Tesla, Inc.

Good afternoon, everyone, and welcome to Tesla's fourth quarter 2024 Q&A webcast. My name is Travis Axelrod, the head of Investor Relations here at Tesla, and I am joined today by Elon Musk and Vebab Taneja and a number of other executives. Our Q4 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. Before we jump into Q&A, Elon has some opening remarks. Elon?

Thank you. So in summary, in Q4, we set a record and delivered vehicles at an annualized rate of nearly 2 million a year. So congratulations to the Tesla team on excellent work, achieving record production and deliveries. Model Y was the best-selling vehicle of any kind for 2024. That's worth noting. Not just the best electric vehicle, the best vehicle of any kind on Earth, number one, was Model Y. We're staying focused on maximizing volumes and obviously doubling down for, I don't know what, Really, I was going to say doubling down on autonomy, but really, autonomy is like 10x-ing things, frankly. Doubling is not even enough. We made many critical investments in 2024 in manufacturing AI and robotics that will bear immense fruit in the future. Immense. It's, in fact, to such a scale that it is difficult to comprehend. And I've said this before, and I'll stand by it. i see a path i'm not saying it's an easy path but i see a path for tesla being the most valuable company in the world by far not even close like maybe several times more than i mean there is a path where tesla is worth more than the next top five companies combined there's a path to that i mean i think it's like an incredibly it's like a difficult path but it is an achievable path um So, and that is overwhelmingly due to autonomous vehicles and autonomous humanoid robots. So our focus is actually building towards that. And that's what we're laying the ground, we laid the groundwork for that in 2024, we'll continue to lay the groundwork for that in 2025. uh in fact more than lay the groundwork actually so you'd be building the structure be we're building the manufacturing lines um and uh like yeah i'd like setting up for what i think will be an epic 2026 and a ridiculous 27 and 28. ridiculously good that is my prediction um As yet, very few people understand the value of full self-driving and our ability to monetize the fleet. Some of these things I've said for quite a long time, and I know people have said, well, Elon's the boy who cried wolf several times. But I'm telling you, there's a damn wolf in this time. And you can drive it. In fact, it can drive you. It's a self-driving wolf. For a lot of people, their experience of Tesla autonomy is like, if it's even a year old, if it's even two years old, it's like meeting someone when they're a toddler and thinking that they're going to be a toddler forever. But obviously, they're not going to be a toddler forever if they grow up. But if their last experience was like, oh, FSD was a toddler, it's like, well, it's grown up now. Have you seen it? It's like walks and talks. And that's really what we've got. And it's difficult for people to understand this because human intuition is linear as opposed to what we're seeing is exponential progress. So that's why my number one recommendation for anyone who doubts is simply try it. Have you tried it? When's the last time you tried it? And the only people who are skeptical, the only people who are skeptical are those who have not tried it. So you know a car goes a passenger car typically has only about 10 hours of utility per week out of 168 a very small percentage once that car is autonomous my rough estimate is that it is used for at least a third of the hours of the week so call it 50 maybe 35 hours of the week and it can be useful both Cargo delivery and people delivery. So even let's say people are asleep, but you can deliver packages in the middle of the night or resupply restaurants or whatever the case may be, whatever people need at all hours of the day or night. That same asset, these things that already exist with no incremental cost change, just a software update, now have five times or more the utility than they currently have. I think this will be the largest asset value increase in human history. Maybe there's something bigger, but I just don't know what it is. And so people who look in the rearview mirror are looking for past precedent, except I don't think there is one. You know, the reality of autonomy is upon us. And I repeat my advice. Try driving the car. Or let it drive you. So now it works very well in the US, but of course, it will over time work just as well everywhere else. Yeah. So we're working hard to grow our annual volumes. Our constraint this year, our current constraint is battery packs this year, but we're working on addressing that constraint. And I think we will make progress in addressing that constraint. And then things are really going to go ballistic next year and really ballistic in 27 and 28. So So a bit more on full self-driving. Our Q4 vehicle safety report shows continued year-over-year improvement in safety for vehicles. So the safety numbers, if somebody has supervised full self-driving turned on or not, the safety differences are gigantic. And people have seen the immense improvement with version 13 and with incremental versions in version 13. And then version 14 is going to be yet another step beyond that that is very significant. We launched the Cortex training cluster at Gigafactory Austin, which was a significant contributor to FSD advancement. And we continue to invest in training infrastructure at our Texas headquarters. So the training needs for Optimus humanoid robot are probably at least ultimately 10x. what's needed for the car, at least to get to the full range of useful roles. How many different roles are there for a humanoid robot versus a car? A humanoid robot has probably 1,000 times more uses and more complex things than a car. That doesn't mean the training scales by 1,000, but it's probably... know 10x now you can do this progressively so it doesn't mean like hotels are going to spend like 500 billion dollars in training compute um uh because we will obviously train optimus to do enough tasks to match the output of optimus robots um but and obviously the cost of training is dropping dramatically with time so but it is it is um This is one of those things where I think long-term optimists will be... Optimists has the potential to be north of $10 trillion in revenue. It's really bananas. So that you can obviously afford a lot of training compute in that situation. In fact, even $500 billion training compute in that situation would be quite a good deal. Yeah. The future is going to be incredibly... different from the past that's for sure we live at this