Tesla, Inc.

Good afternoon, everyone, and welcome to Tesla's second quarter 2023 Q&A webcast. My name is Martin Vieca, VP of Investor Relations, and I'm joined today by Elon Musk, Zachary Kirkhorn, and a number of other executives. Our Q2 results were announced at about 3 p.m. Central Time in the update deck we published at the same length as this webcast. During this call, we will discuss our business outlook and make forward-looking statements. These comments are based on our predictions and expectations as of today. Actual events or results could differ materially due to a number of risks and uncertainties, including those mentioned in our most recent filings with the SEC. During the question and answer portion of today's call, please limit yourself to one question and one follow-up. Please use the raise hand button to join the question queue. But before we jump into the Q&A, Elon has some opening remarks.

Elon? Thank you, Martin. So just a Q2 recap. In Q2, we achieved record vehicle production and deliveries and record revenue of about $25 billion in a single quarter. And Model Y became the best-selling vehicle of any kind globally in Q1, surpassing the likes of Corolla and Golf. So it was the number one vehicle of any kind, including vehicles that sell at a far lower price. This is, I think, an incredible achievement by the Tesla team and just a huge thank you to our customers for their support. So and this is this came in spite of high interest rates and a lot of macro uncertainty and nonetheless we managed to achieve operating margin of about 10%. We continue to target 1.8 million vehicle deliveries this year, although we expect that Q3 production will be a little bit down because we've got summer shutdowns to for a lot of factory upgrades. So just probably a slight decrease in production in Q3 for sort of global factory upgrades. In the long term, autonomy we think is going to just drive volume through the ceiling next level. And our sort of future Robotaxi products, dedicated Robotaxi products, we think have quasi-infinite demand. The way we're going to manufacture the Robotaxi is also itself a revolution. It's a revolutionary design made in a revolutionary way. It'll be by far the highest units per hour of any vehicle production ever. Very excited about that. With respect to Autopilot and Dojo, in order to build autonomy, we also need to train our neural net with data from millions of vehicles. I mean, this has been proven over and over again. The more training data you have, the better the results. And I mean, there are times where we see basically in a neural net, basically it's sort of at a million training examples It barely works at 2 million. It's it's slightly works at 3 million. It's like, wow. Okay. We're seeing something, but then you get like 10 million training examples. It's like, it becomes incredible. Um, so, uh, you just, there's just, there's just no substitute for a massive amount of data. Uh, and obviously Tesla has more vehicles on the road, um, that are collecting this data than all of the companies combined by, I think maybe even an order of magnitude. So I think we might have 90% of all, or a very big number. So, you know, the success in AI and dev is a function of talent, sort of unique data and computer resources. And we have outstanding capabilities in all three arenas. And I really just don't know how anyone could do what we're doing, even if they had our software and had our computer, if they did not have the training data. So speaking of which, our Dojo training computer is designed to significantly reduce the cost of neural net training. It is designed to, it's somewhat optimized for the kind of training that we need, which is video training. So, you know, we just see that the need for neural net training, talking about quasi-infinite things, is just enormous. So I think we expect to use both NVIDIA and Dojo, to be clear. But we just see a demand for really vast training resources. And we think we may reach in-house neural net neural net training capability of 100 exaflops by the end of next year. So to date, over 300 million miles have been driven using FSD beta. That 300 million mile number is going to seem small very quickly. It'll soon be billions of miles and tens of billions of miles. And FSD will go from being as good as a human to then being vastly better than a human. We see a clear path to full self-driving being 10 times safer than the average human driver. And between autopilot, dojo computer, our inference hardware in the car, which we call sort of hardware 3, 4, you know, but it's really dedicated it's a it's a high efficiency inference computer that's in the car and our optimus robot tesla is clearly at the cutting edge of uh we continue to build uh release candidates of the cyber truck um on our final production line in austin i'm actually here in austin at the gigafactory um this is the first truck that we're aware of that will have four doors over a six foot bed and foot into a 20-foot garage. So it's sort of biggish on the outside, but it's even bigger on the inside. So I think that's one of the elements of good design is it should feel bigger on the inside than it looks on the outside. And this is no small car, but we really cared about the exterior dimensions of the Cybertruck down to the last millimeter. So it's just trying to get right in the middle of the Goldilocks zone. Not too big, not too small, and then really maximize the utility of the volume. And we can't wait to start delivering it later this year. Some other highlights. Our global supercharging network now stands at over 50,000, roughly 50,000 connectors and over 5,000 locations. As I think a lot of people are aware, the Tesla charging standard uh, which we made open source and it's now called the North American charging standard. Um, we're, we're deeply honored that, uh, Ford GM Mercedes, uh, and many other OEMs, uh, have signed up to, uh, use our connector, uh, and gain access to our charging network. Um, uh, we, we, we strongly believe in helping, um, other car companies to, uh, accelerate the EV revolution and, um, just trying to do the right thing in general. So that's a goal there. Then it's something I think I want to emphasize like very, very strongly. This is a very important point is that Tesla just as with the North American charging standard, although we're not licensed in that case, not licensing, we're just making it available, but we are. very open to licensing our full self-driving software and hardware to other car companies. And we are already in discussions with, early discussions with a major OEM about using the Tesla FSD. So we're not trying to keep this to ourselves. We're more than happy to license it to others. And lastly, our new lithium refinery and cathode facility are progressing well. In conclusion, we continue to focus on making as many calls as we can while maintaining healthy financials. Our artificial intelligence development is obviously entering a new era, and we're incredibly excited about what's to come. Our other businesses, such as Megapack, Supercharging, Service, and whatnot, all started to become a meaningful contributor to overall profitability this quarter. And then lastly, I'd just like to Profusely thank all of our employees who are making a lot of extra effort during uncertain times. Thank you very much for your hard work and the impact you're making.

Thank you very much, Elon.