something that our customers have started
(21:40):
realizing. And despite this business having
the largest impacts from tariffs, we're seeing customers
willing to accept some of the tariff impacts.
The big bill has certain adverseimpacts even from the energy
business, most notably on the residential storage business due
to the early expiration of consumer credits by the end of
(22:02):
this year. The challenges of the storage
business therefore remain both from the bill and from the
tariffs and we're doing our bestto try and manage through this,
but it will we will see shifts in demand and profitability.
The margins for our service and other businesses improves
(22:23):
sequentially primarily due to higher profits from
supercharging and improvement ininsurance and service center
profitability. Operating expenses also grew
sequentially as we continued ourinvestment in AI projects
including additional expenses related to employee related
costs including higher stock based compensation and
(22:44):
depreciation for AI compute. Our operating expenses
especially R&D related spend will continue to grow.
We believe even in the current environment it is the right
strategy to keep making investments in these areas to
position us for the long term. Other income grew sequentially
(23:05):
primarily from the mark to market adjustment on Bitcoin
holdings which was 284,000,000 gain in Q2 while being 125
million loss in Q1. Just wanted to remind people
that this would keep keep creating volatility based on the
Bitcoin price while other while operating cash was increased
(23:27):
sequentially, so did our CapEx resulting in 146 million of free
cash flow. We continue to make investments
in various aspects of manufacturing like cybercap,
semi mines and other manufacturing spend and the
expansion of our AI initiatives.Our latest expect expectation
for the year in terms of CapEx is in excess of 9 billion.
(23:52):
To summarize, we have near term challenges in our business due
to the negative impacts of the bill and tariffs.
However, the investments that wehave made for AI, robotics and
our lead in energy sets us up for a bright future.
I would like to thank the whole Tesla team, our customers, our
(24:12):
investors and supporters for their continued belief in US.
Great. Thank you very much.
So now we're going to move on tosay.com questions.
The first question is, can you give us some insight how
robotaxis have been performing so far and what rate you expect
to expand in terms of vehicles, geofence, cities and?
Supervisors. Yeah, Robotaxi has been doing
(24:36):
great so far in Austin. Customers really love the
experience. Like super small, very safe and
like just a great experience overall.
And we already did the first dayof expansion in Austin and we
continue to expand in Austin to probably more than 10X our
current operating region. We're also testing in a lot of
(24:56):
other cities. As I mentioned, the next thing
to expand would be in the San Francisco Bay Area.
We are working with the government to get approval here.
In the meanwhile, launch the service with the person in the
driver's seat just to expedite. And while we wait for regulatory
approval, we're also testing a lot of other cities in the US
(25:18):
including Florida, Nevada, etcetera.
Great. Thank you very much, Ashok.
The next question is what are the key technical and regulatory
hurdles still remaining for unsupervised FSD to be available
for personal? Use can.
You provide a timeline. First, let me getting there.
(25:46):
I think it's it'll be available for in supervised personal use
by the end of this year in certain geographies.
We're just being very careful about it, so.
This is not something which we want to rush, no, we want to
make sure that everything is safe before we met it.
Hopefully available broccoli. Yeah.
We're just being extremely paranoid, Yes.
(26:08):
But I'd be, I'm confident that by the end of this year, within
a number of cities in the US, we'll it'll be available to end
users like. Yeah.
Yeah. And for what I suppose is the
same a hardware in the Austin robot XD vehicles as some
(26:30):
customer vehicles and they deliver a car autonomously from
the factory to a customer this quarter, Yes and every test and
manufacturer in the US and in Europe autonomously drives
itself from the end of time to the.
Loading. Docks and it, so it's just the
software. Beta, yeah, I think we'll be,
we'll end up delivering cars in the great Watson area and the
(26:54):
Bay Area by default from the factory by the end of this year.
Like a car will deliver itself to your, to where you are,
unless you say you don't want that.
It'll be super cool, yeah. Great.
Thank you guys. The next question is what
specific factory tasks is Optimus currently performing and
what is the expected timeline for scaling production to enable
(27:16):
external sales? How does Tesla envision Optimus
contributing to revenue the next2-3 years?
Yeah. So the Optimus 3 design, as I
mentioned earlier is I think finally the right design, the
way further optimizations, but there are enough fundamental
changes to that are needed or the Optimus 3 design, it has all
(27:38):
the degrees of freedom that you really want or need.
So it's, you know, we'll have prototypes of that and I don't
know, three or three months and it's subtly in production.
We'll certainly start productionon that in the beginning of next
year. The production ramp is simple.
(27:59):
It's always simple to predict the ES curve of your production
ramp when something has got an entire, when everything is new
because the rate of productions will move as fast as the least
lucky and least confident element of the entire supply
chain as well as in internal processes.
(28:19):
So the more new stuff that is ina product, the slower the ramp
could be because of unexpected supply chain interruptions or
mistakes made internally especially easy to predict sort
of the the end of the of the S curve or late in the S curve
(28:40):
than the beginning of the S curve and the beginning of the S
curve of the production route isin any case not really material
for revenue purposes. The beginning of the S curve
key, if you're usually not usually yours negative gross
margin and you're debugging a lot of issues.
So that's why I like it's, it's,I feel like fairly confident
(29:07):
predicting things or at least medium confident in predicting
where we are in five years. But it's hard to predict where
we are in a year or two years. So that's why I think five
years, I think we could be at the, let me look at this, I'd be
(29:28):
surprised if at the end of five years, you know, 60 months from
now, if we are not roughly making 100,000 Optimus robots in
month, in 60 months, I would be shocked.
All righty. Thank you very much.
Next question is, can you provide an update on the
(29:48):
development and production timeline for Tesla's more
affordable models? How will these models balance
cost reduction in profitability and what in fact do you expect
on demand in the current economyclimate?
Well, I, I think Bailout did a good job of answering this
question in his opening remarks.As we said, we started
production in June and we're ripping quality bills and things
around the corner. And given the that we started in
(30:10):
North America and our goal is tomaximize production with an IRA
for pending Q3, we're going to keep pushing hard on our current
models to avoid complexity. Unfortunately that rolls away.
We'll be running with the more affordable models available for
everyone in Q4. And you know the goal of those
products was not to negatively impact revenue or or gross
(30:31):
margin, but just to make a car that everyone loves and wants at
a more affordable price. Great.
Thank you, Lars. The next question is, can you
talk about the benefits of Teslainvesting in XAI?
This is not the forum to discussthis topic.
I mean like if, if there is something which we need to
(30:53):
discuss, we'll discuss it separately.
I think obviously you know we'rea publicly traded company.
Shareholders are welcome to put forward any shareholder
proposals that they'd like. I've recently encouraged that
and and then have shareholders vote and we'll act in accordance
with the shareholder wishes. Great.
(31:15):
Thank you very much. The next question is, can you
tell us a little bit more about what goes on in the Tesla design
studio do? You want me to take that one?
We kind of generally say that what happens in the studio stays
in the studio and that, you know, earnings calls are not the
(31:36):
place to disclose new product stuff.
But we're, you know, we're working to make sure that we
have an exciting future for for our Tesla and our and the
product lineup. Yeah, there's a lot of exciting
things happening in the design studio.
It's not like static. And really what's going to
happen over the next several years is a fundamental
(31:57):
transformation of the company from a pre autonomy wall to a
post autonomy. And I'm working on a new master
plan to articulate that as a team.
And there will be some teething pains as you transition from
(32:22):
free autonomy to the post autonomy world.
But I think the future version for Tesla is incredibly exciting
and will profoundly change the world in a good way.
So you sound like sort of time for whatever, but I, I think if
what let's just say if we execute on that plan
(32:43):
effectively, which is you have to actually do that, Tesla will
be the most valuable company in the world by far.
Great. Thank you.
The next question is actually a duplicate on unsupervised set of
Steve customer vehicles. We'll escape that.
And after that is are there any news for hardware 3 users
(33:03):
getting retrofits or upgrades? Will they get Hardware 4 or some
future version of hardware? 5.
I mean, what we want to do is wewant to get unsupervised done on
hardware for first. Once it's done, then we'll go
back and look at what we need todo with the hardware 3 cars.
I mean the like I said, the focus is first to get
(33:24):
unsupervised out and then we'll go back and see what more work
you need to do. Great.
