Tesla, Inc.

Good afternoon, everyone, and welcome to Tesla's third 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 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 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. The third quarter was very strong, and I'd like to give a big congratulations to the whole Tesla team for working hard to make it happen. Demand is growing rapidly for our vehicles. It's exceeding our production by a significant margin, and obviously we're going to be ramping, and we are ramping production meaningfully. The biggest driver for demand is full self-driving, and today there's really no competitor for FSD in any car that you can buy. and many others. We also began production of the Tesla semi-truck in Q3 and did the new Roadster demo, which was, I think, one of the most exciting events. I mean, arguably the coolest demo of any product ever. And that's a testament to amazing work by the Tesla and SpaceX teams. So we've also been laying the groundwork for a lot more manufacturing capacity. We're, I think, aiming for... I think we've got a good shot of achieving that goal. Energy demand is very strong. We're actually almost sold out of all megapacks for 2027 and we're ramping production as quickly as possible to meet demand. We also expect gross margins on that to increase meaningfully. So in a nutshell, after many years of sort of grind and things being fairly flat, I think we're now headed for a lot of fun and significant growth. Regarding Robotaxi, we're seeing Robotaxi fully autonomous miles driven scale exponentially, meaning scaling very rapidly. And it would be hard to overstate this point. It really is an extremely fast week-over-week growth in autonomous miles. and I don't think there's any company in the world that can match our scale with autonomous vehicles as we continue to ramp. The cybercab fleet in Austin, for example, has grown by a factor of 10 since launch about a month ago. And the cumulative mileage is really, when I look at the weekly chart, it's wow. I mean, it looks like a rocket going to orbit, basically. It's growing very fast. and I recommend, if you want to try it out, come into Austin and you'll see Sabacavs in use at scale in Austin, as I think a lot of people saw with the Austin City Limits concert recently. So this is really going to a very good place. Regarding Optimus, we've started what I'd call early production on our high-volume line in Fremont. I want to elaborate on this point because, and I've said this before, that the growth of Optimus, it's an S-curve, but the initial part of the S-curve has a shallow slope and is somewhat bumpy because it is such a radically new product. The way to think about it is there's like 10,000 things that have to go right for production of the robot, and it'll move as fast as the slowest, least lucky of the 10,000. But we do have the vast majority of a million unit per line production line landed in Fremont right now. But I would expect that it takes us probably at least a year Maybe a little longer to get to that annualized rate, to get to 20,000 units a week. This is just fundamentally because there's still parts of the design that are changing. A lot of people ask me about Optimus. That's why I think I've got to belabor this point. Because if people don't understand new technology that well or volume production of complex new hardware that well, it sort of seems like, well, can't you just make a whole bunch of these things immediately and send them out? And it's like, no, you've got to basically build up an entire gigantic global supply chain and have domestically a very, very big factory, and everything's got to work. and there's still some things we need to tweak about the design because you need to deliver a robot that is safe and reliable and has long duration so it can't wear out after a month. And there's still quite a lot of work to do with regard to the AI in the robot for it to be truly useful for open-ended tasks. But like I said, I would expect that The AI, the electromechanical design, and the reliability and Thank you for joining us. and humanoid robots in general will be the biggest product on Earth. So it's a very big deal, but I don't want to temper expectations that we still have a lot to get through and it's about a year or so that it'll take us to get through all that stuff. But as to the best of my knowledge, there is no one that is even close to Tesla with respect to a general purpose humanoid robot. Regarding the TeraFab, the Austin-based research fab is progressing quickly. We'll begin commissioning machinery in the first half of next year. And hopefully, if things go well, we'll make our first test chip just to see if we can make any chip at all around May or June. So that's pretty exciting. And then our aspiration is to and the rest of the world. An epic project. And this will be an incredibly important asset, if not a necessary asset, in order to scale, especially Optimus. As we can address bottlenecks in semiconductors, whether it's memory, packaging, logic, or whatever the case may be. With regard to a potential merger with SpaceX, I think I said everything that should be said yesterday, tap dancing through a minefield there. In conclusion, we're super excited about our autonomy and robotics roadmap. There's a lot of incredibly awesome stuff coming, and I'd like to once again thank the Tesla team for their strong execution and all of our supporters for joining us on this journey.