Tesla, Inc.

Good afternoon, everyone, and welcome to Tesla's third quarter 2024 Q&A webcast. My name is Travis Axelrod, Head of Investor Relations, and I'm joined today by Ivan Musk, Devat Taneja, and a number of other executives. Our Q3 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 for 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, as someone saying It's something that whatever industry I've seen year over year declines in order volumes in Q3, Tesla at the same time has achieved record deliveries. In fact, I think if you look at EV companies worldwide, to the best of my knowledge, no EV company is even profitable. And to the best of my knowledge, there was no EV division of any company, of any existing auto company that is profitable. So it is notable. that Tesla is profitable despite a very challenging environment. And this quarter actually is a record Q3 for us. So we produced our 7th million vehicle actually just yesterday. So congratulations to the teams that made it happen in Tesla. That'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 mega pack and Powerwall. And as people know, on October 10th, we laid out a vision for an autonomous and electric future that I think is very compelling. 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. Not 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 Ys operating fully autonomously the entire night, carrying thousands of people with no incidents the entire night. And for those who went there, it's worth emphasizing that the siren cab had no steering wheel or brake or accelerator pedals. Meaning there was no way for anyone to intervene manually, even if they wanted to. And 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 sales growth next year? And at the risk of, to take a bit of risk here, I do want to give some rough estimate, which is I think 20 to 30% vehicle growth next year. you know, notwithstanding negative external events, like if there's some force majeure events, like some big war breaks out or interest rates go sky high or something like that, then, you know, we can't overcome massive force majeure events. But I think with our lower cost vehicles, with the advent of autonomy, something like a 20% to 30% growth next year is my best guess. And then cybercap reaching volume production in 26. I do feel confident of cybercap. Reaching volume production 26, not just starting production, but reaching volume production at 26 and that. You know. That that that should be substantial, but we were aiming for at least two million units a year of cybercap. That will be in more than one factory, but. I think it's at least two million units here, maybe four million ultimately. So yeah, these are just my best guesses, but if you ask me what my best guess is, those are my best guesses. The cell 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. net 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. Which is not quite there yet, but we're close to being there, which I think is extremely exciting. And we've got a lot of ideas to go well beyond that. So if I think there's, if we execute well, the 4680, we'll have the Tesla internally produced cell will be the most cost competitive cell in North America. A testament to a tremendous amount of hard work there by the team. So that's a rule. We'll continue to buy a lot of cells from our competitors. to make cells just internally. So I don't want to set off any alarm bells here. We're obviously 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, but I think it is some good news that the Tesla internal cell is likely to be the most competitive in the US. So with 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, the 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. So it's just all neural nets. And the release of actually smart summon. We try to have a sense of humor here at test. And we're also so that's 12.5. Version 13 of FSD is going out soon. Ashok will elaborate more on that later in the call. We expect to see roughly a 506 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 we'll bring at least three orders 90. So. That's that's a very dramatic improvement in the course of the year. And we expect that trend to continue next year. So. The current the current internal expectation. Besides internal expectation for. The Tesla FSD having Longer miles between human is the second quarter of next year. Which means it may end up being the third quarter, but it's it's next. It seems extremely likely to be next year. Sure, do you want to say anything about that?

Yeah, and mentioning miles between clinical 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 my production release 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. And we hope that We continue to scale the neural network, the data, the training compute, etc. By Q2 next year, we should cross over the average human minus for critical intervention, polycollision in that case.