The next question is can you give an update on Dojo and could
xai be a customer for Dojo? Dojo 2.
(33:47):
We expect to have Dojo 2 operating at scale sometime next
year with scale being somewhere around 100 KH 100 equivalents
and and then AI 5, which is really spectacular to use those
(34:10):
words. Likely spectacular to the AI5
chip will be hopefully be in buying production around the end
of next year. But that has a lot of potential.
I think, you know, thinking about Dojo 3D and the AI6
inverse chip, it seems like intuitively we want to try to
(34:36):
find convergence there where it's basically the same chip
that is used. What we use say two of them in a
car or optimist and and maybe a larger number on a on a board, a
kind of 512 on a board or something like that.
(34:58):
If you want high bandwidth communication between the chips,
how to force serving during doing it?
Burn serving. That sort of seems like
intuitively the sensible way to go.
Great. The next set of questions have
(35:19):
all actually been covered. So we'll, we'll end with how
will the BBB elimination of tax credits for solar projects
affect your sales pipeline for Megapack?
Yeah, our, our sales pipeline is, is quite diversifying across
customers and market segments. So we aren't heavily weighted in
Megapack projects that are paired with solar.
(35:39):
And as we talked about in the opening remarks, we're seeing
storage quickly being recognizedfor its ability to unlock grid
efficiency and how quickly it can be deployed to help the
grid. Additionally, although the
recent bill was not favorable towards solar, we, we believe
solar projects will still get built because the energy is
necessary. The projects are well developed
and they're ready for execution and there's really no
(36:01):
alternatives in the near term given gas turbine lead time and
pricing. We also can continue to see
growth in the data center segment and in stand alone
storage projects providing capacity to the grid in several
markets across the US Overall, we're forecasting a very strong
second-half of the year as we increase deployments.
And lastly, we we continue to invest heavily in US
(36:23):
manufacturing to mitigate policyand tariff impacts, expecting
our first LFP cell manufacturingfacility to be online by the end
of the year and launching our third mega factory near Houston
and 2026. Great.
Thank you, Mike. We will now be moving to analyst
questions. The first question comes from
Emmanuel Rosner at Wolf Research.
(36:45):
Emmanuel, please feel free to unmute yourself whenever you're
ready. Great.
Thank you so much. Can you hear me?
Yeah, thanks. So, Elan, are you able to share
any KPIs with us in terms of therobo taxi business, how many
vehicles are you operating, miles driven autonomously or the
(37:08):
number of safety critical intervention?
Just curious, you know how to roll out, is it generally is
going in and any sort of like targets that you could share
more broadly? Sure, Jonah.
Yeah, we have. You know, more than 7000 miles
operating in Austin area. It's you know, just because
(37:28):
services new via a handful of vehicles right now, but then
we're trying to expand the service in terms of both the
area and also the number of vehicles both in Austin and
other locations. So far, you know, the there's
like no notable critical influence there.
You know, sometimes we have our own restrictions as to for
(37:49):
example we resting towers speedylimit to 40 mph and the vehicle
wants to go on like higher speedor we can stop the vehicle, but
those are a lot of convenient asopposed to safe and critical
nature. So for the service that has been
really well received and we continue to expand on it.
Great. And that, yeah, longer term from
(38:14):
an economics point of view, longer term, you've previously
talked about working to drive down the cost per mile on the
robo taxis maybe towards 30 or $0.40 per mile over time.
Now that your service is live, how should we think about the
main milestones to getting there?
Yeah. Well, the the cyber Cab is which
(38:36):
is really optimized for autonomythat that I think has got to
probably sub 30 cent per mile potential over time, maybe 25.
You know, it's, it's really likeif you design A car from scratch
(38:57):
to, to be a cost optimized robotic taxi, like cyber cab,
you know, you like, for example,we're not trying to make it, you
know, corner like a like incredibly well, like a model 3
would or Model S or even model Ylike it's got model, you know,
(39:20):
model all of our, all of our cars that are driven by people
are super fun to drive. They've got incredible
acceleration, you know, the incredible cornering capability.
But we're confident that very few people in a cybercap want to
be huddling around. So, you know, so we were, we
(39:41):
reduced the top end speed, whichmeans we can use more efficient
tires. We don't need as much
acceleration. We don't need as much, you know,
big brakes to sort of we want stopping distance, but we're not
expecting it to be heavily used.It's, it's a gentle ride.
Essentially, if you design it for a gentle ride and then you,
(40:07):
you have a. A much more optimized design
point so that that's why it seems probably we could achieve
that, especially if optimist is,you know, so it's serving
cleaning up the car and make doing maintenance and stuff and
it's, you know, doing automatic charging.
(40:31):
So I think it's going to the actual cost per mile of Cyber
Cab will be very low. The cost from Wells, our
existing fleet will be higher, but still very competitive.
So yeah, maybe some number of $0.50 in viscosity, Yeah.
(40:55):
So this really Tails Rd. Taxi fleet will go from tiny to
gigantic in terms of operations in pretty short period of time
like my guess is as it has a material impact on our
financials around the end of next year.
(41:17):
Great. Thank you very much.
The next question comes from Adam at Morgan Stanley.
Adam, please unmute yourself. Great.
Hello, everybody. So Elon, as Tesla moves into
this next phase of physical AI, autonomous humanoids, robotaxis,
etcetera, world changing, civilizational species changing
(41:41):
technology with dual purpose, are you comfortable moving Tesla
in this direction while only having a 13% stake in the
economy, sorry in the company, is that sustainable or does he
still insist that something needs to happen given, you know,
your current lack of control on the types of technologies you're
getting into? Yeah, that that, that is a a
(42:06):
major concern for me, as I've mentioned in the past and I hope
that is addressed at the upcoming shareholders meeting.
But yeah, it is a big deal. Like, you know, I want to find
that I've got like so little control that I can easily be
ousted by activist shareholders after having both, you know,
these these army of humanoid robots.
(42:28):
I think that, as I've mentioned before, I think my control of a
Tesla should be enough to ensurethat it goes in a good
direction, but not so much control that I can't be thrown
out if I go crazy. OK, Elon, and you're not going
to go crazy. We, we, we, we trust you.
(42:48):
You can stay a little crazy. A little crazy is OK, Elon,
though we understand the the board of directors of a major
U.S. investment bank recently toured Optimist production.
That's, I don't know if you wantto confirm that or not.
It's just what we've heard. That's cool.
But when do you think others will be able to get a first hand
(43:10):
view of Optimists like that? And is the second-half of this
year too soon to have an AI day?Because it seems like everybody
else in the world's doing it. And this talent war is getting
freaking crazy. And I, I know, I know you've
mentioned for recruiting purposes, this is a very
important thing that you've done.
(43:30):
I think people have, have you have copied you on this?
And I'm wondering if this is if this year's too early for that.
Thanks, Elaine. Yes, it's a bit of a tough thing
because like when we're doing AIday, we find that some of our
competitors have literally done a frame by frame examination of
our slides and everything we sayand then copy us.
(43:51):
So you know, say like how what'sthe trade off, which does help
with recruiting, but then competitors look very closely in
copy us. I mean, that said, we should
probably, I mean, I guess we could consider the shareholder
(44:12):
beginning to be sort of an we can do, we can maybe go into
depth some, some amount of depthat the, I know, shareholder
meeting with respect to Optimus and AI and sort of that chip
stuff perhaps. Yeah, Tesla's also really
(44:35):
underrated in terms of AI chip design as well as AI software.
So like there's still not a chipthat we would that that exists
that we would prefer to put in our car, that is an AI chip
that, that we would prefer to put in the car over our own.
And even though it's been now out for several years and we're
(45:00):
confident that the AFI chip willbe a profound game changer.
In fact, it's so it's so powerful that we'll have to nerf
it or to some degree for marketsoutside of the US because it
flows way past the export restrictions.
So unless the export restrictions change, we actually
(45:21):
will have to know if our AI 5 show, which looks kind of weird.
Hopefully those hopefully we keep, you know, raising the bar
on export restrictions. Otherwise it gets a bit silly.
But we'll have a bunch of optimist robots on stage at the
shareholder meeting. The optimist lab is cool to see.
(45:44):
It looks like it basically lookslike the set of Westworld.
