Tesla Q3 2024 earnings call (2024)
Questions on ElonsFAQ asked in this interview (17)
Transcript
7:15Travis AxelrodGood afternoon everyone and welcome to Tesla's third quarter 2024 Q&A webcast. My name is Travis Vaxelrod, Head of Investor Relations and I'm joined today by Elon Musk, Devop Taneja and a number of other executives.
7:28Travis AxelrodOur Q3 results were announced at about 3pm Central Time in the update deck we published at the same link as this webcast. During this call we will discuss our business outlook and make forward looking statements.
7:40Travis AxelrodThese comments are based on our predictions and expectations. As of today, 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.
7:52Travis AxelrodDuring the question and answer portion of today's call, please limit yourself to one question and one follow up. Please use the raise hand button to join the question queue.
8:02Travis AxelrodBefore we jump into Q and A, Elon has some opening remarks.
8:04Elon MuskElon, thank you. So to recap, someone seeing something that would industry have seen year over year declines in order volumes in Q3. Tesla at the same time has achieved record deliveries.
8:18Elon MuskIn fact, I think if you look at EV companies worldwide, to the best of my knowledge, no EV company is even profitable. And I'm not. To the best of my knowledge, there's no EV division of any company of any existing auto company that is profitable.
8:37Elon MuskSo it is notable that Tesla is profitable despite very challenging automotive environment. And this quarter actually is a record Q3 for us. So we produced our 7th million vehicle actually just yesterday.
8:58Elon MuskSo congratulations to the teams that made
9:00Travis Axelrodit happen in Tesla.
9:01Elon MuskThat's a staggeringly immense amount of work to make 7 million cars. So let's see. And we also have energy storage. Business is growing like wildfire with strong demand for both Megapack and Powerwall.
9:21Elon MuskAnd as people know, on October 10th we laid out a vision for an autonomous analytical future that I think is very compelling. I also thought, you know, the Tesla team did a phenomenal job there with actually giving people an opportunity to experience the future where you have humanoid robots walking among the crowd.
9:43Elon MuskNot, you know, with the canned video presentation or anything, but literally walking among the crowd serving drinks and whatnot. And we had 50 autonomous vehicles. There were 20 cybercaps, but there were an additional 30 Model Y's operating fully autonomously the entire night carrying thousands of people.
10:01Elon MuskThousands of people. Thousands of people drink with no incidents the entire night. So. And for those who weren't there, it's worth emphasizing that the CyberCAP had no steering wheel or brake or accelerator pedals, meaning there was no way for anyone to intervene manually even if they wanted to.
10:27Elon MuskAnd the whole night worked very smoothly. So regarding the vehicle business, we are still on track to deliver more affordable models starting in the first half of 2025. You know, this is, I think probably people are wondering well what should they assume for vehicle vehicle sales growth next year?
10:52Elon MuskAt the risk of, to take a bit of risk here, I do want to give some rough estimate which is I think it's 20 to 30% vehicle growth next year notwithstanding negative external events like if there's some portion of your events, some big wall breaks out or interest rates go sky high or something like that, then we can't overcome massive force mature events.
11:19Elon MuskBut I, I think with lower cost vehicles, with the advent of autonomy, something like a 20 to 30% growth next year is my best guess.
11:31Travis AxelrodAnd
11:34Elon Muskthen Cybercap reaching volume production in 26. I do feel confident of Cybercap reaching volume production in 26. Not just starting production but reaching volume production in 26. And that, you know, that should be substantial.
11:50Elon MuskBoth. We're aiming for at least 2 million units a year of cybercamp. That'll be in more than one factory. But I think it's at least 2 million units a year, maybe 4 million ultimately.
12:06Elon MuskSo yeah, these are just my best guesses. But if you ask me what my best guess is, those are my best guesses.
12:14Travis AxelrodThe
12:17Elon Muskcell 4680 lines. The team is actually doing great work there. The 4680 is rapidly approaching the point where it is the most competitive cell. So when you consider the fully landed, the cost of a battery pack fully landed in the U.S.
12:40Elon Musknet of incentives and duties, the 4680 is tracking to be the most competitive meaning lower cost per kilowatt hour fully considered than any other alternative. We're not quite there yet, but we're, we're close to being there which I think is extremely exciting and we've got several, a lot of ideas to go well beyond that.
13:06Elon MuskSo if I think there's, if we execute well, the 4680 will have the Tesla internally produced cell will be the most cost competitive cell in certainly in North America.
13:25Elon MuskA testament to a tremendous amount of hard work there by the team. So that's the rule. We'll continue to buy a lot of cells from our competitors. Our intent is not to make, to provide, to make cells just internally.
13:40Elon MuskSo I don't want to set up any alarm bells here. We're also increasing substantially our vehicle Output and our stationary storage output. So we need a lot of cells and most of them will still come from suppliers.
13:58Elon MuskBut, but I think it is, it is a some good news that the Tesla internal cell is likely to be the most competitive in the US
14:13Travis AxelrodSo
14:13Elon Muskwith respect to autonomy, as people are experiencing in the cars really from week to week, there are significant improvements in the miles between interventions. So with the new version 12.5, the release of full self driving and cybertruck combining the code into a single stack so that the city driving and the antenna highway driving are one stack which is a big improvement for the highway driving.
14:48Elon MuskSo it's just all neural nets
14:52Tesla Executiveand
14:52Elon Muskthe release of actually smart sermon. We try to have a sense of humor here at DES and we are also. So that's 12.5. Version 13 of FSD is going out soon.
15:12Elon MuskAshok will elaborate more on that later in the call. We expect to see roughly a five or six fold improvement in miles between interventions compared to 12.5. And actually looking at the year as a whole, the improvement in miles between interventions we think will be at least three orders of magnitude.
15:38Elon MuskSo that's a very dramatic improvement in the course of the year and we expect that trend to continue next year. So the current internal expectation, size, internal expectation for the Tesla FSD having longer miles between human is the second quarter of next year, which means it may
16:15Tesla Executiveend up being the third quarter, but
16:16Elon Muskit's next, it seems extremely likely to be next year. Do you want to.
16:22Tesla ExecutiveYeah. Mentioning miles between critical interventions. Like you mentioned Elon, we already made a 100x improvement with 12.5 from starting of this year. And then with V13 release we expect to be 1000x from the beginning, from January of this year on.
16:40Tesla ExecutiveMy production geek software and this came in because of technology improvements going to end to end, having higher frame rate, partly also helped by hardware force, more capabilities, so on.
