Tesla 2015 Annual Shareholder Meeting (2015)
Questions on ElonsFAQ asked in this interview (3)
Transcript
0:00good afternoon and welcome to Teslas 2015 annual stockholder meeting we're real glad that you could be here today there's going to be two parts of this meeting after the formal legal part of the meeting will introduce our chairman and CEO Elon Musk up to the stage and
0:17for now I'd also like to introduce several important members who are with us today our board is in the front row you guys can wave we also have our we also have our CFO deepak Ahuja here
0:33today and our vice president of investor relations jeff Evanson is here i think i saw our CTO JB Straubel around as well
0:49you might see him we also have from our independent auditors PricewaterhouseCoopers we have Larry West all and Nino Sarkis here and we can now get started after the voting Ilan will be on the stage as I mentioned to provide a brief overview of the company
1:05and he'll answer your questions but for now let's get started by calling the meeting to order please refer to the agenda and the rules that you received when you walked in today in the interest of respecting the time of all the stockholders who are present we ask that you help us run a smooth process by
1:21following those rules in particular those relating to the stockholder questions and comments I declare that the polls are now open as I mentioned before the start of the meeting if you wish to submit a ballot to vote your shares or change your prior vote you can
1:37pick one up from Lisa Brenton our inspector of Elections who's in the back and you can drop it back with her as well Lisa can you wave your hand again in case you've moved there she is Tesla's Board of Directors is appointed Lisa as our official inspector of Elections and she will file the minutes
1:53of today's meeting computershare has certified that starting on April 22 2015 the proxy materials are a notice of internet availability of the proxy materials were mailed are provided to all stockholders of record as of April
2:0815 2015 copies of these proxy materials and related certificates will be attached to the minutes of the meeting today we have a majority of the outstanding shares represented at the meeting so I declare that there is a quorum present and we may proceed with the business of the
2:23meeting we're conducting the meeting in accordance with Tesla's bylaws the items on the agenda are as follows number one to elect to class two directors antonio gracias and Kimball musk to serve for a term of three years or until the
2:38respective successors are duly elected and qualified number two to ratify the appoint of PricewaterhouseCoopers as Tesla's independent registered public accounting firm for the fiscal year ending December 31 2015 Tesla's Board has recommended that our
2:55stockholders vote for each of the director nominees and for the ratification of the appointment of our accounting firm finally we've received two stockholder proposals as described in our proxy statement our board has recommended that our stockholders vote against each of these proposals the
3:12first stockholder proposal is proposed by mr. mark Peters who's here today and mr. Peters please if you'd like to go to the microphone and present your proposal
3:32we'll get you microphone
3:50[Music] fellow shareholders board members and mr. muskie thank you for your time despite tremendous odds Tesla has created a brand that is changing the course of history and as both shareholders and
4:06owners we are very very pleased we have logged many thousands of miles in our Model S's and have yet another one on order our planet faces unprecedented risks due to the dumping of greenhouse gases in our atmosphere and oceans mr.
4:21musk has accurately called this the dumbest experiment ever and we concur 100% we feel it's morally irresponsible they run in a planetary scale experiment on our one and only planet mr. musk has previously used a lifeboat metaphor to describe this
4:37situation and I'll go ahead and borrow it here we're in lifeboat earth with water up to our kneecaps and rising tesla has invented an awesome baleen bucket but upwards of 90% of those buckets are having holes drilled in them
4:52so every time they're used water pours back into our lifeboat let me explain how this directly applies to the proposal number three I suspected the vast majority of our customers and even our shareholders have no idea the greatest source of greenhouse gases is
5:08actually animal agriculture producing more greenhouse gases than all transportation combined as the UN reported back in 2006 Bill Gates noted a more recent analysis in 2013 estimating of livestock produces
5:25nearly 51 percent of the world's greenhouse gases 51 percent Tesla exists to create sustainable transport in which is why this is inconsistent to offer leather Tesla does not offer a leather
5:40equivalent or a faux leather interior and it goes even further by blocking a half dozen must have options if one does not ordered leather thus effectively forcing our customers into the non environmentally friendly interior
5:56exacerbating this logic conflict is the fact that competing luxury brands have been using environmentally-friendly leather like materials for years all to rave reviews by the non profit consumer reports as all listed in proposition 3
6:11Tesla's intelligent data driven company we encourage Tesla to apply its principles to the interiors of our cars by using leather Tesla is promoting the animal agriculture industry the industry that's doing the most damage to lifeboat
6:27earth this is in direct conflict with Tesla's goal of reducing greenhouse gases and frankly it is untested my three minutes are almost up mr. musk you and the other board members were sent a DVD copy of a documentary called cowspiracy it has over 20 pages of
6:44source links over on cowspiracy com forward slash facts 20 pages I have brought another seven copies for the board and will seriously hope that the environmental black hole at Tesla can be fixed we and the future occupants of
7:00lifeboat earth truly trust you will make the right choices going forward thank you Thank You mr. Peters [Applause]
7:15Thank You mr. Peters the other shareholder proposal that we have today will be presented by Elizabeth Ferrell Peters you now have three minutes as well if you want to step to the microphone thank you
7:40good afternoon fellow shareholders mr. Moskin board members thank you for your time our first Tesla purchase was in 2013 and since the moment we acquired our car our enthusiasm has been bursting
7:55at the seams so much so that some of my patients have given me the nickname Tess and our friends are extremely concerned that my husband and I have been effect infected with a severe an incurable case
8:11of Tesla itis my first Tesla was an anniversary gift and it was fully vegan I was quite pleased that Tesla had accommodated the request but later found out that my husband had to go through
8:26extreme measures to get a fully vegan Tesla I was very surprised by this because I thought Tesla was such an environmentally aware company please allow me to share the reality of animal agriculture I grew up on a farm a veal
8:43farm I know firsthand the grim existence the animals endure I experienced the ammonia stench of untreated waste the extreme confinement of the baby calves in the merciless way they are shipped to
9:00their deaths this is the unfortunate truth of agribusiness nearly all animals used as commodities and used for their parts are treated this way there is no reverence for life or compassion for the
9:15sentient beings that they are mr. musk at last year's USC graduation you spoke of first principles you said boil things down to the most fundamental truths you can imagine and
9:30reason up from there and this is a good way to figure out if something really makes sense or if it's just what everybody else is doing let's apply that same test to Tesla Tesla has two choices
9:45Tesla can continue to fill cars with the skins of sentient beings that suffer unspeakable horror while adding mass of amounts of greenhouse gases to the air according to the UN and other sources this is a fundamental truth of
10:01using animal skins or Tesla can adopt one of the many faux leather interiors used by Mercedes Benz Lexus BMW Infiniti and others that are cruelty free have wonderful reviews last a long time come
10:19in multiple colors and have an involved far less greenhouse gases we don't want to plug other brands but we visited luxury various brands dealerships and found that seats with faux leather
10:34alternatives were simply outstanding they are even available with heating and cooling functions in light of the facts how can Tesla remain attached to the first choice sometimes awareness is the first step to making a difference mr.