You could robots in various stages, some of them you know,
in various stages of prepare, like, I don't know, some some
combination of like the tattooing junkyard and the and
West walls. That's very cool.
(46:05):
An optimist is walking around the office here in Palo Alto.
So 24/7 is just walking around like a small, I think.
And we're so optimistic, you know, the Tesla Diner.
So we both won't. Yeah.
So it's we'll go from a world where robots are rare to where
(46:28):
they're so common that you don'teven look up.
Great. Thank you so much.
The next question comes from Edison at Deutsche Bank.
Edison, please unmute yourself. And then please go ahead and
unmute yourself, right? Well, Edison figures that out.
(46:54):
We will go to the next question,which is going to come from Dan
Levi at Barclays. Dan, please go ahead and unmute
yourself. Great.
Thank you. Yuan, you've talked about the
opportunity to put non Tesla owned vehicles into the robo
taxi network. Just talk about the gating
(47:16):
factors to enabling that and what timeline we should expect
on personally owned vehicles in the robo taxi network.
We. Haven't really thought hard
about that, but we need to make sure it works when the vehicles
are fully under our control. And yeah, it's kind of one step
(47:38):
at a time here. We don't want to jump the gun.
As I said, we're being paranoid about safety.
So, so it's like, but I, I guess, I guess it would like
next year is, I'd say confidently next year.
I'm not sure when next year, butconfidently next year.
(48:01):
People who would be able to add or subtract their part to the
Tesla fleet. I mean, one thing to keep in
mind is that we will have some criteria because like even when
you put your car in an Uber or lift and go through a more
checklist process of making surethings are working.
Second Airbnb, Yes. Yeah.
So we will do something like that.
(48:23):
It's. Kind of better process.
Yes, we want, like Elon said, weare, we want to be paralleled
about security and assets. All things like tread on the
tire can have an impact on safety.
So that's why we would want to do some proper validation before
we let other cops come in. Can you follow up?
(48:47):
Yes, thank you. Could you just unpack the
different costs associated with scaling the robo taxi business
and how you think about funding those costs?
Are the cash flows in the auto business sufficient to fund it?
And if not, what other funding sources do you think you'd use?
You know, would you just fund itoff the balance sheet?
(49:13):
Well, as soon as there is a clear cash flow stream
associated with any any product,you can debt finance it.
And in the internal. When in the intern, we will use
our balance sheet, but like oncewe get to a certain scale in
(49:34):
terms of the current revenues, like Elon said, we could get
into a easily earned kind of transaction to try and get
funding. Great.
Thanks so much. And we will now move on to Mark
from Goldman Sachs. Mark, please feel free to unmute
(49:56):
yourself. Yes, good afternoon.
Thank you very much for taking the questions.
With the FSD trials that Tesla has been offering to consumers
and the attention on self driving more generally, are you
able to comment more specifically on what you're
seeing with FSD subscription trends and take rates and help
us better understand how large FSD revenue may be currently?
(50:19):
So we've definitely, I, I mentioned in my in my opening
remarks since we've launched version 12 of FSD in North
America, we've definitely seen amarked improvement in the FSD
adaption. And it's the other thing which
we had also done last year is wedid bring down the pricing and
(50:40):
we've made subscription much more affordable.
So we have seen you know, 25% increase since that time.
So which is an encouraging trend.
But honestly we, we've just started the story around
explaining the benefits of FSD with I like I said before we
(51:03):
released our vehicle safety report, even if you don't
believe in this anything else a car on FSD being 10X safer
should be a motivator. Plus the other thing is people
don't realise even at $99.00 a month, it's like you're getting
a personal show for for almost $3.33 a day.
(51:26):
And this is by far the biggest game changer, which I know we've
been talking about it because part of it is we live and
breathe it. But yeah, I feel like.
Most people still don't know. Yeah, but the best yard people
don't know it exists. And it's still like half of
Tesla owners who could use it haven't tried it even once.
(51:49):
Obviously this is something we want to educate them on.
So we've got to when they come in for service, we'll reach out
to them, send them like videos of how to make it work.
And much, much. It's such a shocking thing.
They don't, they don't think a car is capable of this.
So you have to, you have to showthem and, and, and get them
(52:11):
comfortable with turning it on and off.
It's so trivial, but it's you know, it's like saying you've
got a cat that can you sing a dance, but it just looks like an
old cat and you're like, you know, until you see the cat sing
a dance and talk, you're like, you assume it's just a cat.
That's that's Tesla, Steve. Our car is intelligent.
(52:32):
And So what we're going to do to.
Elan's point, like we've been giving people free time to try
and try the FSD, but we'll startgiving more prompts to say, OK,
this particular drive try FSD. So that I mean, because it's
literally seeing as believing, like Elon said, it's think of it
(52:54):
like a cat. It looks like a normal cat, but
this cat Can't Sing and dance. Yeah, same thing on great.
Yeah, and that 25% comment was 25.
Percent increase in the penetration, yes, since we've
seen the release of of V12 will be fair to you in North America.
Great, thank you. Mark, did you have a follow up
question? Yeah, I think Travis, Tesla has
(53:16):
historically said it would use pricing as one tool to help
drive auto vehicle growth as long as free cash flow stayed
positive, given the ability to monetize products like FSD.
I'm curious how you're thinking about pricing from here as a
potential tool to drive increased volumes given where
you stand with FSD as well as the fact that the IRA purchase
tax credits are poised to go away in the US started in the
(53:37):
fourth quarter. So should we expect more
meaningful price reductions given that monetization
potential? Or do you envision price
reductions be more limited compared to cost downs given
where free cash flow now stands?Thanks.
Well, we're in this like weird transition period where we'll
lose a lot of incentives in the US, incentives actually in many
(53:58):
other parts of the world, but we'll lose them in the US and at
the relatively early stages of autonomy.
On the other hand, autonomy is most advanced and most available
from a regulatory standpoint in the US.
So I mean, does that mean like we could have a few rough
(54:19):
quarters? Yeah, we probably could have a
few rough quarters. I'm not saying it will, but we
could. Q You know, Q4Q1, maybe Q2, but
once you get to autonomy at scale in the second-half and
half of next year, certainly by the end of next year, I think
(54:40):
the are we surprised if if Tesla's economics are not very
compelling, great, the next question is going to come from.
Will free truest at will, please.
Feel free. To unmute yourself when you're
ready. Great.
Thanks. So much for taking my questions.
(55:01):
1st, I'd like to ask for a little bit more detail about the
lower cost model that you talkedabout having I think started
production in the first half, but you said we'll ramp later.
At the last analyst days, I recall you talked about some
aspects of this, like two 2/3 of3/4 reduction in silicon carbide
(55:25):
and not using rare earths in thein the motor and perhaps other
cost downs. You also had this unboxed
architecture that I think you said would not be part of this
sort of interim approach. Can you update us on what we
should expect this thing to actually look like?
Oh, we. Won't get into the looks.
Because, you know, let's just gomodel what just.
(55:48):
Lift the car out of the back there dancing cat there can
singing dance, but it can it cantalk and sing a dance, though.
That's the cool part. Yeah.
I mean, the, the, the fundamentally the biggest
obstacle remains that people just don't have some people
don't the, the desire to buy thecar is very high.
Just people don't have enough money in in the bank account to
(56:08):
buy it. Literally that's the issue.
Not, not a lack of desire, but alack of ability.
So the more affordable we can make the car, the better.
I think it's going to make it will be a very big deal when
people can release their car to the fleet and have it earn money
for them, which I'd like I said,I'm, I feel confident in saying
(56:29):
that'll happen next year in the US at least.
And in the US we're, we're legally allowed, you know,
appropriate disclaimers and that'll make the affordability
dramatically greater. Just like you know, if you, if
you have an Airbnb and you rent out your, your home when you're
not there, rent out a guest roomor guest house or something like
(56:51):
that, your the affordability of your home is much greater.
OK, trying another. Another topic then, can you
know, we, we see all these wonderful developments at XAI
like Grok and you know, obviously Tesla's trying to do
quite a bit in AI. Elon, how do you manage the
(57:14):
division of efforts and recruiting and talent and
capital between these two that that seem like there's a very
high potential that they could in fact compete?
Well, they are doing different things here.