16:55Tesla ExecutiveAnd we hope that we continue to scale the neural network, the data, the training, compute, et cetera. By Q2 next year we should cross over the average human minus percritical intervention collision.
17:11Elon MuskIn that case, I mean that is just unvarnished. Our internal estimate. Yes. Yeah, so that's not sandbagging or anything else. Our internal estimate is Q2 next year to be safer than human and then to continue with rapid improvements thereafter.
17:39Elon MuskNow a lot vast majority of humanity has no idea that Tesla's compared themselves. So especially for something like a Model 3 or Model yes, it looks like a normal car.
17:57Elon MuskSo you don't expect a normal car to be able to be intelligent enough to drive itself. Cybercap looks different, Cybertruck looks different. But Model y and Model 3 are look, they're good looking cars but look fairly normal.
18:12Elon MuskYou don't expect a fairly normal looking car to have the intelligence, enough AI to be able to drive so but it does. So we do want to expose that to more people and so we're doing.
18:27Elon MuskEvery time we have a significant improvement in the software we'll roll out another sort of 30 day trial so to encourage people to try it again. And we are seeing a significant improvement in adoption.
18:44Elon MuskSo the take rate for FSD is, has improved substantially, especially after the 1010 event.
18:56Elon MuskYeah. So there's no need to wait for robot taxi or Cyber cab for to experience full autonomy. We expect to achieve that next year with the, with our existing vehicle line.
19:10Tesla ExecutiveI wanted to actually spot someone gives a small taste of what it's going to look like. The car able to drive itself to the user within private parking lots.
19:19Tesla ExecutiveCurrently it's speed limited but then it's going to quickly be increased. And we already had more than a million usage terms of smart cement.
19:30Elon MuskYep. So and we actually, we have for Tesla employees in the Bay Area we already are offering a ride handling capability. So you can actually with the development app you can request a ride and it'll take you anywhere in the Bay Area.
19:50Elon MuskWe do have a safety driver for now, but the software required to do that we've developed. I mean. David, do you want to elaborate on that?
20:00Tesla ExecutiveYeah, sure. David. We showed some screenshots of this in the Q1 shareholder real. We've been testing it for the part of the year and the building blocks that we needed in order to build this functionality and deliver it to production we've been thinking about working on for years.
20:17Tesla ExecutiveIt just so happens that we've used those building blocks to deliver great features for our customers in the meantime, such as sharing your profile, synchronizing it across cars so that every single car that you jump into, whether it's another car that you own or a car that somebody's loaned to you, or a rental car that you jump into, looks exactly like yours.
20:35Tesla ExecutiveEverything synchronized, seat mirror positions, you know, media, navigation, everything is the same. Just what you would expect from one of our robo taxis. But you know, we gave that functionality to our customers right now because we built it intending for it to be used in the future.
20:54Tesla ExecutiveWe're releasing that functionality now. All the and then cybersecurity that we knew we were going to need to deliver that Functionality sending a navigation destination from your phone to the vehicle.
21:06Tesla ExecutiveAnd so you know you're doing that now with the ride hailing app. But it's something that we've made available to customers for years. Seeing the progress on a route in the mobile app.
21:17Tesla ExecutiveThat's something you'll need for the ride hailing app. But again we released it in the meantime, so it's not like we're just starting to think about this stuff right now while we're building out, you know, the early stages of our ride hailing network.
21:26Tesla ExecutiveWe've been thinking about this for quite a long time and we're excited to get the function out.
21:30Elon MuskYeah. And we do expect to roll out ride hailing in California, Texas next year to the public. Now the California somewhat there's quite a long regulatory approval process. I think we should get approval next year.
21:47Elon MuskBut it's contingent upon regulatory approval. Texas is a lot faster. So it's can I say like we'll definitely have available in Texas and probably have it available in California subject to regulatory approval and then and maybe some other states actually next year as well, but at least California, Texas.
22:13Elon MuskSo I think that'd be very exciting. That's really a profound change. Tesla becomes more than a sort of vehicle and battery manufacturing company at that point.
22:31Travis AxelrodSo
22:33Elon Muskwe published our Q3 vehicle safety report which shows 1 fat for every 7 million miles of autopilot. That compares to the US average water crash roughly every 700,000 miles.
22:44Elon MuskSo it's currently showing a 10x safety improvement relative to the US average. And we continue to expand our AI training capacity to accommodate the needs of both FSD and Optimus.
22:57Elon MuskWe're currently not training compute constrained.
23:05Elon MuskBig so many factors that the empathy is actually getting so good that it takes us a while to actually find mistakes. When you start getting to where it could take 10,000 miles to find a mistake, it takes a while to actually figure out which is this software bolt better than is softer bolt A better than software Bullet B.
23:32Elon MuskIt actually takes a while to figure it out because neither one of them are making mistakes or take a long time to make mistakes. So that's actually the single one that big so many factors.
23:42Elon MuskHow long does it take us to figure out which version is better? Sort of high class problem. Obviously having a giant fleet is very helpful for breaking the sound.
24:00Elon MuskAnd then with Optimus we showed a massive improvement in Optimus's dexterity and movement on October 10th. And our next gen handed forearm which has 22 degrees of freedom double which is double the prior Handed forearm.
24:17Elon MuskIt's extremely human like and also has much better tactile sensing. It's really, I feel confident saying that we have most advanced humanoid robot by long shot. And we're moreover the only company that really has all of the ingredients necessary to scale humanoid robots.
24:46Elon MuskBecause the things that other companies are missing is that they're missing the AI brain and they're missing the ability to really scale to very high volume production. So you sometimes see some impressive video demos, but they likely they like the localized AI and the ability to scale volume to very high numbers.
25:11Elon MuskAs I've said on a few occasions before, I think Optimus will ultimately be the most valuable part and I think has a good chance of being the most valuable product ever made for the energy business.
25:29Elon MuskThat's doing extremely well. And the opportunity ahead is gigantic. The Lathrop megapack factory reached 200 megapacks a week, which is now a 40 GWh a year run rate. And we have a second factory in Shanghai that will begin with a 20 GWh a year run rate in Q1 next year, next quarter.
25:57Elon MuskAnd that'll also scale up. It won't be long before we're shipping 100 gigawatt hours a year stationary storage at Tesla. And I mean that'll ultimately grow, I think to multiple terawatt hours per year.