10:51musk given the potential risk to our planet please review the facts and stop forcing the ordering of leather please adopt environmentally friendly interiors our planet doesn't not have decades to spare thank you
11:12Thank You mr. Peters as a reminder the board has prepared its position in response to each of those proposals and those are set forth in the proxy in a joint statement as we wrap up are there any proxies that need to be submitted lisa brenton again is in the
11:29corner if anyone wants to raise their hand if they need someone to pick it up this would be the time to do it if anyone from Tesla can come and help pick up the ballots that would be great thank
11:45you
12:03just went back there anyone else okay well with that I declare that the we've got one more over
12:19here so with that one exception I declare that the polls are now closed Tesla will formally announce the results of the voting by filing a current report on Form 8-k with the Securities and Exchange Commission within four business days of today's meeting that concludes
12:35the official business of today's meeting I now welcome you to stay for Ellen's presentation we will also leave time at the end for questions and answers with you on during the course of ulong's presentation he may make may discuss our business outlook and make other forward-looking statements such statements or
12:51predictions based on our current expectations actual events or results could differ materially due to a number of risks and uncertainties including those disclosed in our most recent Form 10-q filed with the SEC such forward-looking statements represent our views as of today should not be relied
13:06on thereafter and we disclaim any obligation to update them after today with that please welcome mr. Elon Musk
13:37all right welcome everyone to the annual shareholders meeting something we've got a great year to recap for you and then I will talk a little bit about the the upcoming year and and then there's some
13:53product related announcements to be made which I think will be pretty excited about all right so you may be familiar with this car yeah I suppose the next time so you know I think things have
14:24been growing quite quickly as shown by this year graph and it's really quite quite steep growth for a company that's building a complex product that's where there's several thousand unique parts and and there's hundreds of suppliers
14:41from all around the world so it's it's quite tricky to sort of take to grow at that pace but we've been able to to grow it I think a pretty decent pace for for a car company it's like really unprecedented for a car company to grow
14:57to have this level of percentage growth we're gonna try to maintain it for as long as possible but it seems as I've said before it seems likely that we'll be able to maintain a roughly 50 percent
15:12average growth rate per year for several years to come now it would really be 50 percent every year but 30 percent I think on average is actually I think quite an achievable target
15:31and then this year we introduced the dual motor all-wheel drive and I think actually I'll have to admit I think in introducing it we probably didn't do an ideal job of explaining that dual motor
15:46man to all-wheel drive so I mean there are two motors and they're connected to the four wheels but that that that that connection was was not clear for a lot
16:03of potential customers so and our fault really because we we should we should we should we should always call it really the all wheel drive model s and and and it's really it's the best or wheel drive
16:19architecture that's that's ever been done because of the fact that there are two motors and we can dynamically shift the talk front to rear at the millisecond level so whereas a traditional old wheel drive has a single motor that has a mechanical axle that that's essentially dumb it can't doesn't
16:35have any intelligence and it has a little latency and I can't can't react differently because we've got two motors it can it can immediately react to traction at the front traction at the rear and the the reaction speed of electric motor is so fast that the car almost feels like it's standing still to
16:51the control sequence within the motors so it's actually able to achieve a level of all-wheel-drive handling that that no car has been able to achieve yet so we're really excited about this and wherever it provides drive unit
17:06redundancy so it's like having a twin-engine plane if one motor goes down you can actually still drive on the other motor so this is particulate if you were sort of stuck you could potentially be stuck somewhere having those that dual motor capability is it's
17:21like having a twin-engine plane and such that you're you can still drive even if one if something happens to one drive unit so having that I think is a pretty cool capability and and certainly this has increased our addressable market quite significantly because there's a
17:37lot of people who only will buy an old wheel drive it also helps retire a lot of risk with the Model X since the Model X will be using the same drivetrain we also
17:52introduced autopilot initially starting with the the hardware suite and now we're gradually updating the software so that the current autopilot version 1 hardware consists of a forward radar a camera 4 camera and 360-degree
18:09ultrasonics that go out to about 5 meters or roughly 16 feet around the car so that allows us to do work all sort of a highway autopilot as well as some cool features like auto park and being able
18:26to summon the car on private property I'm actually just I'm testing the the latest version of autopilot every week in fact I've typically two or three builds per week that I'm testing in my car and we're making gradual progress
18:42towards what I'd say is a releasable bit of software but it is quite a tricky thing and we want to make sure that our testing is exhaustive before we release the software but if if we keep making
18:57progress I think we may be able to get it out to early access customers which is sort of our public beta program around the end of this month so that should be pretty cool [Applause]
19:17we also introduced the dual motor 70 kilowatt hour car and the goal here was to provide an Olin package that offered great value for money so all inclusive was all wheel drive super charging autopilot apart from the convenience
19:33convenience features with navigation and so forth and it was intent to provide factors that even if you booked bought the base car with no options you would still have a great great product that was the goal with the 70d and that's been very well received by by customers
19:48and we're seeing sort of upwards of a third of customers choose the 70d so this is sort of interesting terms looking at the North American market share of high-end premium sedans were
20:03actually the number one seller so we're so we're really excited by this because
20:18if we can take this level of success and extend it around the world there's really a lot of potential for sales growth for the company and I think even in North America while we are strong on the west coast and in the south we are
20:36not that strong in the Northeast so there's really a lot of potential in the US Northeast and and within Canada broadly and we're also going to be opening up in Mexico later this year so yeah probably be North American so so I
20:56think there's this potential there to to grow things and yeah so this this is I think a good indication and as we as we bring out new models in you know in the Model X and the SUV SUV category