So you know the XAI is doing like you know, TB scale models
(57:45):
and multi TB scale models. You know, Tesla's 100 times
smaller models, so one's real world AI and one's kind of, I
guess a lot of visual super intelligence type of thing.
The, I mean, the really kind of the, the genesis for XAI was
(58:06):
that there were, there were certain people who some people
would not join Tesla AI engineers because they wanted to
open ASI and they would join Tesla.
And I was like, well, maybe they'll join a new company.
And I think the Tesla problem isextremely important, but not
everyone agrees with me on that.And so rather than have them
(58:27):
join, you know, open AI or Google or whatever, some other
company, it's like as well have them create a company in that
regard for it, which is like, which is like AI.
So that's, you know, and make a make a decision.
(58:48):
Do they want to work on like super intelligence data center
or real world AIS? They're both compelling
problems, but some people want to work on one and some want to
work on the other. Great.
And unfortunately. That is all the time we have
(59:11):
today. Thank you everyone so much for
your questions and you'll see you next quarter.
Hey, thank you so much for listening today.
I really. Do appreciate your support.
If you could take a second and hit the subscribe or the follow
button on whatever podcast platform that you're listening
on right now, I greatly appreciate it.
It helps out the show tremendously and you'll never
miss an episode. And each episode is about 10
(59:32):
minutes or less to get you caught up quickly.
And please, if you want to support the show even more, go
to Atreoncom Stage Zero and please take care of yourselves
and each other, and I'll see youtomorrow.
Hey everybody, welcome back to the Elon Musk Podcast.
This is a show where we discuss the critical crossroads, the
Shape, SpaceX, Tesla X, The Boring Company, and Neurolink.
I'm your. Host Will Walden.
Good afternoon, everyone, and welcome to Tesla's second
quarter 2025 Q&A webcast. My name is Travis Axelrod, Head
(00:25):
Investor Relations and I'm joined today by Elon Musk,
Vivatineja and a number of otherexecutives.
Our Q2 results were announced atabout 3:00 PM Central Time in
the update deck be published at the same link as this webcast.
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.
(00:47):
Actual events or results could differ materially due to a
number of risks and uncertainties, including those
mentioned in our most recent filings with the SEC.
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 buttonto join the question queue.
Before we jump to Q&A, Elon has some opening remarks.
(01:09):
Elon, thanks drives. So we've had a very exciting
quarter. The we're able to successfully
launch robo taxis, so providing our first drives with no one in
privacy with paying customers and Austin and as some may have
noted, we've already expanded our service area in Austin.
(01:32):
It's bigger and longer and and it's going to get even bigger
and longer. We were expecting to really
greatly increase the motion service area to well in excess
of what competitors are doing and that's hopefully in a week
(01:54):
or so, two weeks. Yeah, A.
Couple of weeks, a couple of weeks or so and and then we're,
we're getting the regulatory permission to launch in the Bay
Area, Nevada, Arizona and a number of and Florida, a number
of other places. So as soon as we get the
(02:17):
approvals and we improve our safety, then we'll be launching
the autonomous ride hailing and most of the country.
And I think we'll probably have autonomous ride hailing in
probably half, half the population of the US by the end
of the year. That's, that's at least our goal
(02:37):
subject to regulatory approvals.I, I, I think we'll technically
be able to do it. So assuming regulatory
approvals, it's probably addressing half the population
of the US by the end of the year.
But we, we, we are being very cautious.
We don't want to take any chances.
And so we're good, we're going to yeah, go, go cautiously.
(03:02):
But but it's the service areas and the number of vehicles in,
in operation will increase at a hyper exponential rate.
So, you know some other notable things.
Model Y in June became the best selling car in Turkey,
(03:23):
Netherlands, Switzerland and Austria.
It is, I believe the best selling car of any kind in the
world still. And autonomy is a is a big
factor there. So even without even accepted,
even without supervised, even with just supervised self self
(03:46):
driving, it's a huge selling point.
And it's worth noting that we donot actually yet have approval
or supervised FSD in in Europe. So our sales in Europe we think
will improve significantly once we are able to give customers
(04:07):
the same experience that they have in the US.
This is my, this is I think a very important point to convey.
And we've been working with maincountry regulator, which is the
Netherlands. And I think we're close to
getting approval of Netherlands.Then it's got to go to the EU.
(04:27):
It's quite a, you know, Kafkaesque.
In fact, Kafka had no idea that's something like the EU
could exist beyond Kafkaesque challenges with bureaucracy.
But it will, we will get the approvals and I think we'll get,
you know some people in Europe will have experience, some of
(04:47):
them have the US in most of Europe, you know this year
hopefully at least partially in this quarter.
And then we also have some regulatory, regulatory
challenges in China which we're hoping to unblock shortly where
we because we also cannot provide supervised investee in
(05:10):
China currently. Are we going to unblock that
suit And that's also that's another major, it's really is
the single biggest demand drive.And then within the US, as we
get confident about safety in different geographic areas, the
will be, it will loosen up on how much somebody has to be
(05:39):
laser focused, have their eyes laser focused on the road.
You know, it's, that's, that's been a common complaint.
In fact, it it does create an open odd, odd safety issue where
people will sometimes disengage autopilot, then then do
something, change the radio or maybe look at the phone drive
(06:02):
with your knee and then reengageautopilot, which obviously is
not is less safe than simply keeping autopilot on.
So anyway, we're get that that that experience will will
improve in in the next several weeks.
The the because of our focus on Austin with the one driver's
(06:25):
seat, the production release of Autopilot is and actually
several months behind what people experienced on a robotax
in Austin. So now we have the robotax in
Austin launched will be providedadding back those elements so
that there will be a step changeimprovement in the water pilot
(06:47):
experience for people outside ofAustin.
This is really, as you can tell,this is very much sort of
autonomy is, is the story like we need the we need the physical
product, without which you cannot have autonomy.
But once you have a physical product, you need the autonomy
is what amplifies the value to stratospheric levels.
(07:14):
We also launched the Tesla Diner, which has been a huge
hit. It actually got worldwide
attention, which is unusual for a diner.
Datas don't typically get headline news around Earth, but
this is a pretty special diner and if you're in the LA area,
it's worth visiting. It's sort of a shiny beacon of
(07:38):
hope and but not otherwise sort of bleak urban landscape,
frankly. So it's really quite a lovely
experience. Great job by the team there on
the full stop driving front continue to worry about that we
have we're continuing to make a significant improvements just
(08:01):
with the sock rate. So the we're expecting to
increase the parameter count. Actually, at this point, I think
we think we can probably 10X that one was 10X the power
front. Yeah, roughly, roughly 10X the
(08:22):
parameter count. So this is actually a very
tricky thing to do because if you as you increase the
parameter count, you get, you get choked on memory bandwidth.
But we currently think we can 10X the parameter count from
(08:43):
what people are currently experiencing.
That's, that's so not, not just the Forex actually 10X increase
in private. And yeah, so, so there's still a
lot of improvement on the existing hardware to, to, to
happen. Energy is growing really well
(09:06):
despite headwinds from tariffs and spare supply chain
challenges. The Megapack is expanding
capacity quickly and and we haveupgrades the mega pack that
would make it even better and wehad record Powerwall deployment
gain in Q2. So I think batteries are going
(09:29):
to just going to be a massive thing that the scale of
batteries, battery demand is. I think not that many people
appreciate just how gigantic thescale of battery demand is.
The way you think about it is that the US sustained power
output for the US grid is around1 terawatt, but average usage is
(09:56):
less than half a terawatt. If you add batteries to the mix,
you can run the power plants 24/7 at full capacity, thus
doubling, more than doubling theenergy output per year of the
United States just with batteries.
But that's a good big deal. It's a really big deal, Optimus.
(10:25):
So we're revolving the Optimus design and really getting
Optimus to the point where it isa phenomenal design.
We're an Optimus version to right now sort of 2 1/2.
Optimus 3 is it is an exquisite design in my opinion and will be
(10:49):
an incredible as I've said many times before, it predicted it
will be the biggest product ever.
It's a very hard problem to solve.
You have to design every part ofit from physics, first
principles. There's nothing that's off the
shelf that actually works. So you can design every motor,
gearbox, power electronics, control electronics, sensors,
(11:16):
the mechanical elements. We've also got to train
Optimists to use its lens and its sensors with a neural net.