26:17Elon MuskIt has to actually in order to have a sustainable energy future. If you're not at the terawatt scale, you, you're not really moving the needle. So if you look at our very complicated last master plan, which I think actually has too much detail, maybe I'll ask Grok to analyze it, shorten it up.
26:40Elon MuskYeah, give us the TLDR on the last master plan. But we showed in that master plan that it is possible to take all of Earth to a fully sustainable energy situation using sustainable energy, power generation and batteries and electric transport.
27:00Elon MuskAnd there are no fundamental material limitations. Like there's not some very rare material that we don't have enough of on Earth. We actually have enough of the raw materials to protect all of human civilization, make it fully sustainable.
27:19Elon MuskAnd even if civilization dramatically increased its electricity usage, it would still be fully sustainable. You know, one way to think of the progress of a civilization, this may sound a little esoteric, but is percentage completion of Kardashev scale.
27:38Elon MuskSo Kardashev scale one would be you're using all the power of, of a planet. We were. We're currently less than 1% on CarShip Level 1. Level 2 would be using all the power of the sun and level three, all the power of the galaxy.
27:57Elon MuskSo we've got a long way to go. Long way to go. When you think in Cartier ship terms, it becomes obvious that the by far the biggest source of energy is the sun.
28:13Elon MuskEverything else is in the noise. So.
28:24Elon MuskIn conclusion, Tesla is focused on building the future of energy, transport, robotics and AI. And this is a time when others are just focused on managing around near term trends.
28:35Elon MuskWe think what we're doing is the right approach and if we execute on our objectives, and I think we will, Tesla, my prediction is Tesla will become the most valuable company in the world, probably by a long shot.
28:52Elon MuskI want to thank the Tesla team once again for strong execution in a tough operating environment and we're looking forward to building an incredibly exciting future. Thank you.
29:04Travis AxelrodGreat. Thank you very much Elon. And that Bob has some opening remarks as well.
29:08Vaibhav Taneja (CFO)Thanks. Our Q3 results were overall positive and once again demonstrate the scale to which businesses evolved over the years. With the generation of record operating cash flows of 6.3 billion, automotive revenues grew both quarter on quarter and year on year.
29:26Vaibhav Taneja (CFO)While we had unit volume growth, we did experience reduction in ASPs primarily due to the impact of financing incentives. As a reminder, we are providing these incentives primarily using third party banks and financial institutions and recognize the cost of these incentives as an upfront reduction to them.
29:46Vaibhav Taneja (CFO)We released FSD for Cybertruck and other features like actually smart server like Tila talked about In North America which contributed 326 million of revenues in the quarter. We continue to see elevated levels of regulatory credit sales with over 2 billion of revenues so far this year.
30:05Vaibhav Taneja (CFO)Expand on this at an industry level, China continues to outperform US and Europe by a factor of three and if there is something to be learned from that, this gives a signal of what is to come.
30:19Vaibhav Taneja (CFO)In other regions as customers acceptance of EV grows, we feel that is the right strategy to build affordable and more compelling needs. Our focus remains on growing unit volume while avoiding a buildup of inventory.
30:35Vaibhav Taneja (CFO)To support this strategy, we're continuing to offer extremely compelling vehicle financing options in every market. When you compare any vehicle in our lineup with other OEMs, we believe our vehicles provide much better value, particularly when you consider the safety features, performance and unparalleled software functionalities like David also talked about include also what Ashok had talked about around autonomy, music options, parental controls and much more.
31:09Vaibhav Taneja (CFO)While every vehicle in our lineup comes up with these capabilities, there is an awareness gap not just with buyers, but at times even with existing owners. We plan on Making these more visible in our interactions with both existing and future customers.
31:26Vaibhav Taneja (CFO)Automotive margins improved quarter over quarter as a result of FSD features release discussed before. Increase in our overall production and delivery volume, Continued benefit from commodity pricing and more localized deliveries in region which resulted in lower freight and duties.
31:44Vaibhav Taneja (CFO)Sustaining These margins in Q4, however, will be challenging given the current economic environment. Note that we are focused on the cost per vehicle and there are numerous work streams cost without compromising on customer experience.
32:02Elon MuskYeah, something that's a helpful. Hopefully a helpful macro trend is if there's a decline in interest rates, this has a massive effect on automotive demand. The vast majority of people is or the demand is driven by the monthly payment.
32:22Elon MuskCan they afford monthly payment? So most likely we'll see continued declining interest rates which helps with affordability vehicles.
32:30Vaibhav Taneja (CFO)Yeah, I mean that is one trend which we observed in the industry that you know, because of the affordability being impacted because of interest rates, people are holding on to the cars longer, especially in the US and that is actually having an impact on the overall industry too.
32:52Vaibhav Taneja (CFO)As we discussed earlier. As we discussed in private orders, energy deployments fluctuate quarter over quarter due to customer readiness, location of orders being fulfilled and not necessarily an indicator of demand or production within the quarter.
33:10Vaibhav Taneja (CFO)While we did see a decline in Q3, we expect to grow deployment sequentially in Q4 to end the year but more than double of last year energy margins in Q3 for a record at more than 30%.
33:25Vaibhav Taneja (CFO)This is a function of mix of projects being deployed in the quarter. Note that there will be fluctuation in margins as we manage through deployments and our inventory. Our pipeline and backlog continue to grow quarter over quarter as we fill our 2025 production slots.
33:43Vaibhav Taneja (CFO)And we are doing our level best to keep up with the demand. Just coming back on automotive margins. I talked about. Sorry, I talked about what is happening. One other thing which I want to also share is that we're.
34:00Vaibhav Taneja (CFO)That you know, we will continue to keep whatever we can. Like I said before about squeezing out the cost. But this is something which we also are very capable of.
34:13Vaibhav Taneja (CFO)I mean just in Q3 we reached our lowest cost per vehicle and that is the trend which we want to keep focus on then going on to service. Another, we continue to show improvements in Q3.
34:27Vaibhav Taneja (CFO)This was a result of better performance both in our service business, which includes collision part sales and merchandise and continued growth in supercharging. These fleet based revenues will continue to grow as the overall fleet size increases.
34:42Vaibhav Taneja (CFO)Our operating expenses declined Quarter over quarter on a year, on year basis. This is partially due to the restructuring we undertook in Q2. Cost saving from these initiatives were partially offset by increase in costs related to our AI efforts.
34:58Vaibhav Taneja (CFO)We've started using the GPU cluster based out of our factory in Austin ahead of schedule and are on Track to get 50k GPUs deployed in Texas by the end of this month.