21:11obviously and and then more affordable cars this bodes well for being able to replicate this level of share for for Tesla in another product segments um so
21:28with with the Model X the long-awaited what'll X so we're expecting to begin our first liveries in probably about three or four months and as we as with
21:45the software I'm I'm looking at the latest iteration of the Model X every week and it really is it's turning out to be a really great car I think the Model X may arguably be a better SUV then then the Model S is a sedan so that
22:02I think is really really exciting we want to make sure obviously that's that some of the key features of the Model X particularly the felt throwing door and the the way that the second row seats are done and a few other things that people aren't aware of are done just
22:18right and provide true functionality and true of true value improvements and you know first is just sort of feeling gimmicky it's it's got to be a genuine improvement in utility and aesthetics I
22:33think for for it to be right so getting those there's the spinal nuances right for the Model X is is what we're focused on right now but we're really in the short strokes with getting this tube to market supercharges have really grown
22:53grown rapidly I mean it's sort of like kelp on steroids here you know when we launched the Model S in just three years ago there were no superchargers anywhere in fact we didn't even tell people there was such a thing as a supercharger people for the first six months of the
23:09car bought the car not even knowing that there was they were going to be superchargers and we'd actually put a high voltage DC bypass in the car people didn't even know was there so we opened
23:24the first two super charges I think early in 2013 it's only been like two years and now you can travel almost anywhere in the u.s. using the supercharger network and and then going
23:39to sort of next year that's next year takes a lot
23:57so you can see that that's from zero to two that in three years and a similar level of density is gonna be the case for Europe as well as Asia and eventually you'll be able to go anywhere in the world using the supercharged
24:13network and and we're planning onto the further upgrades to the supercharger system we've just introduced an upgrade which is a liquid-cooled cable which means that the cable can be really thin in fact we have the first working
24:28version of that here at the at the Mountainview supercharger location so you can try it out for yourself it has caused some customers to be quite puzzled that they're plugging in a supercharger with this tiny cord and they thought something was wrong but
24:43that's actually just our next-generation cord because if the court is liquid cool you can actually make it very very thin and supple so instead of trying to wrestle sort of a good-sized snake into into the car it's this thin supple cord it's really really great and it also has
25:02the potential for increased power of the supercharger long term and then recently we announced the
25:18official creation of Tesla energy with the power wall and power pack and being available in two sort of configurations one as kind of a backup UPS capability
25:34and then the other as a daily cycler there was a bit of confusion in the press because they were conflate sometimes the the back-up functionality of the UPS functionality with the daily cycler functionality but then they're
25:49really two different things the daily cycler is sort of more about economics or getting off the grid completely whereas the backup UPS is just there to ensure that your house has power if there's ever a power outage and and and
26:05we did get obviously if ever to feedback on on the power wall a lot of it was positive and some of it was lots of others but we actually took some of that some of the negative feedback to to
26:20heart and I'm very happy to announce that the we've dramatically increased the power capability of the power wall so it's actually going to go from that from being from having a two kilowatt steady 3.3 kilowatt peak to a seven
26:37kilowatt power five kilowatt steady price is unfair so it basically will more than double the power output of the of the power
26:53pack and the price is going to say the same [Applause] we're also prioritizing delivery of the powerwall to feel that have a solar
27:08installation doesn't doesn't need free solar city any solar installation that's compatible so solicitous of course I mean you know preferred if you like the best but but it basically if we're gonna
27:27prioritize delivery the power wall to people that have an existing solar installation or or are getting a solar installation because the solar installation comes with an AC to DC inverter which means you don't need to buy an additional AC DC inverter for the
27:42power wall and because that that cost is already there with your solar system and and we're also going to be prioritizing delivery the power wall to partners that minimize the cost to the end-user so
27:57that the net result is we're expecting people to be able to purchase and install a power wall for about four thousand dollars so [Applause] since that basically $3,500 for the for
28:13the powerwall with the increased power capability and then figure 500 bucks of installation labor and cost that's the best expectation so I think that dramatically improves the capability of the power wall and improves that and
28:29reduces the effective cost to the end-user so I think that the value for money is dramatically better with what we're with the changes that we're going to make so and of course there's the power pack which has been very well received by the utility industry
28:57which we have open up a new castings and machining center in Lathrop which is basically near Stockton us out in the Central Valley so we're gonna be doing a lot of machining and casting a lot of foundry work and producing a lot of parts that
29:14will go into the Model S and and that'll be done in in the Central Valley so that that allows us to expand our vehicle capacity in Fremont and allocate more
29:29space for vehicle final assembly we're also installed a new stamping press line in in Fremont and this is going to be have greater automation and
29:46it's going to be great for particularly for the Model X stampings and we're bringing up the the new sx of body production line which has also a lot
30:03more automation greater flexibility and we should be able to do okay at least within the body line about three times more than we're able to do in the in the current body line so it's what the whole
30:18Factory but at least for this element of vehicle production we will have approximately a three X increase in capability we also have a new pain center this is
30:33quite a huge capital cost for us and the new pain center is actually set up to be able to do ten thousand cars a week so this pain center is intended to be able to match the production level that
30:49includes the model three so we can produce all of the group we can paint all of the cars at the basically five hundred thousand you know year level with this paint shop and the best of my knowledge this is going to be the most advanced to paint shop in the world
31:10and then the gigafactory making good progress with the gigafactory there's there's a lot of people blog is online and so forth that will take photos and videos and drone videos of
31:27the gigafactory so it's pretty easy to monitor the progress search the internet and and we've made quite you're quite good