But we'll be applying the same techniques we're applied for a
car, which is essentially A4 wheel robot and Optimist is a
(11:39):
robot with arms and legs. So the the same principles that
apply to optimizing AI inferenceare the car applied to optimates
because they're both really robots in different forms.
And and Tesla, it is important to you know that Tesla is by far
the best in the world at real world AI like like a clear proof
(12:04):
point for that be if you compareit to Tesla to Weymouth,
Weymouth's got you know, the caris best doing with God knows how
many sensors. And yet isn't Google good at AI?
Yes, but they're not good at real world AI.
Thus far they have Tesla is actually much better than Google
by far and any much better than anyone at real world AI.
(12:27):
And and by far Tesla has the best the best inference
efficiency. Like the key figure for AI is
what is the intelligence per GB?And people talk about
parameters, blah, blah, blah. But I think we'll just talk
about stop talking about parameters and talk about
gigabytes because with the parameters, you can have 4 bit
(12:50):
parameters, 8 bit parameters, 16bit parameters.
But the actual constraints in the hardware are how many
gigabytes of RAM and how many gigabytes per second can you
transfer from RAM. Therefore, it is not a parameter
constraint. There's it is a, there's a byte
constraint and Tesla has the highest intelligence density of
(13:13):
any AI by far. And I have a lot of insight into
this with XAIXAI is, you know, Grok is the smartest AI overall,
but it's a, you know, Grok 4 is a giant beast actually with the
TB level. And so kind of a important to
(13:38):
note, Tesla has the best intelligence density.
Intelligence density will be a very big deal in the future.
It is now. So with Optimus 3, which is
really the right design, It's like it doesn't have at this
point, there's no significant flaws with the Optimus 3 design,
(14:05):
but it it, we are going to retool a bunch of things.
So it's it'll probably be prototypes of Optimist 3 end of
this year and then scale production next year.
We're going to try to scale Optimist production as fast as
it's seemingly possible to do. So try to get to 1,000,000 units
a year as quickly as possible. You think we can get there in
(14:34):
less than five years? It's nice to sort of I guess
that that's a reasonable aspiration is 1,000,000 units in
your five years, it seems like an achievable target.
In conclusion, so far 2025 has been a very excited year, a lot
(15:03):
of major milestones. We've made clear demonstrable
progress in autonomy that's a lot of naysayers said we would
not achieve. And it's worth noting that the
we have done what we said we're going to do.
I mean, we're always on time, but we get it done and our
(15:23):
naysayers are sitting there withegg on their face.
So great, great, great progress by this as a team.
Yeah, I do think if Tesla continues to execute well with
(15:45):
big autonomy and and like humanoid robot autonomy, it will
be the most valuable company in the world.
A lot of execution between here and there doesn't just happen,
but provided we execute very well, I think Tesla has a shot
(16:08):
at being the most valuable company in the world.
Obviously, I'm extremely optimistic about future of the
company. Best way to predict the future
is to make it happen, and we're making it happen here with Tesla
team. So I'd just like to say thanks
to all of our supporters and I think we're going to tell you an
(16:31):
incredibly exciting future. Great.
Thank you very much. Elon and Bedlock has remarks as
well. Tavis, as Elon mentioned and Q2
was an interesting quarter in a few respects.
We started ramping up the production of the new Model Y at
all our factories. We rolled out our robotaxi
service in Austin and delivered a car completely autonomously
(16:54):
from directly from the factory to the customer's home.
It is a Seminole point. Get to this thing.
I mean, it took a lot of effort and I really want to thank
everybody at Tesla to make this happen.
It wasn't an easy thing to do, but we did it.
It took time, but we've just begun the next phase for the
(17:17):
company. The one big bill has a lot of
changes that would affect our business in the near term.
The first among those changes isthe repeal of the higher EV
credit of 7500 by the end of this world.
Given the abrupt change, we havelimited supply of vehicles in
the US this quarter as we have already with the lead times to
(17:38):
auto parts to build cars. We've rolled out all our planned
incentives already and we'll start paying them back as we
start to sell. If you're in the US and looking
to buy a car, this around now aswe may not be able to guarantee
delivery orders placed in the later part of August and beyond.
The will also make changes to certain emission standards by
(18:01):
reducing the amount of penalty to 0.
This in turn will have an impacton the new sales of regulatory
credits to other OEMs and in turn will lead to lower
revenues. When we now plan our business
around such sales, it will nonetheless impact our total
revenues. Quite false.
(18:22):
On our automotive product portfolio, the entire line up is
updated globally, we're seeing an increase in the number of
test drives. We started the production of the
lower cost model as planned in the first half of 25.
However, given our focus on building and delivering as many
vehicles as possible in the US before the EV credit expires and
(18:44):
the additional complexity of ramping a new product, the ramp
will happen next quarter slower than initially expected.
One thing which is grossly and appreciated and Elon talked
about it is that all our vehicles in the lineup are
capable of a dump. This is by far the biggest
differentiator between US and the competition.
(19:06):
Our vehicles top safety standardas is, but with FSD they are and
will continue to set a new standard for safety within
vehicle transportation. We published our vehicle safety
report earlier today and you cansee the car on FSD is 10X safer
than the car not on FSD. We've started seeing an uptick
(19:29):
in FSD adoption in North Americain recent months, which is a
very promising trend. And just to give you
perspective, you know since the launch of since we moved to
version 12 of FSD, we've seen the adoption rates really
increase. We've started seeing the on the
(19:51):
automated revenue front despite reduction in regulatory credit
revenue and the total automotiverevenue increased by 19%
sequentially. Even the total deliveries only
improved 14%. This was primarily due to an
improved ASASPS because of the new Model Y.
(20:13):
This had been improving margin sequentially as well.
Along with improved mix and higher cost fixed cost
absorption, despite an increase in cost of tariffs, we started
seeing the impact of tariffs in our PNL.
Sequentially, the cost of tariffs increased around 300
million with approximately 2/3 of that impact in automotive and
(20:36):
rest in energy. However, given the latency in
manufacturing and sales, the full impacts will come through
in the following quarters and socost will increase in the near
term. While we are doing our best to
manage these impacts, we are in an unpredictable environment for
the tire front. The margins for the energy
(20:57):
generation and storage businesses improved sequentially
while deployment reduced primarily due to the ramp of
power deployments. At higher margins, we were able
to achieve our highest gross profit for the business yet.
Note that the overall deployments will continue to
vary quarter to quarter. Thinking on covered this that
(21:19):
you know industrial storage willmake a difference in this drive
towards AI and data center growth.
The energy requirements are increasing at a rapid scale as
application as AI applications are very energy hungry.
The quickest path to scale up energy is deploying storage.
This is something that our customers have started
(21:40):
realizing. And despite this business having
the largest impacts from tariffs, we're seeing customers
willing to accept some of the tariff impacts.
The big bill has certain adverseimpacts even from the energy
business, most notably on the residential storage business due
to the early expiration of consumer credits by the end of
(22:02):
this year. The challenges of the storage
business therefore remain both from the bill and from the
tariffs and we're doing our bestto try and manage through this,
but it will we will see shifts in demand and profitability.
The margins for our service and other businesses improves
(22:23):
sequentially primarily due to higher profits from
supercharging and improvement ininsurance and service center
profitability. Operating expenses also grew
sequentially as we continued ourinvestment in AI projects
including additional expenses related to employee related
costs including higher stock based compensation and
(22:44):
depreciation for AI compute. Our operating expenses
especially R&D related spend will continue to grow.
We believe even in the current environment it is the right
strategy to keep making investments in these areas to
position us for the long term. Other income grew sequentially
(23:05):
primarily from the mark to market adjustment on Bitcoin
holdings which was 284,000,000 gain in Q2 while being 125
million loss in Q1. Just wanted to remind people
that this would keep keep creating volatility based on the
Bitcoin price while other while operating cash was increased
(23:27):
sequentially, so did our CapEx resulting in 146 million of free
cash flow. We continue to make investments
in various aspects of manufacturing like cybercap,
semi mines and other manufacturing spend and the
expansion of our AI initiatives.Our latest expect expectation
for the year in terms of CapEx is in excess of 9 billion.