35:08Vaibhav Taneja (CFO)One thing which I'd like to elaborate is that we're being very judicious on our AI compute spend too and saying how best we can utilize the existing infrastructure before making further investments.
35:22Vaibhav Taneja (CFO)On the CAPEX front, we had over three and a half billion in the quarter. This was a sequential increase largely because of investments in AI compute. We now expect our CAPEX for the year to be in excess of 11 billion.
35:37Vaibhav Taneja (CFO)We shared our vision for the future at the V Robot event at the beginning of the month. The Tesla team is hyper focused on delivering on that version. All efforts are underway to make it a reality.
35:48Vaibhav Taneja (CFO)While we achieved significant progress this year, it will take time to get this as we pioneer new and incredibly complex technologies and navigate a fragmented regulatory landscape. Future is incredibly bright and I want to thank the Tesla team once again for all their heart.
36:08Travis AxelrodGreat, thank you very much Kebab. Now we'll go to investor questions. The first one is, is Tesla still on track to deliver the more affordable model next year as mentioned by Elon earlier?
36:19Travis AxelrodAnd how does it align with your AI product roadmap?
36:23Tesla ExecutiveSure, I mean as Elon and Bible both said, we are in plan to meet that in the first half of next year. Our mission has always been to lower the cost of our vehicles to increase the adoption of sustainable energy and transport.
36:36Tesla ExecutivePart of that is lowering the cost for current vehicles, which is where all of the personally owned vehicles that we sell today come in. But the next stage in that really is a fits into AI roadmap is when we bring in robotaxis which lowers the initial cost of getting into an EV and those.
36:52Tesla ExecutiveThat's really where we see the marriage of EV roadmap and the AI roadmap.
36:59Elon MuskIt'll be like with incentive sub 30k which is kind of a key threshold.
37:08Travis AxelrodGreat, thank you very much. Similar question next. When can we expect Tesla to give us the $25,000 non robotaxi regular model
37:19Elon Muskwe're not making it on?
37:21Tesla ExecutiveYeah, all our vehicles today are Robotech.
37:23Elon MuskI think we've made very clear that the future is autonomous. I mean it's going to be. I actually said this many years ago, but that My strong belief, and I believe that is panning out to be true.
37:39Elon MuskSo it'll be very obvious in retrospect, is that the future is autonomous electric vehicles and non autonomous gasoline vehicles in the future will be like riding a horse and using a flipboard.
37:55Elon MuskIt's not that there are no horses. Yeah, there are some horses, but they're unusual, they're niche and, you know, so, so it is. Everything's going to be electric, autonomous.
38:10Elon MuskI think this is, should be frankly, blindingly obvious at this point that that is the future. So a lot of automotive companies, most automotive companies have not internalized this, which is surprising because we've been shouting this from the rooftops for such a long time and it will accrue to their detriments in the future.
38:35Elon MuskBut all of our vehicles in the future, we today, yes, all vehicles that we've really made, all the 7 million vehicles, the vast majority are capable of autonomy. And you know, we're currently making on the order of 35,000 autonomous vehicles a week.
38:56Elon MuskIf you compare that to say Waymo's entire fleet, it's less than. They have less than a thousand cars. We make 35k a week.
39:03Vaibhav Taneja (CFO)Yeah. And our cars look normal.
39:06Elon MuskYeah, they mostly look normal. Cybertruck looks. Yes, thankfully, you know, looks abnormal. And then the, you know, Cyber Cab robo taxi, you know, we wanted to have something futuristic looking and I think it does look futuristic.
39:25Elon MuskAnd it's worth noting with respect to the Cyber Cab, it's not especially not just a revolutionary vehicle design, but a revolution in vehicle manufacturing that is also coming with the Cyber Cab.
39:39Elon MuskThe cycle times, like the units per hour of the Cybercap line is like, this is just really something special. I mean, this is probably, yeah, half order of magnitude better than other car manufacturing lines.
40:01Elon MuskLike, like, not in the same league is what I'm saying. Not in the same league. So, so it's, it's, you know, and I, I said like several years ago that the, maybe the most, the hardest Tesla product copy will be the foundation.
40:21Elon MuskYeah, just like buy a factory.
40:26Tesla ExecutiveYeah, you can't reverse engineer a factory except you buy it.
40:28Elon MuskYeah, it's like, you know.
40:32Tesla ExecutiveYeah.
40:34Elon MuskSo the, and as we, so we're rapidly evolving in manufacturing technology. So anyway, there's like, basically, I think having a regular 25k model is pointless. Yeah, it would be silly.
40:50Elon MuskLike it would be completely at odds
40:51Tesla Executivewith what we believe in autonomous world. What matters is the lowest cost per mile of efficiency of that vehicle. And that's what we've done with the rope Taxi.
41:00Travis AxelrodExactly.
41:00Elon MuskAutonomous. It's fully considered. Cost per mile is what matters. And if you try to make a car that is, you know, essentially a hybrid, manual, automatic, cards, it's not going to be as good as a dedicated autonomous car.
41:21Elon MuskSo yeah, Cyber Cab is just not going to have steering wheels and pedals. It's fully designed, optimized for autonomy. It'll cost on the order of cost, roughly 25k. So it is a 25k car and you can, you won't be able to buy one exclusively if you want.
41:45Elon MuskSo just what happens during the. You don't need them.
41:51Travis AxelrodGreat, thank you very much. The next question is what is Tesla doing to alleviate long wait times at service centers?
42:00Tesla ExecutiveSo we aim on solving problems at the source. So at the factory, before they can even affect our customers, we believe the best service is no service. And yeah, really is don't even have
42:11Elon Muskthem if the car doesn't break.
42:12Tesla ExecutiveYeah, exactly.
42:13Elon MuskThat's the best thing.
42:13Tesla ExecutiveDon't see anyone with the test shirt. You either do it, fix the issue upstream or even remotely do it through software. They can be at work or at
42:21Elon Muskhome and you know, car can be
42:23Tesla Executiveparked and we address and fix the issue and we partner the field with service to make sure we're looking at the same issues. And Additionally, just in Q3 and Q4 of this year alone we, we have opened and will open in total at nearly 70 locations.
42:37Tesla ExecutiveAnd in North America we significantly expand the size of each location and have doubled the size last year compared to this year.
42:45Elon MuskYeah, I think it's like actually a lot of merit to having large service centers because you can have specialization of labor, you can start to approach. Yeah, it should be more factory like where you can have dedicated lanes for particular types of servers.
