Tesla, Inc.

Good afternoon, everyone, and welcome to Tesla's second quarter 2024 Q&A webcast. My name is Travis Axelrod, Head of Investor Relations, and I'm joined today by Elon Musk, Debov Taneja, 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 link as this webcast. During this call, we will discuss our business outlook and make forward-looking statements. These comments are based on our predictions and expectations as of today. 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. Before we jump into Q&A, Elon has some opening remarks. Elon. Thank you.

So to recap, We saw a large adoption exploration in EVs, and then a bit of a hangover as others struggled to make compelling EVs. So there have been quite a few competing electric vehicles that have entered the market, and mostly they have not done well, but they have discounted their EVs very substantially, which has made it a bit more difficult for Tesla. We don't see this as a long-term issue, but really as fairly short-term. And we still firmly believe that EVs are best for customers and that the world is headed for a fully electrified transport, not just of cars, but also aircraft and boats. Despite many challenges, the Tesla team did a great job executing, and we did achieve record quarterly revenues. Energy storage deployments reached an all-time high in Q2, leading to record profits for the energy business. And we're investing in many future projects, including AI training and inference and a great deal of infrastructure to support future products. We won't get too much into the product roadmap here because that is reserved for product announcement events. But we are in fact to deliver a more affordable model in the first half of next year. by far the biggest differentiator for Tesla is autonomy. In addition to that, we have scale economies and we're the most efficient electric vehicle producer in the world. While others are pursuing different parts of the AI robotics stack, we are pursuing all of them. This allows for better cost control, more scale, quicker time to market, and a superior product. applying not just to autonomous vehicles, but to autonomous humanoid robots like Optimus. Regarding full self-driving and Robotaxi, we've made a lot of progress with full self-driving in Q2, and with version 12.5 beginning rollout, we think customers will experience a step change improvement in how well supervised full self-driving works. Version 12.5 has five times the parameters of 12.4 and will finally merge the highway and city stacks. So the highway stack at this point is pretty old. So often the issues people encounter are on the highway. But with 12.5, we finally merged the two stacks. I still find that... Most people actually don't know how good the system is. And I would encourage anyone to understand the system better to simply try it out and let the car drive you around. One of the things we're going to be doing just to make sure people actually understand the capabilities of the car is when delivering a new car and when picking up a car for service to just show people how to use it. and just drive them around the block. Once people use it at all, they tend to continue using it. So it's very compelling. And then this, I think, will be a massive demand driver. Even unsupervised full self-driving will be a massive demand driver. And as we increase the miles between intervention, it will transition from supervised full self-driving to unsupervised full self-driving, and we can unlock massive potential in the fleet. We postponed the sort of RoboTaxi product unveil by a couple months where it's shifted to 10-10, so the 10th of October. And I wanted to make some important changes that I think would improve the robot taxi, the main thing that we're going to show. And we're also going to show off a couple of other things. So moving it back a few months allowed us to improve the robot taxi as well as add in a couple other things for the product unveil. We're also nearing completion of the South expansion of GigaTexas, which will house our largest clip training cluster to date. This will be an incremental 50,000 H100s plus 20,000 of our hardware 4 or AI5 Tesla AI computer. With Optimus, Optimus is already performing tasks in our factory. And We expect to have Optimus production version one and limited production starting early next year. This will be for Tesla consumption. It's just better for us to iron out the issues ourselves. But we expect to have several thousand Optimus robots produced and doing useful things by the end of next year in the Tesla factories. And then in 2026, ramping up production quite a bit. And at that point, we'll be providing Optimus robots to outside customers. They'll be production version two of Optimus. For the energy business, this is growing faster than anything else. We're really demand constrained rather than production constrained. So we're ramping up production in our US factory, as well as building our mega factory in China that should roughly double our output. Maybe more than double, maybe triple, potentially. So in conclusion, we're super excited about the progress across the board. We're changing the energy system, how people move around, how people approach the economy. The undertaking is massive, but I think the future is incredibly bright. I really just can't emphasize just the importance of autonomy for the vehicle side and for Optimus. Although the numbers sound crazy, I think Tesla producing at volume with Unsupervised MSD essentially enabling the fleet to operate like a giant autonomous fleet. And it takes the valuation, I think, to some pretty crazy number. ARK Invest thinks on the order of $5 trillion. I think they're probably not wrong. And long-term Optimus, I think, achieves a valuation several times that number. I want to thank the Tesla team for strong execution and looking forward to exciting years ahead.

Great. Thank you very much, Elon. And Veblav has opening remarks as well.