31:42progress here we expect to have phase 1 built and operating and producing battery packs by the middle of next year [Applause]
31:57alright with with that I think it's been a really great year I'm very proud of the the test of team for everything they've accomplished and there's often a lot of attention not on me but really it's a huge team effort social might say
32:12I'm incredibly proud of the test the team for everything they've accomplished over this period of time and there's this one one final thing I wanted to announce is that our CFO Deepak who Joe Deepak are you right here do you mind
32:27coming up [Applause] so Deepak is actually going to be
32:42retiring later this year and I wanted to just calling up on stage and to personally thank Deepak for and I'm doing an incredible job of last I guess seven years it's been through hell and high water and and staying sort of calm
33:01and steady through some incredibly difficult times and yeah just thank you very much for everything you've done deep bucks gonna be staying on through war as for as long as it takes to to find someone have to find a new CFO and then we'll be working with the new CFO
33:18to make the transition so be very smooth process but I wanted to just bring Deepak Deepak couple on stage and just personally thank him for everything he's done for the company he's done an amazing job thank you
33:59well this makes it even more emotional firstly you know and thank you very much it's been an honor working for you I have discovered more potential in myself
34:15than I could have imagined and the credit goes to you for that it's been quite a remarkable journey for me of self-discovery as well as very fast
34:33rollercoaster ride now probably probably akin to what we will experience in the Hyperloop when that comes to reality and so as you can imagine leaving or making that decision
34:50to leave that's well it's been really hard for me it's it's akin to letting go of your own baby is how I look at it Victor's been in Tesla since 2008 when we had we started with a lot of passion
35:06a lot of a vision to go change the world but limited resources and and we had to fight the battles to get there so it's been much harder than I thought it would be to be here and make that decision but
35:26it's the right one for me at this point to go check off a few things on my bucket list and pursue a few other life goals that I have I'm actually quite speechless and I'm gonna just again
35:41thank you everybody and I'll miss this incredible passion of our customers and our shareholders and the incredible Tesla team so thank you [Applause]
36:11alright thanks again if you and with that let's open it up to your questions okay if we can have people queue up behind the microphones we'll take your questions in the order that they come we'll alternate between sides
36:27of the room and obviously remember the the rules that our general counsel mentioned at the beginning of the meeting
36:42and blankenship shareholder and my question really is do you have any questions for us I mean we're always lobbing questions at you but you know would you is there anything you would like to ask us about the future or how
37:00Tesla plays into what we want from the future sure what do you think yeah I mean what do you think we should be prioritizing what I'm thinking more of is like Tesla
37:16is about the future and I think it's about what we want from the future and like what we were talking about today with the vegan Interiors I think that really resonated with me and it shows what people want from the future I guess
37:32they want a company that is like really focused on looking ahead like not just the car but looking at the future of the future and I think that's what Tesla shareholders are that's that's what our mindset is and so I just want some
37:51feedback from you essentially just like brain candy like when we leave here today what would you like us to think about in terms of the future sure well I mean I call the Tesla is pretty straight forward it's really to accelerate the
38:06advent of sustainable energy and particularly sustainable transport so in order for Humanity to have a good future or for life on Earth really to have a good future we have to figure out how to
38:21make that future sustainable meaning not to have crazy amounts of co2 in the atmosphere and and you know ultimately get into a situation of hydrocarbon scarcity which would be economically
38:36disastrous so the that's what we're focused on that's our primary goal is accelerate the advent of sustainable transport and then with the batteries help sustain it he'll accelerate the advent of sustainable energy production
38:52so yeah I think anything that furthers that goal you know we'd love to hear about I mean for sure of making the cars compelling making it more affordable same thing with the energy storage
39:08products those are those are key things so if there's ways for us to make the car better or the batteries better we would love to hear about those mr. musk during the Tesla energy announcement you
39:24indicated that the gigafactory would be like a product and that you would continue to improve on it and open up the designs but as you've also noted there's a need for multiplicative factories so I was wondering if there's any indication that Tesla would accept
39:40orders for Giga factory or be looking to build more sooner rather than later thank you well we gotta build one first so I'm not focused right now it's just making sure that we both gigafactory version one correctly and that's that's
39:58going to be quite a quite a difficult challenge over the next few years we'll have the first part of an active next year but then we want to try to get to full production in roughly three years or maybe a little roughly three years three or four years so that's that's
40:16gonna be quite a challenge and I think once we get to that point we're gonna be actually before we get that point we want to figure out where to put say Giga factory two and three but but I don't think we should until we until we feel
40:31we've got a firm handle on Giga factory one we don't want to spread our energy over multiple efforts yeah very brisk I'm a shareholder a Model S and roaster
40:47owner I was very excited with your presentation and launch of Tesla energy a specific question about the power wall I you reiterated earlier today two different models I understand that I assume one can in a residential installation combine both types of power walls
41:02single inverter the powerwall software can manage those but can the in an emergency situation like a grid blackout does the software only draw back out part from the ten kilowatt hour model or would it ever in some circumstances draw
41:18from the seven kilowatt hour well the combining them actually wouldn't be super super great it's gonna be yeah I mean right we actually we could make the software do that but it
41:34doesn't currently do that it would treat them both it's it's simply gonna treat it if you had a seven out of ten like a 17 kilowatt hour system and depending upon what what your draw is it would currently I believe draw equally from
41:50both maybe JB should join me on the stage grants to some of these questions but I think it really depends on what the application is that that you'd want to use it for it I mean it usually it
42:06tends to bifurcate quite clearly into either a backup uninterruptible power supply for the house or a daily cycling application in the u.s. the daily cycling application is going to be fairly limited because the the time of