43:02Elon MuskAnd it's way easier for somebody to become expert in a few different types of repairs than in every repair.
43:07Tesla ExecutiveExactly. This has helped us with the base set, these heavy repairs like clogging up the lane.
43:13Travis AxelrodThey've dedicated lanes for different type of
43:14Tesla Executiverepairs and so it's through that matters and really treating it like a factory.
43:20Elon MuskYeah, this is where it Tesla structure. I think Tesla has a structural advantage relative to the rest of the auto industry because we make the cars and we service the cars.
43:30Elon MuskWhereas I think there's a bit of a conflict of interest with the dealer model and the sort of traditional oem a dealer model where the dealerships make most of their money on service and so they obviously are disincented to reduce the servicing cost.
43:49Elon MuskWhereas in our case we are Incented to reduce the servicing costs because we, we carry that service in cost and we've got a good feedback loop with our, with our cars.
43:59Tesla ExecutiveExactly.
43:59Elon MuskYeah.
44:00Tesla ExecutiveWe're reviewed with the factory with the service leaders together and send people from the factories to the field and field to the factory to see it firsthand, provide suggestions for you know, manufacturing as well as for engineering on design.
44:12Elon MuskYeah. So I view this as a structural, fundamental structural advantage of Tesla versus the rest of the
44:21Tesla Executivedoing a bunch of work on the software side not only to automate you know, diagnostics so identifying
44:27Elon Muskyou know, what needs to be done
44:28Tesla Executiveto a car before it comes into service but also automating all of the preparation work and aligning all the resources that are necessary in order for the car to be very efficiently worked on once it arrives.
44:39Tesla ExecutiveSo the parts are there like the lift is scheduled, the technician schedule like everything.
44:44Elon MuskThis is what's wrong with, with me and tells us tell the service center
44:47Travis Axelrodthe car, get everything ready in a bank.
44:49Elon MuskYeah, please fix me and this is what's wrong. Yeah.
44:54Tesla ExecutiveInstead of customer trying to translate the car is telling us directly and we're pulling that.
44:58Elon MuskYeah, yeah. You don't need most time, you don't need to diagnose the car when it arrives the car. Yeah. This is like again a fundamental technology advantage and structural advantage compared to the rest of the order industry.
45:12Vaibhav Taneja (CFO)I think it's underappreciated as to what all we are able to do and that's why because like you said before, most of our cars except for cybertruck look the same.
45:23Travis AxelrodRight.
45:23Vaibhav Taneja (CFO)So people don't realize that it has so much capability.
45:28Elon MuskYeah, yeah. They look better than other cars but they're not like obviously like super futuristic. So yeah.
45:37Travis AxelrodGreat, thank you very much. The next question is please provide an update on the semi. What will the next stage of growth look like and when will FSD be ready?
45:47Tesla ExecutiveSure. So as you we posted in the earnings deck, we're progressing swiftly on the build of the semi factory in our gigafactory in Reno. We've released all our major capital expenditures for that program and we're on track to start pilot builds in the second half of next year with production starting in the first first half of 2026 and ramping really throughout the year to full production semi.
46:09Tesla ExecutiveYou know growth will largely depend on our customers adoption of the product.
46:12Elon MuskWell I don't think we're going to be demand limited honestly.
46:14Tesla ExecutiveYeah.
46:14Elon MuskWhich I do say which is like
46:15Tesla Executivea no brainer for the semi because it's Really a commodity of total cost of ownership.
46:20Elon MuskYes, exactly. It's good. We have kind of ridiculous demand for
46:25Tesla Executivethe semi in that world where it's about how much do I spend to make good per mile. It's a no brainer.
46:33Elon MuskYeah. Fundamentally, if you've got a semi where the fully considered cost per mile or per ton of transport is better than say diesel truck, any company that doesn't adopt an electric semi will lose.
46:47Elon MuskIt's not a, it's not a subjective thing. It's like of whether do you like.
46:51Tesla ExecutiveIt's a competitive.
46:51Elon MuskI mean like we want the style, we want, we want to have a beautiful semi truck. But frankly if you made an oculus truck wouldn't matter.
46:59Tesla ExecutiveAnd this is proving so in our fleets and in Pepsi's partner. In fact the Pepsi actually said last week they're having nobody want their drivers don't want to go back.
47:09Elon MuskYeah, yeah. As soon as we give anyone the electric semi, it's, it's like the, that, that's like the choice.
47:16Tesla ExecutiveIt's the what they want to drive.
47:17Elon MuskYeah, yeah, yeah. That's like, like. So they're like, they're more senior like their top drivers. Will they get to drive the tails? The semi is, it's, it's, it's, it's the thing they want to dry.
47:27Elon MuskIt's, it's, it's super fun to drive.
47:29Tesla ExecutiveIt's also very easy to drive.
47:31Elon MuskIt's easy to drive and it holds ass.
47:33Tesla ExecutiveIt's like fast, way too fast.
47:37Elon MuskWell, but I mean like, like, you know, like you've seen like the videos of where like I think like Tesla electric semi, like you know, can go uphill.
47:46Tesla ExecutiveYeah.
47:46Elon MuskSpeeding past like the diesel truck and reading cars.
47:49Vaibhav Taneja (CFO)Yeah.
47:49Elon MuskIn cars. So like it's responsive. It's, you know, you know, you floor it and the truck actually.
47:57Tesla ExecutiveAnd that's a benefit not only for the driver and for the goods, but also for safety in terms of other drivers on the road. You don't get stuck behind the semi.
48:04Tesla ExecutiveYou're not like.
48:05Elon MuskYeah.
48:05Tesla ExecutiveYou know, in a slowdown situation in the on ramp. I mean how that plays into, you know, fsd, which is the second part of the question. All of the semis have been a couple hundred we've deployed already in the.
48:15Tesla ExecutiveAnd the ones that we'll be building next year and throughout the future have all of the hardware and the cameras necessary to deploy fsd. And we're currently training with that small fleet that we have.
48:26Tesla ExecutiveAnd as soon as the fleet is trained and the neural nets are up, you know, we'll get FSD onto that platform.
48:32Elon MuskYeah, I mean it'd be a massive improvement in driver fatigue, you know, because driver safety, we've got sort of the anti jackknife thing software. You know, you don't have to worry about your brakes overheating if you go down, down a steep hill.
48:46Elon MuskBecause, because the, we use regenerative like that, that energy goes back into the pack.