(23:52):
To summarize, we have near term challenges in our business due
to the negative impacts of the bill and tariffs.
However, the investments that wehave made for AI, robotics and
our lead in energy sets us up for a bright future.
I would like to thank the whole Tesla team, our customers, our
(24:12):
investors and supporters for their continued belief in US.
Great. Thank you very much.
So now we're going to move on tosay.com questions.
The first question is, can you give us some insight how
robotaxis have been performing so far and what rate you expect
to expand in terms of vehicles, geofence, cities and?
Supervisors. Yeah, Robotaxi has been doing
(24:36):
great so far in Austin. Customers really love the
experience. Like super small, very safe and
like just a great experience overall.
And we already did the first dayof expansion in Austin and we
continue to expand in Austin to probably more than 10X our
current operating region. We're also testing in a lot of
(24:56):
other cities. As I mentioned, the next thing
to expand would be in the San Francisco Bay Area.
We are working with the government to get approval here.
In the meanwhile, launch the service with the person in the
driver's seat just to expedite. And while we wait for regulatory
approval, we're also testing a lot of other cities in the US
(25:18):
including Florida, Nevada, etcetera.
Great. Thank you very much, Ashok.
The next question is what are the key technical and regulatory
hurdles still remaining for unsupervised FSD to be available
for personal? Use can.
You provide a timeline. First, let me getting there.
(25:46):
I think it's it'll be available for in supervised personal use
by the end of this year in certain geographies.
We're just being very careful about it, so.
This is not something which we want to rush, no, we want to
make sure that everything is safe before we met it.
Hopefully available broccoli. Yeah.
We're just being extremely paranoid, Yes.
(26:08):
But I'd be, I'm confident that by the end of this year, within
a number of cities in the US, we'll it'll be available to end
users like. Yeah.
Yeah. And for what I suppose is the
same a hardware in the Austin robot XD vehicles as some
(26:30):
customer vehicles and they deliver a car autonomously from
the factory to a customer this quarter, Yes and every test and
manufacturer in the US and in Europe autonomously drives
itself from the end of time to the.
Loading. Docks and it, so it's just the
software. Beta, yeah, I think we'll be,
we'll end up delivering cars in the great Watson area and the
(26:54):
Bay Area by default from the factory by the end of this year.
Like a car will deliver itself to your, to where you are,
unless you say you don't want that.
It'll be super cool, yeah. Great.
Thank you guys. The next question is what
specific factory tasks is Optimus currently performing and
what is the expected timeline for scaling production to enable
(27:16):
external sales? How does Tesla envision Optimus
contributing to revenue the next2-3 years?
Yeah. So the Optimus 3 design, as I
mentioned earlier is I think finally the right design, the
way further optimizations, but there are enough fundamental
changes to that are needed or the Optimus 3 design, it has all
(27:38):
the degrees of freedom that you really want or need.
So it's, you know, we'll have prototypes of that and I don't
know, three or three months and it's subtly in production.
We'll certainly start productionon that in the beginning of next
year. The production ramp is simple.
(27:59):
It's always simple to predict the ES curve of your production
ramp when something has got an entire, when everything is new
because the rate of productions will move as fast as the least
lucky and least confident element of the entire supply
chain as well as in internal processes.
(28:19):
So the more new stuff that is ina product, the slower the ramp
could be because of unexpected supply chain interruptions or
mistakes made internally especially easy to predict sort
of the the end of the of the S curve or late in the S curve
(28:40):
than the beginning of the S curve and the beginning of the S
curve of the production route isin any case not really material
for revenue purposes. The beginning of the S curve
key, if you're usually not usually yours negative gross
margin and you're debugging a lot of issues.
So that's why I like it's, it's,I feel like fairly confident
(29:07):
predicting things or at least medium confident in predicting
where we are in five years. But it's hard to predict where
we are in a year or two years. So that's why I think five
years, I think we could be at the, let me look at this, I'd be
(29:28):
surprised if at the end of five years, you know, 60 months from
now, if we are not roughly making 100,000 Optimus robots in
month, in 60 months, I would be shocked.
All righty. Thank you very much.
Next question is, can you provide an update on the
(29:48):
development and production timeline for Tesla's more
affordable models? How will these models balance
cost reduction in profitability and what in fact do you expect
on demand in the current economyclimate?
Well, I, I think Bailout did a good job of answering this
question in his opening remarks.As we said, we started
production in June and we're ripping quality bills and things
around the corner. And given the that we started in
(30:10):
North America and our goal is tomaximize production with an IRA
for pending Q3, we're going to keep pushing hard on our current
models to avoid complexity. Unfortunately that rolls away.
We'll be running with the more affordable models available for
everyone in Q4. And you know the goal of those
products was not to negatively impact revenue or or gross
(30:31):
margin, but just to make a car that everyone loves and wants at
a more affordable price. Great.
Thank you, Lars. The next question is, can you
talk about the benefits of Teslainvesting in XAI?
This is not the forum to discussthis topic.
I mean like if, if there is something which we need to
(30:53):
discuss, we'll discuss it separately.
I think obviously you know we'rea publicly traded company.
Shareholders are welcome to put forward any shareholder
proposals that they'd like. I've recently encouraged that
and and then have shareholders vote and we'll act in accordance
with the shareholder wishes. Great.
(31:15):
Thank you very much. The next question is, can you
tell us a little bit more about what goes on in the Tesla design
studio do? You want me to take that one?
We kind of generally say that what happens in the studio stays
in the studio and that, you know, earnings calls are not the
(31:36):
place to disclose new product stuff.
But we're, you know, we're working to make sure that we
have an exciting future for for our Tesla and our and the
product lineup. Yeah, there's a lot of exciting
things happening in the design studio.
It's not like static. And really what's going to
happen over the next several years is a fundamental
(31:57):
transformation of the company from a pre autonomy wall to a
post autonomy. And I'm working on a new master
plan to articulate that as a team.
And there will be some teething pains as you transition from
(32:22):
free autonomy to the post autonomy world.
But I think the future version for Tesla is incredibly exciting
and will profoundly change the world in a good way.
So you sound like sort of time for whatever, but I, I think if
what let's just say if we execute on that plan
(32:43):
effectively, which is you have to actually do that, Tesla will
be the most valuable company in the world by far.
Great. Thank you.
The next question is actually a duplicate on unsupervised set of
Steve customer vehicles. We'll escape that.
And after that is are there any news for hardware 3 users
(33:03):
getting retrofits or upgrades? Will they get Hardware 4 or some
future version of hardware? 5.
I mean, what we want to do is wewant to get unsupervised done on
hardware for first. Once it's done, then we'll go
back and look at what we need todo with the hardware 3 cars.
I mean the like I said, the focus is first to get
(33:24):
unsupervised out and then we'll go back and see what more work
you need to do. Great.
The next question is can you give an update on Dojo and could
xai be a customer for Dojo? Dojo 2.
(33:47):
We expect to have Dojo 2 operating at scale sometime next
year with scale being somewhere around 100 KH 100 equivalents
and and then AI 5, which is really spectacular to use those
(34:10):
words. Likely spectacular to the AI5
chip will be hopefully be in buying production around the end
of next year. But that has a lot of potential.
I think, you know, thinking about Dojo 3D and the AI6
inverse chip, it seems like intuitively we want to try to
(34:36):
find convergence there where it's basically the same chip
that is used. What we use say two of them in a
car or optimist and and maybe a larger number on a on a board, a
kind of 512 on a board or something like that.
(34:58):
If you want high bandwidth communication between the chips,
how to force serving during doing it?
Burn serving. That sort of seems like
intuitively the sensible way to go.
Great. The next set of questions have
(35:19):
all actually been covered. So we'll, we'll end with how
will the BBB elimination of tax credits for solar projects
affect your sales pipeline for Megapack?
Yeah, our, our sales pipeline is, is quite diversifying across
customers and market segments. So we aren't heavily weighted in
Megapack projects that are paired with solar.
(35:39):
And as we talked about in the opening remarks, we're seeing
storage quickly being recognizedfor its ability to unlock grid
efficiency and how quickly it can be deployed to help the
grid. Additionally, although the
recent bill was not favorable towards solar, we, we believe
solar projects will still get built because the energy is
necessary. The projects are well developed
and they're ready for execution and there's really no
(36:01):
alternatives in the near term given gas turbine lead time and
pricing. We also can continue to see
growth in the data center segment and in stand alone
storage projects providing capacity to the grid in several
markets across the US Overall, we're forecasting a very strong
second-half of the year as we increase deployments.