42:21day charges are usually not substantially different I mean there are in a few places but in most places in in the US people are charged something clipping either a flat rate or something very close to a flat rate so so it's it's in
42:38terms of economics it's gonna make more sense to get there you go hey save so any weight so it's like in terms of economics it's gonna make more sense -
42:53well actually basically it's at most parts of the US it doesn't make it what's what Solar City said which was message over in the French was in most parts the u.s. it doesn't make direct it doesn't make economic sense but purely a purely economic sense to have a battery
43:08pack because in most places in the US you can't arbitrage your time of day you now in many other countries you can so in places like say Germany or Australia but the the daily cycler pack makes does make a great economic sense it's it's
43:23it's like an awesome thing even if you couldn't care less about renewable energy in the US you'd really have to care a lot about renewable energy will not live you'd have to care about it more than economics in order to do the daily cycler thing then separately there's the intra uninterruptible power
43:40supply application which again we're probably not a huge number of households that want that but but it is nice to know that in if there's a big storm or earthquake or hurricane that you will have power and and that's that's the
43:59application so that's that's really one would be paying to have that capability and then with the increased power capability of the power wall that I just talked about you should be able to win a single ten kilowatt hour pack being with
44:15a peak power capability of seven kilowatts be able to put everything in your house except air conditioning on that circuit and then if you have a if you want to put air conditioning as well you can have two of them because we typically be about 14 15 kilowatts
44:30inclusive of air conditioning control and you can stack even more if you want maybe one thing also I think that gets forgotten is that the backup battery can also cycle quite a lot you know it can cycle once a week for ten years so the
44:46cycling difference between the two is maybe maybe a four or five to one difference but people should never be afraid to actually use the backup version kind of in a hybrid application where you could be still cycling it quite often thousands of times and you know also you know with the backup pack
45:02or the cycling pack I mean it legitimately lets you use more of the solar energy that you generate at your house you know instead of exporting it to the grid selling it essentially to utility and then having to buy it back you're legitimately storing your own energy and then using your own solar energy for your loads yeah I mean it to
45:19be precise I mean the the the that the so-called sort of low cycle thing would be like roughly twelve hundred cycles and the high cycle will be five thousand cycles so at five
45:34thousand cycles if you do a daily cycle that's about fifteen years but even you know the the twelve hundred one that's you know it's what which one quarter so you could do it you could you could conceivably do a daily cycle for maybe
45:49three or four years even with that alright so it may be like an overly comprehensive answer of it and actually it's probably worth also elaborating on the power pack which we expect most of
46:05our activity to be with the power pack you know the power walls is probably eighty percent maybe more than that of our total energy sales likely to be at the power pack level two utilities and two large industrial customers and and
46:22that's that's where the economics are very compelling because there's an important difference between price and cost the the cost to the utilities of up between day and night is quite
46:37substantial because the the power usage is often sort of a two to one at least if not greater than two to one sometimes substantially greater than two to one between peak day usage and trough night usage so so there's no question that at
46:55the utility side their cost of power generation has a big difference but between day and night that that's a separate question from whether they are pricing that as such to the consumer and
47:11since the cost is fundamentally there between day and night for utilities it's quite compelling to use the the power pack and that they can look at it from a levelized cost of energy standpoint and
47:26say well they could either get the key either sort of upgrade an existing power plant or they could get a new power plant or they could get a battery pack and they can look at it in a really simple way like that and the potential is there is noise in fact I
47:42mean even if renewables were not part of the picture that power pack is independent of renewables you can actually take probably something somewhere close to half of all the power plants in the world and turn them off if
47:58you had batteries so I'm not sure this is sort of well appreciated yeah in the whole distribution system all the wires all the Transformers all the substations you know don't run anywhere near full utilization so you know as you kind of optimize that whole system you can get
48:13much more value the utilities can get much more value out of the entire grid without having to build more wires or buy more transformers they can just level eyes the load across the whole system and that all happens you know somewhat separately from renewable energy and it can happen in different locations exactly and there's another
48:32key advantage of the lithium-ion is that it's it's very compact so it's in a very tight package as compared to some of the other battery solutions which although they have a theoretically low cost per
48:47kilowatt hour well though it's a theoretically low because they're actually quite high but but they're bulky and being bulky is really difficult because if your utility and you want to put and you want to add a
49:03battery buffering to the grid and and you and you can you could with the Tesla solution you can put that in at the substation level so you can take our power packs and they're compact enough to fit in an existing substation this is
49:18a very big deal because it means that they do not have to create a new substation or expand the existing substation because in most neighborhoods in order for for them to do that they would have to buy someone's house and level it and and put in a new substation and then the neighbors do not like that
49:38so it's big big pain in the butt factor whereas if you can put the batteries in the existing substation it's very easy and it's a turnkey solution and and even being a big corporate customers they
49:54like plug-and-play like if it's if it's a low headache it's super easy order it install it it just works that they love it just as much as consumers do Alon as you probably hear every day thank you so
50:10much for all the amazing things you have done and are doing my name is Salim I live in Albuquerque New Mexico if I may respectfully submit a plea that when it time comes for you to think of installing a second Giga factory as
50:28opposed to the states you are considering as candidates you could become part of the hearts and history of New Mexico also sure we had certainly Albuquerque was one of the finalists so that would be you know a strong contender you know some of the other