48:53Tesla ExecutiveActually when we leave Reno something it's
48:54Elon Muskjust like, it's, it's like radically better than, than a diesel. Simon.
49:01Travis AxelrodGreat guys, thank you very much. Our next question is when will Tesla incorporate X and Groq in all the Tesla vehicles?
49:12Elon MuskI mean these are relatively small fry things, you know. But yeah, I think we'll keep explaining, you know, what is available in the car on the spot screen and also improving like the browser.
49:28Elon MuskSo like just generally you can access anything you want in the car. In fact, for the Tesla, you know, once you get to full autonomy, you actually want fully a system that is, can do anything.
49:41Elon MuskLike if you want to browse the Internet, if you want to ask AI questions, if you want to watch a movie, if you want to play a video game, if you want to give some productivity thing, you can do anything you want in an autonomous vehicle because you don't need to drive.
49:57Elon MuskSo that's why the Cybercat's got a nice big screen and a great sound system so you can watch it, watch a great movie. It's like being like personal movie theater.
50:10Elon MuskYeah, personal movie theater. Awesome. Yeah.
50:14Tesla ExecutiveThis is why we've been building this functionality, adding gaming to the car, adding movies and other, you know, all sorts of different media applications to the car. Because you know, the cars, that's what you're gonna.
50:24Elon MuskThat's.
50:25Tesla ExecutiveYeah, the cars that we build today. There's some really fun games by the way.
50:27Elon MuskIf people haven't tried it, there's like Castle Doombat and Polytopia and a bunch of really fun games in the car.
50:34Tesla ExecutiveYeah, we're constantly looking at what features to add in extent we're paying attention
50:39Elon Muskto what's most commonly requested by our customers. Yeah, played Castle Doombad.
50:43AnalystYou won't regret it.
50:46Elon MuskGreat.
50:47Travis AxelrodThank you guys very much. The next question is Elon mentioned unsupervised FSD in California and Texas next year. Does that mean regulators have agreed to it in the entire state for existing hardware 3 and 4 years goals?
51:00Elon MuskNo, as we said, as I said earlier, California loves regulation, but they have a pathway. Yeah, I mean there's a pathway, obviously Waymo operates in California, so there's just a lot of forms filled out and a lot of approvals that are required.
51:13Elon MuskI mean, I'd be shocked if we don't get approval next year, but it's just not something we totally control. But I think we will get approval next year in California and Texas and towards Aviary will branch out beyond California, Texas.
51:27Tesla ExecutiveI mean, I think it's important to reiterate this. Like homologating or certifying a vehicle at the federal level in the US is done by meeting FMVSS regulations. All our vehicles today that are produced, that are autonomous capable meet all those regulations.
51:40Tesla ExecutiveThe cyber cattle meet those regulations. And so the deployment of the vehicle to the road is not a limitation. What is a limitation is what you said at the state level where they control autonomous vehicle deployment.
51:49Tesla ExecutiveSome states are relatively easy, as I mentioned, for Texas.
51:52AnalystYeah.
51:52Tesla ExecutiveAnd other ones have halfways like California that may take a little longer. Other ones haven't set up anything yet. And so we will work through those state by state.
52:00Elon MuskI do think we should have a federal.
52:02Travis AxelrodI agree.
52:03Elon MuskAutonomous vehicles should be approved. They just should be. It should be possible too.
52:06Tesla ExecutiveCongress, if you're listening, let's get a federal aviation.
52:09Elon MuskThere should be a federal approval process for autonomous vehicles. I mean that's, that's how the FMBSS started and worked. Federal Motor Vehicle, the F and F and BSS is federal.
52:20Tesla ExecutiveYeah. So I mean in 2017 and 18 that we, you know, as one regulator started looking at it and it's really kind of stalled since then. But we would appreciate and would support helping out with those regulators.
52:29Elon MuskIt really needs to be like a national approval is important. You know, does the Department of Government Efficiency try to help make that happen for everyone? Not just Tesla, obviously, but you know, just like some things in the US are state by state regulated.
52:46Elon MuskLike for example, insurance, like a. It's incredibly painful to do it state by state. 50 states. And I think we should have. This should be a national approval process for autonomy.
53:01Travis AxelrodGreat, thanks, guys. The next question is what is the plan for 2025?
53:08Elon MuskI think we're just talking.
53:10Vaibhav Taneja (CFO)I mean, basically we talked through this. There's a lot going on. Elon already mentioned that we're working on cheaper models to come out. I mean, the work which the team is doing to get the factories ready today to try and make that happen.
53:23Tesla ExecutiveYeah.
53:23Elon MuskBy the way, the amount of work required to make a lower cost car is insanely high. But like, it is harder to get like 20% of the cost out of a car than it is to design the car and build the entire factory in the first place.
53:39Elon MuskIt's like excruciating. And it's. And there's not a lot of movies made about the, the heroes who got 20% of the cost out of a car. But let me tell you, there should be.
53:54Elon MuskIncredibly heroic.
53:55Tesla ExecutiveIt's little changes. It's not like a silver.
53:57Elon MuskYeah, it's like there should be the heroes who got 20% cost out of a car. It's like, damn, I have a lot of respect to them. It's like, you know, I think you probably could make a compelling movie.
54:09Elon MuskBut I, it just. No, no. Like if you actually saw how hard, if people actually saw how hard it was to do that, you'd be like, whoa, that's damn hard.
54:19Tesla ExecutiveJust yesterday we were talking about potting. Yeah.
54:22Elon MuskI mean, honestly, like literally. Yeah, I mean there's, there's a lot of, when I do call it sort of like getting cast up things, it's kind of like, it's like Game of pennies.
54:30Elon MuskIt's like Game of Thrones, but pennies. You know, first approximation. If you've got 10,000 items in a car, very rough approximation, and each of them costs four dollars, then you have a forty thousand dollar car.
54:43Elon MuskSo if you want to make a, you know, a $35,000 car, you're going to get 50 cents on average out of the 10,000 items.
54:51Tesla ExecutiveEvery time.
54:51AnalystEvery part.
54:52Elon MuskYeah. And it's like, you know, and then obviously the best is you delete some parts. In fact, we found we have to delete a lot of parts. I'm very excited about the cybercap design and how we're rethinking the design of a car for the cybercap, designing it for ultra high volume production and then designing machine that builds the machine that I think is also revolutionary.
55:21Elon MuskAnd it's just, there's no other car company that's even trying to do what we're doing. Like I've even heard of it actually. In fact, I'm certain there isn't one.