And lastly, we we continue to invest heavily in US
(36:23):
manufacturing to mitigate policyand tariff impacts, expecting
our first LFP cell manufacturingfacility to be online by the end
of the year and launching our third mega factory near Houston
and 2026. Great.
Thank you, Mike. We will now be moving to analyst
questions. The first question comes from
Emmanuel Rosner at Wolf Research.
(36:45):
Emmanuel, please feel free to unmute yourself whenever you're
ready. Great.
Thank you so much. Can you hear me?
Yeah, thanks. So, Elan, are you able to share
any KPIs with us in terms of therobo taxi business, how many
vehicles are you operating, miles driven autonomously or the
(37:08):
number of safety critical intervention?
Just curious, you know how to roll out, is it generally is
going in and any sort of like targets that you could share
more broadly? Sure, Jonah.
Yeah, we have. You know, more than 7000 miles
operating in Austin area. It's you know, just because
(37:28):
services new via a handful of vehicles right now, but then
we're trying to expand the service in terms of both the
area and also the number of vehicles both in Austin and
other locations. So far, you know, the there's
like no notable critical influence there.
You know, sometimes we have our own restrictions as to for
(37:49):
example we resting towers speedylimit to 40 mph and the vehicle
wants to go on like higher speedor we can stop the vehicle, but
those are a lot of convenient asopposed to safe and critical
nature. So for the service that has been
really well received and we continue to expand on it.
Great. And that, yeah, longer term from
(38:14):
an economics point of view, longer term, you've previously
talked about working to drive down the cost per mile on the
robo taxis maybe towards 30 or $0.40 per mile over time.
Now that your service is live, how should we think about the
main milestones to getting there?
Yeah. Well, the the cyber Cab is which
(38:36):
is really optimized for autonomythat that I think has got to
probably sub 30 cent per mile potential over time, maybe 25.
You know, it's, it's really likeif you design A car from scratch
(38:57):
to, to be a cost optimized robotic taxi, like cyber cab,
you know, you like, for example,we're not trying to make it, you
know, corner like a like incredibly well, like a model 3
would or Model S or even model Ylike it's got model, you know,
(39:20):
model all of our, all of our cars that are driven by people
are super fun to drive. They've got incredible
acceleration, you know, the incredible cornering capability.
But we're confident that very few people in a cybercap want to
be huddling around. So, you know, so we were, we
(39:41):
reduced the top end speed, whichmeans we can use more efficient
tires. We don't need as much
acceleration. We don't need as much, you know,
big brakes to sort of we want stopping distance, but we're not
expecting it to be heavily used.It's, it's a gentle ride.
Essentially, if you design it for a gentle ride and then you,
(40:07):
you have a. A much more optimized design
point so that that's why it seems probably we could achieve
that, especially if optimist is,you know, so it's serving
cleaning up the car and make doing maintenance and stuff and
it's, you know, doing automatic charging.
(40:31):
So I think it's going to the actual cost per mile of Cyber
Cab will be very low. The cost from Wells, our
existing fleet will be higher, but still very competitive.
So yeah, maybe some number of $0.50 in viscosity, Yeah.
(40:55):
So this really Tails Rd. Taxi fleet will go from tiny to
gigantic in terms of operations in pretty short period of time
like my guess is as it has a material impact on our
financials around the end of next year.
(41:17):
Great. Thank you very much.
The next question comes from Adam at Morgan Stanley.
Adam, please unmute yourself. Great.
Hello, everybody. So Elon, as Tesla moves into
this next phase of physical AI, autonomous humanoids, robotaxis,
etcetera, world changing, civilizational species changing
(41:41):
technology with dual purpose, are you comfortable moving Tesla
in this direction while only having a 13% stake in the
economy, sorry in the company, is that sustainable or does he
still insist that something needs to happen given, you know,
your current lack of control on the types of technologies you're
getting into? Yeah, that that, that is a a
(42:06):
major concern for me, as I've mentioned in the past and I hope
that is addressed at the upcoming shareholders meeting.
But yeah, it is a big deal. Like, you know, I want to find
that I've got like so little control that I can easily be
ousted by activist shareholders after having both, you know,
these these army of humanoid robots.
(42:28):
I think that, as I've mentioned before, I think my control of a
Tesla should be enough to ensurethat it goes in a good
direction, but not so much control that I can't be thrown
out if I go crazy. OK, Elon, and you're not going
to go crazy. We, we, we, we trust you.
(42:48):
You can stay a little crazy. A little crazy is OK, Elon,
though we understand the the board of directors of a major
U.S. investment bank recently toured Optimist production.
That's, I don't know if you wantto confirm that or not.
It's just what we've heard. That's cool.
But when do you think others will be able to get a first hand
(43:10):
view of Optimists like that? And is the second-half of this
year too soon to have an AI day?Because it seems like everybody
else in the world's doing it. And this talent war is getting
freaking crazy. And I, I know, I know you've
mentioned for recruiting purposes, this is a very
important thing that you've done.
(43:30):
I think people have, have you have copied you on this?
And I'm wondering if this is if this year's too early for that.
Thanks, Elaine. Yes, it's a bit of a tough thing
because like when we're doing AIday, we find that some of our
competitors have literally done a frame by frame examination of
our slides and everything we sayand then copy us.
(43:51):
So you know, say like how what'sthe trade off, which does help
with recruiting, but then competitors look very closely in
copy us. I mean, that said, we should
probably, I mean, I guess we could consider the shareholder
(44:12):
beginning to be sort of an we can do, we can maybe go into
depth some, some amount of depthat the, I know, shareholder
meeting with respect to Optimus and AI and sort of that chip
stuff perhaps. Yeah, Tesla's also really
(44:35):
underrated in terms of AI chip design as well as AI software.
So like there's still not a chipthat we would that that exists
that we would prefer to put in our car, that is an AI chip
that, that we would prefer to put in the car over our own.
And even though it's been now out for several years and we're
(45:00):
confident that the AFI chip willbe a profound game changer.
In fact, it's so it's so powerful that we'll have to nerf
it or to some degree for marketsoutside of the US because it
flows way past the export restrictions.
So unless the export restrictions change, we actually
(45:21):
will have to know if our AI 5 show, which looks kind of weird.
Hopefully those hopefully we keep, you know, raising the bar
on export restrictions. Otherwise it gets a bit silly.
But we'll have a bunch of optimist robots on stage at the
shareholder meeting. The optimist lab is cool to see.
(45:44):
It looks like it basically lookslike the set of Westworld.
You could robots in various stages, some of them you know,
in various stages of prepare, like, I don't know, some some
combination of like the tattooing junkyard and the and
West walls. That's very cool.
(46:05):
An optimist is walking around the office here in Palo Alto.
So 24/7 is just walking around like a small, I think.
And we're so optimistic, you know, the Tesla Diner.
So we both won't. Yeah.
So it's we'll go from a world where robots are rare to where
(46:28):
they're so common that you don'teven look up.
Great. Thank you so much.
The next question comes from Edison at Deutsche Bank.
Edison, please unmute yourself. And then please go ahead and
unmute yourself, right? Well, Edison figures that out.
(46:54):
We will go to the next question,which is going to come from Dan
Levi at Barclays. Dan, please go ahead and unmute
yourself. Great.
Thank you. Yuan, you've talked about the
opportunity to put non Tesla owned vehicles into the robo
taxi network. Just talk about the gating
(47:16):
factors to enabling that and what timeline we should expect
on personally owned vehicles in the robo taxi network.
We. Haven't really thought hard
about that, but we need to make sure it works when the vehicles
are fully under our control. And yeah, it's kind of one step
(47:38):
at a time here. We don't want to jump the gun.
As I said, we're being paranoid about safety.
So, so it's like, but I, I guess, I guess it would like
next year is, I'd say confidently next year.
I'm not sure when next year, butconfidently next year.
(48:01):
People who would be able to add or subtract their part to the
Tesla fleet. I mean, one thing to keep in
mind is that we will have some criteria because like even when
you put your car in an Uber or lift and go through a more
checklist process of making surethings are working.