50:44states there are lots of things going for them for New Mexico if you did this you could be what Microsoft and Boeing did so I hope you will consider them definitely consider thank you my name is
51:04Hyden so nod I'm a shareholder and I'm finishing up 10th grade tomorrow down in LA and one of the really things I've noticed about the majority of Tesla's is that they're really not being utilized too often they mostly just sit around with just like they just mostly sit around so what what I've been able to do
51:22due to some pretty fortunate investments I've been able to order in 85 D and what I really hope to do with this car is use it to its full potential and I'm gonna be doing this by I'm gonna be creating a constant loop of this car with constant people filled in it and it's gonna be
51:37going between Culver City and Las Vegas and I call this a test loop and okay and by doing this I assume I can save around 40 tons of carbon dioxide emissions into the air every month by these cars so my question is mainly
51:53about thank you so my question is about autopilot in version 7 I want to know that if I do lend out the car people to drive it from LA to Vegas if autopilot will be good enough to really ensure
52:09their safe travels over the road and on the highways but specifically and also I want to know if you're planning on you planning on linking the sensors in the current Tesla's to other cars in the road and then lastly I want to know if you are going to be open sourcing the
52:26hardware and software for autopilot like you did with the electric designs yeah so the autopilot at least version 1 of water pilot the expectation is that someone is paying attention to the road
52:42and is ready to take over if there is an issue it's it's really intended in the same way that autopilot for an aircraft works where autopilot for an aircraft alleviates pilot workload but the pilot is still expected to pay attention and
52:58so you can't like turn on the water pilot and go to sleep and then that is certainly true of the auto pilot that we'll have in in the long-term we'll have I mean sort of several years from now there will be a fail
53:14operational order pilot with redundant sensors and everything that's needed for someone to actually literally go to sleep and wake up their destination but but this is an extremely difficult
53:29engineering project and it means you have to take care of all of the corner cases and there there are many corner cases the the real question for what a pilot is not can you you know is it going to work it isn't gonna work but how many nines
53:44of reliability so and and have and how much safer doesn't need to be then a person driving before you before the what a pilot can take control with with no no attention from a
53:59person so I mean I think probably would want what a pilot to be at least statistically ten times safer than a person before we would suggest that someone simply turn on autopilot and wake up their destination so autopilot version one is really
54:17intended as a load alleviation for the driver and there's something that sort of just it makes it easier to to drive but not one where you can not pay attention and and then as far as vehicle
54:33to vehicle communication there there is a little bit of that that will be done in terms of figuring out say traffic data like traffic speed data so we can we can do better navigation over time so
54:48we can say okay how fast automata lessons going on this road and that gives us the ability to give a better navigation to to users but I it's hard to imagine much more than that because this is such a small number of Model S's
55:04on the road and the vast majority of other cars are not Model S's so so you'd only be communicating so much sporadically yeah so and did you have a fight are you gonna be open sourcing the
55:19autopilot software and hardware in general we don't open-source our software because you know we were a little hesitant about potential vulnerability exploits so we use an open
55:36source operating system it's just I think so it runs on Linux but you know we we don't open source the application code also you mentioned something about a beta for the auto pilot how do you how
55:52does someone get in to become a beta tester for auto pilot you have to be on the early access program thank you all right and thank you mr.
56:09mas my name is Ola in delaying I'm a shareholder I'm an owner as well over model this first of all on behalf of the Bay Area Model S owners I want to say a big thank you for the Mountain View supercharger that just learned this afternoon my question specifically has
56:28to do with the auto spirit portion of the auto pilot I think it's the most anticipated aspect of version 1.0 could you shed a little bit of light on the timeline for that are you getting some resistance from the government is there
56:43some models or is it is it something that is coming for sure and when yeah I'm actually testing several boats of the order stair functionality every week and so there's you were sort of we make
57:01sort of improvements most weeks that it gets better some weeks it gets worse I and it's it's it's a bit tricky because like when you do the I mean this is a very difficult thing to take of a steering and and you're and we have to
57:17also consider like well what happens if there's a hardware problem you know some hardware system fails in the vehicle or there's a can bus communication error or you know this just the debugging of a huge range of issues is very difficult
57:34and we currently only have a ford camera and a ford radar and the ultrasonics so there's no there's there's a limited amount of redundancy on the sensor front so I mean for Ford collision we you know we have the radar and the camera to
57:50provide some level of redundancy and the ultrasonics but but there's only one computer in fact there's a whole series a whole bunch of computers in series that are that are doing this if any one of those computers fails then the order share functionality would would would would fail
58:07but you know that being said I mean I'm cautiously optimistic that we'll have orders to your functionality out to early access customers by the end of this month fantastic yeah that's wonderful and there's no issue with the
58:22government that we have to worry about there's no issue with with the government because because importantly this is not an abdication of responsibility for steering yeah it is it simply meant as a driver the driver
58:37systems feature yeah so like I said it's basically it's a lot like what a pilot for aircraft where a pilot still has responsibility for flying the plane but being able to engage autopilot just reduces the pilots workload substantially yeah well thank you very
58:53much that's excellent news thank you Ilan we're at about three o'clock mark so we'll let you decide how many more questions you want to take I just wanted to give you that time advisory all right we'll probably take another maybe four questions or so yeah thanks great hi my
59:09name is Stephanie downs and I'm with people for the Ethical Treatment of Animals we're a shareholder of tesla's and I have a question concerning our use of leather in your car interiors as an innovator Tesla has changed the public's perception of electric cars and you've
59:24shown the industry that sustainable technology can be cool we've heard a lot today about the environmental destruction of animal agriculture so I'm not going to mention in any rest of that other than I'd like to mention that we regardless of anyone's dietary choices in the actual production of leather
