Tesla, Inc.

Good afternoon, everyone, and welcome to Tesla's second quarter 2026 Q&A webcast. My name is Travis Axelrod, head of investor relations, and I'm joined today by Elon Musk, Vaibhav 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, yeah, it's been a great quarter. We achieved record Q2 deliveries.

Model Y, I believe it's now, I think it's the best-selling car of any kind in the world and is setting records across the board. So its popularity is increasing tremendously. And we're seeing an increase In locations that have FSD approved, we're seeing a very high take rate of FSD. And in fact, I think for a lot of people, they're actually buying Tesla full self-driving with a car attached as opposed to a car with FSD. They're coming into our stores In the US and they want the full self driving and with whatever car it comes with, essentially. So clearly this is a significant demand driver. and as we get approval for FSD in different countries, I think we'll see a similar uptick in demand. So yeah, it's looking very good on that front. The energy business is also growing incredibly fast and I think will be crucial for the scale up of artificial intelligence data centers. We're investing a lot in growing The core business and really preparing for the future. So this is a massive CapEx year, but I'm confident that all the things that we're investing in will yield incredible returns. Really, the best CapEx returns that we've ever seen. and the Tesla team has performed incredibly well. The Saab Cab has started production and we also have started production in a ramping in, well, we will soon start production with Optimus. We have started production with the Tesla semi truck. We will soon start production with Mega Pack 3. We've started production with the lithium refinery. The cathode refinery, we're scaling up battery cell production, and we're also preparing to do a massive solar panel, like solar cells and panel production. Actually, this is going all the way from silicon refinement to producing the solar cell and then deployment of solar, because there's going to be tremendous need for electricity in the future due to electrification of transport and and AI, obviously. So, we're working on what we believe is the most ambitious build-out of advanced infrastructure manufacturing capacity ever in history. It's a big deal. So, with Robotaxi, our goals are very ambitious for Robotaxi, but we do need to be cautious about causing any accidents or causing any harm to anyone. Although there are I think 30 to 40,000 automotive deaths per year in the United States alone. Most of those do not generate any press. You never really read about almost any of those. But if we injure even one person, it will be worldwide headline news. And regulators will immediately clamp down on our activities. And we don't want to injure anyone. So we're going as fast as humanly possible in scaling Robotaxi. but while trying to ensure that we do not harm anyone at all and ideally do not even run over a pet. So that's really the constraint is we want to grow as fast as possible with Rotaxi without harm to anyone. And we're providing Live updates for Robotaxi Launch as we open up in the city. We immediately post that on X. So just follow the Tesla account on X. But we'll keep you informed as we scale to new cities. We've opened up in a number of cities in Florida and in Texas and obviously in the Bay Area. So we'll continue to scale, I think, very, very rapidly. It looks like more than 10% a week in terms of miles driven. So it's a very high compound growth rate. Let's see, Optimus, as you've heard me say before, I think Optimus will be the biggest product ever. But it is a very complex problem to solve. It's one of the hardest things to solve, to make an autonomous humanoid robot that can do tasks that if you simply ask it to do something or show it a video, it can do the task without any programming. Like no one's who has ever achieved this. And there are many challenges in the electromechanical design of the robot to achieve sufficient dexterity and also be very reliable and have a long wear and tear, meaning it needs to be out in the field and not break down. Otherwise, you've got sort of a 70 kilogram robot that just flopped over You've got to carry it out like a buddy. It's in our wheels. And we don't want Optimus to go haywire. It's a lot of work to scale, to get the design right, and to scale production. And I really want to emphasize here that the production scaling challenge is very substantial. This is going to be the hardest product to scale manufacturing that we've ever made at Tesla because everything on the robot is new. And the difficulty of scaling the production ramp is proportionate to the newness of the parts in the robot. At least with electric cars, the non-electric powertrain portions of the cars had an existing supply chain. So you could go to existing suppliers for wheels and side mirrors and Windshield, glass, and that kind of thing, body panels. But with Optimus, there is no supply chain. So we've had to build up a supply chain in its entirety or in-house the production. We actually give in-house a tremendous amount. The Optimus production line that we're