55:32Elon MuskLike, I think this on your machine that pulls the machine. Like it's inherent. Like it's designed to be like five times better than traditional factory. Like cycle time.
55:53Tesla ExecutiveCycle time and like part deletion. I don't think any other car company has the same level of like integration of thought that we have when it comes to like when you design a part from a white sheet of paper, who's going to make it?
56:07Tesla ExecutiveWhere is it going to be made? How's it going to be shipped? How's it going to be assembled into the vehicle? And like at any one point if something is done in a silo, it becomes a bottleneck of either cost or time or efficiency.
56:19Tesla ExecutiveBut with the, with the robotaxi development like we've done a good job on combining all that and then like blowing up how it's made and saying it should be made this way and rethinking it all so that it's the most efficient factory possible.
56:32Tesla ExecutiveThat shows in our, it will show in our capex efficiency when we deploy it shows in the number of parts, shows in simplicity of vehicle, but also how it performs in terms of like end user.
56:43Vaibhav Taneja (CFO)Yeah, just to close up just on the energy front also in 25 we will have started manufacturing as a manufacturer Shanghai. We'll continue to increase our overall storage deployments.
56:54Vaibhav Taneja (CFO)With Powerwall 3 we plan to continue expanding our supercharging network, getting more OEMs on our network. 4680 cell ramp as Elon talked about, that would keep going. And then also we'll have our lithium refinery starting to produce.
57:11Vaibhav Taneja (CFO)So there's a lot which is going on.
57:15Elon MuskYeah, so many things. I mean like the crazy thing is like Tesla is winning basically on almost every single thing we're doing. If we're not winning now, we're on track to one.
57:26Elon MuskIn arenas where there are entire large companies that that's the only thing they do.
57:32Vaibhav Taneja (CFO)I mean it's, it's a company. There are multiple companies within the company.
57:35Elon MuskYeah, Tesla's like many companies. Like one.
57:38Travis AxelrodYeah, that's it.
57:39Elon MuskThank you guys.
57:41Travis AxelrodJust a few more. What is going on with the Tesla Roadster?
57:46Elon MuskWell I just like to thank our long suffering deposit holders of the Tesla Roadster. The reason it hasn't come out yet is because it is the roaster is not just the icing on the cake, it's the cherry on the icing on the cake.
58:00Elon MuskAnd so you know, our larger mission is to accelerate the progress towards a sustainable energy future. You know, try to do things that maximize the probability that the future is good for humanity and for Earth.
58:16Elon MuskAnd, and so that necessarily means that like the things like that are kind of like deserted. But we'd like, we'd all love to work on the Tesla next gen Tesla Rosary.
58:27Elon MuskIt is super fun and we are working on it but it has to come behind them the more things, the things that have a more serious impact on the good of the world.
58:37Elon MuskSo just thank you to all our long suffering Tesla Royster Deposit Holders. And we are actually finally making progress on that. And we're, we're close to finalizing the design on that.
58:52Elon MuskIt's really going to be something spectacular. You know, a friend of mine, Peter
59:00Tesla ExecutiveThiel,
59:04Elon Musksometimes people think that Peter Thiel and I are rivals. We're really good friends. To be clear, Peter was lamenting how the future doesn't have flying cars. Well, we'll see more to come.
59:18Travis AxelrodYeah, great. Thank you very much. The next one is quite similar to other questions you've had, so I might combine it with, with the final question. So briefly, could you just detail how Robotaxi will roll out.
59:32Travis AxelrodWill it start with a Tesla deployed fleet and then allow customers to add theirs on subscription model? And then will hardware 3 be capable of level 5?
59:46Tesla ExecutiveRegarding the hardware 3, what we saw with 12.5 was it was easier to make flat progress with starting with hardware 4 and figuring out the solution and then backporting it to hardware 3 instead of directly working on hardware 3.
59:58Tesla ExecutiveGiven that hardware 4 has more like fundamental hardware capabilities, I think that trend will continue into the next few quarters as well. Where we first figured the solution rapidly with AI4 and then backported.
1:00:12Tesla ExecutiveRight. The kernels, it just takes longer to develop those things because it's not fundamentally supported in the hardware and it's emulated. But yeah, it's initially working on Hardware four.
1:00:23Tesla ExecutiveBackporting it to hardware three.
1:00:25Elon MuskYeah. So I guess the answer is we're not, we're not 100% sure. But as Sharp mentioned, because by some measures, hardware 4 has really several times the capability of hardware 3.
1:00:43Elon MuskIt's easier to get things to work with hardware 4. And then it takes a lot of effort to sort of squeeze that functionality into hardware 3. And, you know, there is some chance that hardware 3 is, does not achieve the safety level that allows for unsupervised fsd.
1:01:10Elon MuskYou know, there is some chance of that. And if that turns out to be the case, we will upgrade those who have bought Hardware 3 MSD for free. And we have designed the system to be upgradable.
1:01:26Elon MuskAnd it's really what, you know, just sort of switch out the computer type of thing like the camera. The cameras are okay, you know, they're capable, but anyway, we don't actually know the answer to that.
1:01:43Elon MuskBut if it does turn out,
1:01:46Travis Axelrodwe'll
1:01:46Elon Muskmake sure we take care of those who abort MSD on Hot Row three.
1:01:50Travis AxelrodGreat. In the last few minutes that we have left, we will try to get in some analyst questions. The first question will be coming From Pierre Farragut at New Street.
1:02:01Travis AxelrodPierre, please feel free to, free to unmute yourself.
1:02:06AnalystThanks a lot guys for taking my question. I was wondering about like the compute. You're, you're ramping up. So you gave like interesting statistics on how much you have and you said you, you don't feel your compute constraint.
1:02:21AnalystAnd I was wondering, you know, how you are putting to work this additional compute. Is that a game for you of creating like larger and larger models, like next generation of models that are larger the way OpenAI go from GPT3 to GPT4?
1:02:38AnalystOr is that more like you're set on your model and you need to throw more and more compute to accelerate the pace of learning to improve reliability. And then I had a quick follow up, really quick on your rollout in Texas and in there in California next year.
1:02:59AnalystThe plan as you see today is to roll out like a fleet or two with cars that will start with like a supervisory, like some onboard supervision, someone sitting at the wheel just in case and removing the supervisors progressively.
1:03:18AnalystOr are you aiming for going fully fledged without even a human supervisor when you get started?