59:40which requires that cow skin has to be converted into a material that will not rot it has to be treated with massive amounts of toxic chemicals including formaldehyde cyanide and coal tar derivative derivatives so the same as not all electric cars are created equal
59:56neither are all synthetic materials and there are wonderful vegan environmentally friendly rillettes that are currently being produced some of which are even made from recycled bottles so what I'd like to ask from you is there these materials are available
1:00:11and if we can connect Tesla with organizations that are producing these materials that are environmentally friendly cost-effective would you at least consider them yeah absolutely if you can give the contact information to Jeff who's right there then we'll look into it thank you very
1:00:27much hello my name is David I'm a shareholder good today a question for you thank you I'm surprised more aren't wearing them the my question for you is
1:00:44I'm a nurse I don't get snow days and I live in the northern upper part of the United States and the model 3 is more in my budget the model 3 specifically but future cars are they going to be mostly or all of them dual motor the I think
1:01:04for for the model 3 the the the standard the base version of the model 3 would be single motor but it still have very good traction control like in fact even before we were shopping the dual motor our highest sales per capita in the
1:01:20world just if just when we all we had was a rear motor were annoying and and a single the person who as an individual who'd bought the most number of Model S's or what most lot of Tesla's because what a bunch of verses before that lived
1:01:36in or lives in Narvik which is above the Arctic Circle so it's real important to emphasize that even a real will drive Tesla as long as it has the right tires it has amazing traction on snow and ice but I think in order to keep the car as
1:01:53affordable as possible with the standard version the car would have a single single motor but we would offer a dual motor as an option thank you all right hi my name's Bob Weiner I'm a Tesla stockholder also the SolarCity
1:02:09stockholder and going for the trifecta my question I hope it's not inappropriate but I'm curious if you have any thoughts about when you would take SpaceX at public particularly after you retrieve your rocket successfully on
1:02:24the next try I hope sure well yeah because basics those goals are very long-term it's certainly longer term then the save the stock market typically you know it's it's like the the feedback
1:02:41cycle the stock market tends to be quarterly and like maybe they can handle a few years max but but but if you if you're talking about something really long-term like trying to build a city on Mars and and then you end up sacrificing profitability for a really long time in
1:02:56order to get there and both the technology is reduce so I'm I think it would be not super loved by the public markets you know so the I would expect with with SpaceX is that will probably
1:03:12go public once we have regular flights to Mars well I'll try to answer a few more questions I know I'm supposed to have
1:03:28like a board meeting after this really so let's go we'll go to 3:15 if you guys don't mind all right hi so there's Musa from LA my question is on on the gigafactory you said not by
1:03:432020 that you're gonna have more less 500 units produced but that was before you announced the powerwall and power pack is that including a calculation because you already supplied constraint with the demand so even with the bottle
1:03:593e that I think they'll create bigger demand well have you calculated that or is it lower demand in the power pack so yeah the the gigafactory is is as currently designed is intended to produce about 50 gigawatt hours at the pack level and about 35 gigawatt hours
1:04:15at the cell level so we'll be pulling in sales from other parts of the world as well and that that should allow for 500,000 cars to be produced per year plus have 15 gigawatt hours left over
1:04:30for stationary the way it's looking the station demand for stationary is higher than expected so we are looking at potentially expanding the output capability of the gigafactory to meet the the higher demand for stationary
1:04:47thank you Alon thank you very much for the supercharger here downstairs I think it's not just for owners actually for shareholders gonna sell a lot of cars as people see that going in and out of Google in places like that my questions
1:05:02are around safety and one is you know Manto ask of course set a new bar for sedans what should we expect for Moto X because all the other SUVs have like high center of gravity and rollover is a problem those types of things watch would should we expect there the second question is I have a guy start off you
1:05:18know as you log miles in autopilot and you have the statistics of lower accidents like that I'm sure it's going to come true where we're gonna be able to get like lower insurance rates from our companies sorry I missed the second and the second question is as you log more out of
1:05:33autopilot miles or less in Auto cars whether you're gonna be able to use that or we can use that to get lower insurance rates for insurance companies oh yeah well yeah I think I think we should be able to I mean I think as we
1:05:48can show statistics on on accidents or both I think it should it should translate to lower insurance rates and we'll have to work with insurance companies to make sure that they are properly factoring in the actual action
1:06:05rate of the model and model s and the X because the our our injury rate is substantially lower than I think maybe any car on the road but certainly it's it's if it's not the lowest it's certainly one of the lowest and I forgot
1:06:20like an important announcement at 2:00 p.m. today we did our billion smile for Tesla
1:06:37it house motox looking in terms of safety sari has the housemother wax looking in terms of safety and Roman so marlax I think will have the lowest probability of injury of any sedan I mean the tests haven't been completed
1:06:52yet but I think it's it's headed towards having the lowest probability of injury of any sort of any SUV and certainly the the low center of gravity with the battery pack in the flow pan is incredibly helpful because the role of a
1:07:07susceptibility is extremely low it's very difficult to get the the model x2 to roll over and and we've completed our internal or almost all of our internal crash tests and it's it's shaping up to
1:07:24be five-star in every category and every subcategory like the Model S so it's yeah in fact I think probably
1:07:39safety is not something we emphasize enough about the Model S and the X because a lot of people you know sort of they'll hear five-star and I think okay well aren't like most cars five-star well that's actually not the case only about 1% of cars off five-star in every
1:07:55category and subcategory so like if you see five-star most the time they sort of rounded up their GPA there so it's it's only about 1% or if I've shown every set care except Larry and then the the actual calculation safety is is a is
1:08:11this a Cistus it's a statistical figure which you can access on the d-o-t website but is not something that they they like to promote but it's it's there and at least last time I checked the
1:08:26Model S actually hit the lowest probability of injury of any car ever tested this is extremely important and not well not well appreciated so the it's it's that you can't be there isn't a safer car so it's really if you care