building out in Fremont in place of what used to be the Model SX production. It looks incredible. It's quite stunning to see. So I just want to make sure to calibrate people correctly. Artus will follow the sort of normal S-curve of a manufacturing ramp, but the initial portion of the X-curve will be quite flat and long because of the newness of the parts in the robot. So you've probably seen lots of impressive demonstrations of robots on the internet, but those demonstrations you're seeing are pre-programmed or remote-controlled. So there is no humanoid robot that is actually able to do generalized tasks. Optimus will be the first one that is capable of doing that, where it's not just a demo. It's genuinely useful in day-to-day life. So an optimist is designed to have full human dexterity. So a hand that has the same level of dexterity, if not higher, than a human hand. And the human hand is an incredible, incredible thing. The more you study the human hand, the more amazing you realize how amazing hands are. It's more than just opposable thumbs. I mean, the nuances of how human hands work The closer you look, the more amazing you are. And an optimist will have that capability. You'll have human and then superhuman dexterity. So it's really going to be quite something. Let's see, TerraFab, you know, the TerraFab, we expect to announce the location soon and provide more details about our plans in that regard, which we'll leave that to the product, sort of the launch announcement rather than try to squeeze it into an earnings call, because I think this is a This is a very big announcement and it deserves to have its own sort of stay in the spotlight and not be sort of squeezed into an earnings call. But I do think TerraFive is going to be an amazing initiative and a necessary one, and one without which we will be constrained in our ability to scale optimist production because we simply won't have enough AI chips. So it's crucial to solve that. And we'll have to solve memory, logic, and packaging in order to scale Artemis. So if anyone likes it, we'll leave that to its own announcement. We've placed equipment orders for our development fab in Austin. And that development fab, I think, is pretty cool because it's intended to have lithography mask production and then logic, memory, and packaging and chip testing all under one roof. So you can have a very fast iterative cycle and try out New chip designs very quickly and see if they work. I don't think such a building exists anywhere on Earth. So this is really going to be super helpful as we try some exciting, adventurous, high-risk, high-payoff bets on AI chips. It's focused, like I said, on primarily optimists, like how do we make optimists as useful as possible. Then we have Digital Optimist, which is basically driving a computer screen. I guess you could call it computer use or something like that. But driving a computer screen is the same way you drive a car. So for the car, it's sort of pixels in or photons in and controls out. The same thing is true for Optimist and Digital Optimist. It's photons in and controls out. So we feel confident we can adapt the the same Tesla AI technology that we developed for self-driving cars to have a self-driving computer screen, a self-driving computer essentially. So the self-driving computer where the Tesla, the very low cost Tesla AI for The Digital Optimist will be important obviously for Physical Optimist because Physical Optimist needs to be able to operate computers. It can't come up to a touchscreen and not know what to do. It's got to have a generalized touchscreen and computer use capability. So that's looking promising. This is in partnership with SpaceX, SpaceX's Gronk. So the big model that is kind of like the manager of Digital Optimus and kind of tells Digital Optimus what to do, provides it with a series of tasks, and then Digital Optimus goes and does those tasks. We're also building out a megapod design that has Tesla AI-4 computers with X86. It's a pairing of an X86 computer with the Tesla AI-4 computer in a box. It's kind of just Digital Optimus in a box. and in a mega pod, kind of like the mega pack packaging. And so we put just a large number of of AI4 plus x86 combos in a giant box, essentially. And these boxes can be placed anywhere in the country or outside the country. And this allows us to scale AI compute using disaggregated electricity production. Because there's lots of places all around the world, including in our superchargers, I think we've got something like 7 gigawatts of power at our superchargers and growing. And we can place mega pods at many of these superchargers and have distributed power for AI. So I think that could be quite a big deal. So in conclusion, we're super excited about our autonomy and robotics roadmap. There's so much awesome stuff coming. It's, like I said, hard to squeeze into an earning school. But we'll have a lot of product announcements. And this is going to be a great year for Tesla, I think. One of our best years ever. And then I think next year will be even better. In conclusion, I want to thank the Tesla team for their excellent execution and all of our supporters for joining us in this journey. Thank you.