1:03:27Elon MuskOkay, well, I guess regarding the answer the first part of the question, the, the nature of real world AI is different from say an LLM in that you, you have a massive amount of context.
1:03:41Elon MuskSo that like the, the, you've got case of Tesla 7 or 8 cameras that, you know, 9 up to 9 if you include the internal camera that you've got gigabytes of context and that is then distilled down into a small number of control outputs.
1:04:07Elon MuskWhereas it's like you don't really, it's very rare to have, in fact, I'm not sure any LLM out there can do gigabytes of context. And then you've got to then process that in the car with a very small amount of compute power.
1:04:23Elon MuskSo you know, it's all doable and it's happening. But it is a different problem than what say a Gemini or an OpenAI is doing. And now part of the way you can make up for the fact that the inference computer is, is quite small is by spending a lot of effort on training.
1:04:55Elon MuskAnd just like, just like a human, like the more you train on something, the less, the less mental workload it takes when you try, when you, when you do it, like when the first time, like a human starts driving, it absorbs your whole mind.
1:05:13Elon MuskBut then as you train more and more on driving, get very good, then you, the driving becomes a background task. It only absorbs a small amount of your mental capacity because you have a lot of training.
1:05:26Elon MuskSo we can make up for the fact that the inference computers, it's tiny compared to a 10 kilowatt bank of GPUs because you've got a few hundred watts of inference compute.
1:05:40Elon MuskWe can make up that with heavy training.
1:05:45AnalystSo
1:05:47Elon Muskyeah, that's. And then there's also vast amounts. The actual petabytes of data coming in are tremendous. And then sorting out what training is important of the vast amounts of video training, video data coming in complete, what is actually most important for training, that's also quite difficult.
1:06:15Elon MuskBut as I said, we're not currently training compute constraint. Sh. Do you want to elaborate on that?
1:06:22Tesla ExecutiveYeah. Like you mentioned, the training has both trained larger models, also trained quicker. But in the end we still got to pick which models are performing better. So the validation effort to picking the models, because the miles per intervention is pretty large, we had to drive a lot of milestone closed loop.
1:06:41Tesla ExecutiveWe do have simulation and other ways to get those metrics. Those do help, but in the end that's a big bottleneck. That's why we're not training compute constraint alone.
1:06:53Tesla ExecutiveAnd this other axis of scaling as well, which is a data. Figuring out which data is more useful, that is an important task when you're focusing on that.
1:07:03Elon MuskYeah.
1:07:05Tesla ExecutiveSo as it relates to the second part of your question, Pierre, about safety drivers and rolling it out, each state has different requirements that you know in terms of how many miles and how much time you need to have a safety driver and not have a safety driver.
1:07:16Tesla ExecutiveWe're going to follow all those. We're not going to violate whatever regulations are out there. But safety is a priority. But the goal is obviously at when we're ready and safety is there or we will drive from.
1:07:27Tesla ExecutiveFrom the rideshare car.
1:07:28Elon MuskYeah, I mean, I guess like we, we think that we'll be able to have driverless Teslas doing paid rides next year. Sometime next year.
1:07:41Travis AxelrodAll right, thank you. And our next question comes from Adam Jonas at Morgan Stanley. Adam, please feel free to unmute yourself.
1:07:52AnalystOkay, thanks. Everybody. Just had a question about the relationship between Tesla and xai. Many investors are still not clear how the work at XAI is truly beneficial to Tesla.
1:08:05AnalystSome even take the view that the two companies may even be in competition with each other in terms of talent and tech and even your time. Elon. So what's your message to investors on that relationship between Tesla and xai and where do you see it going over time?
1:08:20Vaibhav Taneja (CFO)Thanks.
1:08:24Elon MuskWell, I should say that, you know, XAI has been helpful to Tesla AI, you know, quite a few times in terms of, you know, things like scaling up, like training, you know, just even like recently in the last week or so, improvements in tolerant training where if you're doing a big training run and a node fails, being able to continue training and easy to recover from under training when XAI has been pretty helpful.
1:09:00Elon MuskSo. But there are different problems. XAI is working on artificial general intelligence or artificial superintelligence. Tesla is trying to make autonomous cars and autonomous robots. They're different problems.
1:09:19Tesla ExecutiveSo
1:09:21Elon Muskyeah, I mean, I think we've
1:09:24Vaibhav Taneja (CFO)said this before also, like not all AI is equal. Right. I mean there's AI is a broad spectrum.
1:09:29Elon MuskYeah.
1:09:30Vaibhav Taneja (CFO)And we have our own swim lanes. Yes. There are certain things which we can collaborate on if needed, but for the most part we're solving different issues.
1:09:39Elon MuskYeah. Tesla's focused on real world AI and as I was saying earlier, it is quite a bit different from an LLM. You have massive context in form of video and some amount of audio that's got to be distilled with extremely efficient inference computer.
1:10:03Elon MuskI do think Tesla's the most efficient in the world in terms of inference compute like because out of necessity we have to be very good at efficient inference. We can't put 10 kilowatts of GPUs in a car.
1:10:25Elon MuskWe've got a couple hundred watts and it's pretty well designed Tesla AI chip. But it's still a couple hundred ones. But they are different problems. I mean it's the stuff that XAID is when it's running inference.
1:10:46Elon MuskI mean it is running inference, answering questions, it's answering tests and questions on a 10 kilowatt rack. It's like, yeah, put that in a car, it's a different problem, please.
1:10:58Elon MuskNo, no, exactly. So, you know, XAI is, because I felt there wasn't, there wasn't a truth seeking digital super intelligence company out there. Like that's what it came down to.
1:11:15Elon MuskThere needed to be a truth seeking like an AI company that is very reverse about being truthful. I'm not saying XAI is perfect, but that's, but that, that, that is at least the explosive aspiration.
1:11:31Elon MuskEven if something is, you know, politically incorrect, it should still be truthful. I think this is very important for AI safety. So anyway, I think AI X, AI will has been helpful to Tesla and will continue to be helpful to Tesla, but they are very different problems.
1:11:51Travis AxelrodGreat.
1:11:55Elon MuskWhat other car company has, it has a world class chip design team like zero. What other car company has a world class AI team like Tesla does. Zero those are all startups that were created from scratch.
1:12:14Travis AxelrodGreat. Thank you Ilan and I think that's unfortunately all the time that we have for today. We appreciate all of your questions and we look forward to you next quarter.
1:12:21Travis AxelrodThank you very much and goodbye.
1:12:38Travis AxelrodSa.