1:08:41about safety of yourself and your family and friends this is the the best choice Keith Lambert shareholder on the announcement of the powerwall there was a mention about the zero emission vehicle credits and the question was unanswered and it relates to the swap
1:08:57down in Harris Ranch and the ability to make an appointment or get a phone number to make the appointment so you can do this well and as far as the expansion of these superchargers what is the lifetime of free charging per
1:09:15vehicle and is what is the accounting for it when you sell a car so yeah we have the basically the LA to San Francisco pack swap capability in place and I believe all Model S owners in this
1:09:33sort of California you know area have been invited at this point to try it out and what we're seeing is just a very low take rate for the for the faction off station so we did an
1:09:48initial round of invitations we did basically like like 200 invitations and and I think there were a total of four or five people that wanted to do that and they all did it just once so like
1:10:05okay it's clearly not very popular and then we then we say well let's expand that invitation to all customers and but I would expect that that sample that initial sample group is that all
1:10:20customers roughly behave like that initial sample group it's just people don't care about pack swap the the superchargers are fast enough that in a few if you do if you're driving from a Leo San Francisco and you start a trip at 9:00 a.m. by the time you get to say
1:10:36noon you want to stop and you want to you know stretch your legs I hit the restroom grab a bite to eat grab coffee and be on your way by that time the car is charged and ready to go and it's free so it's like why would you do the pack
1:10:52swap it doesn't make much sense but and we will pack stuff into the car because we weren't sure if people would want to choose to pack swap or not we thought people would prefer supercharging we weren't sure so that's why we both pack a pack swap capability and and you know
1:11:10but based on what we're seeing here it's it's unlikely to be something that's worth expanding in the future unless something changes for the superchargers as we've said in the initial press
1:11:25release the superchargers are are free it's it's basically free long distance for for life forever so free long distance forever is is what the superchargers are providing now there are a few people who are like quite
1:11:40aggressively using it for local super charging and we will sort of stand there just a reminder note that it's cool to do this occasionally but it's not it's it's meant to be a long-distance thing but but it is it is free long distance
1:11:55forever and it's basically built into the cost of the car and we're based on what we're seeing in terms of the economics it looks quite supportable and of course we've gone super fast with the
1:12:11superchargers so the you know most of the superchargers do not yet have solar and a battery backup but over time we're gonna we're going to put solar over every supercharger where that's where
1:12:26it's possible to do so or if it's not possible to so make sure that we're purchasing power that is generated in a renewable manner so that the entire supercharger network is powered by by sunlight
1:12:45hi my name my name is Ilya sutskever shareholder I'd like you to say a few words about the auto pilot specifically when it will become a fully when what is do you expect the timeline for when the auto pilot will be a fool go to sleep in
1:13:02the car solution given the rate in which you see it's being developed and given what you know about how quickly regulation and laws can change to accommodate that well I think from a
1:13:17technical feasibility standpoint I mean I think it'll be technically possible in approximately three years so I think well I I suspect we'll be able to achieve that in about three years now
1:13:33it will take some period of time after that for regulators to accept that that it's okay to you know just go to sleep in the car so I would imagine it's some something like a couple years maybe three years
1:13:49anyway from one to three years I don't really know cuz it's not really something that control after it's shown to work and we can compile a great deal of evidence statistically to compare what the computer would have done versus
1:14:05a person over billions of miles and we show with height with the winner would have within a very high confidence interval that it's cool for the computer to drive you home so yeah technically likely in three
1:14:23years one to three years after that before regulators approve it's better game at best but it's not something in my control and it might vary by country and by state within various countries but that's the the rough rough timing that's
1:14:41my best guess right now but but it is interesting like what I've found you know with with both narrow and deep AI is that with each passing year my estimate for when it happens gets closer
1:14:59this is you know both interesting and alarming like it's excited exciting and alarming so hi my name is Kelvin yoga and I'm a shareholder I'm also a member
1:15:14of the I Triple E microwave symposium which takes place in San Francisco next year one of our main missions is to encourage young engineers and university students to get involved with engineering so what we've been seeing recently is the kind of a drop-off in
1:15:29interest among diverse groups as well as women in engineering which starts around middle school range so I was wondering if you could comment on any activities that Tesla is participating in or conducting in terms of helping education
1:15:46and inspiring young people to get involved with engineering well I mean we do cool products that require engineering so hopefully that's a reason like people think I think maybe they'd like to work for Tesla Tesla's kind of
1:16:01an engineering centric company so maybe that would encourage them to do engineering but I mean it is super-important that Tesla stay focused on the goal of accelerating the advent of sustainable transport and sustainable energy there are a lot of things that we could do that would be all these awesome
1:16:17social goods but if we if we divide our energies over many social goods we risk accomplishing none of them so so we've got to stay focused on this fundamental good that we're trying to achieve as a primary thing and then you know once we sort of are over the hump in particular
1:16:33once we have like a mass-market affordable electric car that's great then I think we can start to to try to do other things but but we really need to stay focused on that goal for now are you presently participating in the university related research or involving
1:16:48institutions of learning in your product development yeah I mean we have relations with a number of universities and number of research groups particularly as it relates to improving battery cell chemistry so it certainly encouraged groups that are making
1:17:03advancements in any any technology that improves cars electric cars or autonomous driving to get in touch with Tesla and see if there's something some way to work together I would also like to thank you thank you and invite you to speak at
1:17:18our conference next year thank you all right thanks I think we'll do the thing that the last question all right what was that for you you've gone well over the time you're so you're late for
1:17:33your next meeting alright thank you [Applause]