Second Airbnb, Yes. Yeah.
So we will do something like that.
(48:23):
It's. Kind of better process.
Yes, we want, like Elon said, weare, we want to be paralleled
about security and assets. All things like tread on the
tire can have an impact on safety.
So that's why we would want to do some proper validation before
we let other cops come in. Can you follow up?
(48:47):
Yes, thank you. Could you just unpack the
different costs associated with scaling the robo taxi business
and how you think about funding those costs?
Are the cash flows in the auto business sufficient to fund it?
And if not, what other funding sources do you think you'd use?
You know, would you just fund itoff the balance sheet?
(49:13):
Well, as soon as there is a clear cash flow stream
associated with any any product,you can debt finance it.
And in the internal. When in the intern, we will use
our balance sheet, but like oncewe get to a certain scale in
(49:34):
terms of the current revenues, like Elon said, we could get
into a easily earned kind of transaction to try and get
funding. Great.
Thanks so much. And we will now move on to Mark
from Goldman Sachs. Mark, please feel free to unmute
(49:56):
yourself. Yes, good afternoon.
Thank you very much for taking the questions.
With the FSD trials that Tesla has been offering to consumers
and the attention on self driving more generally, are you
able to comment more specifically on what you're
seeing with FSD subscription trends and take rates and help
us better understand how large FSD revenue may be currently?
(50:19):
So we've definitely, I, I mentioned in my in my opening
remarks since we've launched version 12 of FSD in North
America, we've definitely seen amarked improvement in the FSD
adaption. And it's the other thing which
we had also done last year is wedid bring down the pricing and
(50:40):
we've made subscription much more affordable.
So we have seen you know, 25% increase since that time.
So which is an encouraging trend.
But honestly we, we've just started the story around
explaining the benefits of FSD with I like I said before we
(51:03):
released our vehicle safety report, even if you don't
believe in this anything else a car on FSD being 10X safer
should be a motivator. Plus the other thing is people
don't realise even at $99.00 a month, it's like you're getting
a personal show for for almost $3.33 a day.
(51:26):
And this is by far the biggest game changer, which I know we've
been talking about it because part of it is we live and
breathe it. But yeah, I feel like.
Most people still don't know. Yeah, but the best yard people
don't know it exists. And it's still like half of
Tesla owners who could use it haven't tried it even once.
(51:49):
Obviously this is something we want to educate them on.
So we've got to when they come in for service, we'll reach out
to them, send them like videos of how to make it work.
And much, much. It's such a shocking thing.
They don't, they don't think a car is capable of this.
So you have to, you have to showthem and, and, and get them
(52:11):
comfortable with turning it on and off.
It's so trivial, but it's you know, it's like saying you've
got a cat that can you sing a dance, but it just looks like an
old cat and you're like, you know, until you see the cat sing
a dance and talk, you're like, you assume it's just a cat.
That's that's Tesla, Steve. Our car is intelligent.
(52:32):
And So what we're going to do to.
Elan's point, like we've been giving people free time to try
and try the FSD, but we'll startgiving more prompts to say, OK,
this particular drive try FSD. So that I mean, because it's
literally seeing as believing, like Elon said, it's think of it
(52:54):
like a cat. It looks like a normal cat, but
this cat Can't Sing and dance. Yeah, same thing on great.
Yeah, and that 25% comment was 25.
Percent increase in the penetration, yes, since we've
seen the release of of V12 will be fair to you in North America.
Great, thank you. Mark, did you have a follow up
question? Yeah, I think Travis, Tesla has
(53:16):
historically said it would use pricing as one tool to help
drive auto vehicle growth as long as free cash flow stayed
positive, given the ability to monetize products like FSD.
I'm curious how you're thinking about pricing from here as a
potential tool to drive increased volumes given where
you stand with FSD as well as the fact that the IRA purchase
tax credits are poised to go away in the US started in the
(53:37):
fourth quarter. So should we expect more
meaningful price reductions given that monetization
potential? Or do you envision price
reductions be more limited compared to cost downs given
where free cash flow now stands?Thanks.
Well, we're in this like weird transition period where we'll
lose a lot of incentives in the US, incentives actually in many
(53:58):
other parts of the world, but we'll lose them in the US and at
the relatively early stages of autonomy.
On the other hand, autonomy is most advanced and most available
from a regulatory standpoint in the US.
So I mean, does that mean like we could have a few rough
(54:19):
quarters? Yeah, we probably could have a
few rough quarters. I'm not saying it will, but we
could. Q You know, Q4Q1, maybe Q2, but
once you get to autonomy at scale in the second-half and
half of next year, certainly by the end of next year, I think
(54:40):
the are we surprised if if Tesla's economics are not very
compelling, great, the next question is going to come from.
Will free truest at will, please.
Feel free. To unmute yourself when you're
ready. Great.
Thanks. So much for taking my questions.
(55:01):
1st, I'd like to ask for a little bit more detail about the
lower cost model that you talkedabout having I think started
production in the first half, but you said we'll ramp later.
At the last analyst days, I recall you talked about some
aspects of this, like two 2/3 of3/4 reduction in silicon carbide
(55:25):
and not using rare earths in thein the motor and perhaps other
cost downs. You also had this unboxed
architecture that I think you said would not be part of this
sort of interim approach. Can you update us on what we
should expect this thing to actually look like?
Oh, we. Won't get into the looks.
Because, you know, let's just gomodel what just.
(55:48):
Lift the car out of the back there dancing cat there can
singing dance, but it can it cantalk and sing a dance, though.
That's the cool part. Yeah.
I mean, the, the, the fundamentally the biggest
obstacle remains that people just don't have some people
don't the, the desire to buy thecar is very high.
Just people don't have enough money in in the bank account to
(56:08):
buy it. Literally that's the issue.
Not, not a lack of desire, but alack of ability.
So the more affordable we can make the car, the better.
I think it's going to make it will be a very big deal when
people can release their car to the fleet and have it earn money
for them, which I'd like I said,I'm, I feel confident in saying
(56:29):
that'll happen next year in the US at least.
And in the US we're, we're legally allowed, you know,
appropriate disclaimers and that'll make the affordability
dramatically greater. Just like you know, if you, if
you have an Airbnb and you rent out your, your home when you're
not there, rent out a guest roomor guest house or something like
(56:51):
that, your the affordability of your home is much greater.
OK, trying another. Another topic then, can you
know, we, we see all these wonderful developments at XAI
like Grok and you know, obviously Tesla's trying to do
quite a bit in AI. Elon, how do you manage the
(57:14):
division of efforts and recruiting and talent and
capital between these two that that seem like there's a very
high potential that they could in fact compete?
Well, they are doing different things here.
So you know the XAI is doing like you know, TB scale models
(57:45):
and multi TB scale models. You know, Tesla's 100 times
smaller models, so one's real world AI and one's kind of, I
guess a lot of visual super intelligence type of thing.
The, I mean, the really kind of the, the genesis for XAI was
(58:06):
that there were, there were certain people who some people
would not join Tesla AI engineers because they wanted to
open ASI and they would join Tesla.
And I was like, well, maybe they'll join a new company.
And I think the Tesla problem isextremely important, but not
everyone agrees with me on that.And so rather than have them
(58:27):
join, you know, open AI or Google or whatever, some other
company, it's like as well have them create a company in that
regard for it, which is like, which is like AI.
So that's, you know, and make a make a decision.
(58:48):
Do they want to work on like super intelligence data center
or real world AIS? They're both compelling
problems, but some people want to work on one and some want to
work on the other. Great.
And unfortunately. That is all the time we have
(59:11):
today. Thank you everyone so much for
your questions and you'll see you next quarter.
Hey, thank you so much for listening today.
I really. Do appreciate your support.
If you could take a second and hit the subscribe or the follow
button on whatever podcast platform that you're listening
on right now, I greatly appreciate it.
It helps out the show tremendously and you'll never
miss an episode. And each episode is about 10
(59:32):
minutes or less to get you caught up quickly.
And please, if you want to support the show even more, go
to Atreoncom Stage Zero and please take care of yourselves
and each other, and I'll see youtomorrow.
Popular Podcasts
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.
24/7 News: The Latest
The latest news in 4 minutes updated every hour, every day.
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com