unbelievable inflection point in human history so um yeah so you know the proofs the proof is in the pudding so we're going to be launching unsupervised full self-driving uh as a paid service in austin in june so uh In a talk with the team, we feel confident in being able to do an initial launch of unsupervised, no one in the car, full self-driving in Austin in June. We already have Teslas operating autonomously, unsupervised full self-driving at our factory in Fremont, and we'll soon be doing that at our factory in Texas. So thousands of cars every day are driving with no one in them at our Fremont factory in California. They will soon be doing that in Austin and then elsewhere in the world for the rest of our factories, which is pretty cool. And the cars aren't just driving to exactly the same spot because obviously it all went and collided at the same spot. The cars are actually programmed with what lane they need to park into to be picked up for delivery. So they're driving from the factory end of line to their destination parking spot to be picked up for delivery to customers. And they're doing this reliably every day, thousands of times a day. It's pretty cool. Like I said, the Teslas will be in the wild with no one in them in June in Austin. so what i'm saying is this is not some far-off mythical situation it's literally you know five six months away five months away type of thing um and while we're stepping into putting our toe in the water gently at first just to make sure everything's cool um our solution our sort of our AI solution. It does not require high-precision maps of a locality. So we just want to be cautious. It's not that it doesn't work beyond Austin. In fact, it does. We just want to put a toe in the water, make sure everything is okay, then put a few more toes in the water, then put a foot in the water with safety of the general public and those in the car as our top priority. with regard to optimus um obviously i'm making you know these revenue predictions predictions that sound absolutely insane i realize that um but but they are i think they will prove to be accurate um yeah um yeah now with optimus there's there's a lot of uncertainty on the exact timing because It's not like a train arriving at the station for Optimus. We are designing the train and the station and in real time while also bullying the tracks. And so they're like, why didn't the train arrive exactly at 12.05? Like, we're literally designing the train and the tracks in the station in real time while you're like, how can we predict this thing with absolute precision? It's impossible. The normal internal plan calls for roughly 10,000 Optimus robots to be built this year. Will we succeed in building 10,000 exactly by the end of December this year? Probably not. But will we succeed in making several thousand? Yes, I think we will. Will those several thousand Optimus robots be doing useful things by the end of the year? Yes, I'm confident they will do useful things. The Optimus in use at the Tesla factories for production design one will inform what we change for production design two, which we expect to launch next year. And our goal is to ramp Optimus production faster than maybe anything's ever been ramped, meaning like aspirationally an order of magnitude ramp per year. Now, if we aspire to an order of magnitude ramp per year, perhaps we only end up with a half order of magnitude per year. But that's the kind of growth that we're talking about. It doesn't take very many years before we're making 100 million of these things a year. If you go up by, let's say, a factor, by 5x per year. Insane. Not 50%. 500%. So, you know, these are big growth numbers. Yeah. But we do need to, this is an entirely new supply chain. It's entirely new technology. There's nothing off the shelf to use. We tried desperately with Optimus to use any existing motors, you know, any actuators, sensors, nothing, nothing worked for a humanoid robot. at any price. We had to design everything from from physics first principles to work for humanoid robot. And with the most sophisticated hand that has ever been made before by far. And optimus will be able to like play the piano and be able to thread a needle. And this is the level of precision no one is been able to achieve. And so it's really something special. And my prediction long-term is that Optimus will be overwhelmingly the value of the company. Regarding energy, back to earth. with Elon. Can you come back here for a minute? Okay, back to earth. Energy storage is a big deal and will become, it's already super important, will become incredibly important in the future. And it is something that enables far greater energy output to the grid than is currently possible. Because the grid, the grids are, the vast majority of the grid has no energy storage capability. So they have to design the power plants for very high peaks and assuming that there's no energy storage. Once you have grid energy storage and home-based energy storage, the actual total energy output per year of the grid is dramatically greater than people think. Maybe it's at least double. This will drive the demand of stationary battery packs, especially the grid-scale ones, to insane, basically as much demand as we could possibly make. So we have our second factory, which is in Shanghai, that's starting operation, and we're building a third factory. So we're trying to ramp output of the stationary battery storage as quickly as possible. Now, there is a challenge here where we have to be careful that we're not rubbing from one pocket to take to another pocket because For a given gigawatt hours per year of the cell output, does it go into stationary applications or mobile applications? It can't go into both. So we have to make that trade-off. Yeah. But overall, the demand for total gigawatt hours of batteries, whether mobile or stationary, that will grow in a very, very big way over time. So in conclusion, 2025 really is a pivotal year for Tesla. And when people look back on 2025 and the launch of unsupervised full self-driving, true real-world AI that actually works, I think they may regard it as the biggest year in Tesla history. maybe even bigger than our first car, the Roadster or the Model S or the Model 3 or Model Y. In fact, I think it probably will be viewed 25 as maybe the most important year in Tesla's history. There is no company in the world that is as good at real-world AI as Tesla. I don't even know if he's in second place. Like, you say, like, Who's in second place for real-world AI? I would need a very big telescope to see them. That's how far behind they are.

All right. Great. Thank you very much, Elon. And Bebov has some opening remarks as well.