Tesla 2024 Annual Shareholder Assembly transcript: June 13, 2024

Talking: Tesla Normal Counsel and Company Secretary Brandon Erhart, Board Chair Robyn Denholm, CEO Elon Musk, and different executives and analysts

2024 Annual Shareholder Assembly held on Thursday, June 13

 

Brandon Erhart: Welcome to Texas, the house of Tesla. My identify is Brandon Erhart, I’m the Normal Counsel and company secretary and this assembly goes to be in two components. First, we’re going to cowl the 12 gadgets that stockholders have been requested to vote on, in addition to another issues which were correctly offered. Second, our founder and CEO, Elon Musk will present a presentation.

Throughout the course of the next periods, we could focus on our enterprise outlook and make different forward-looking statements. Such statements are predictions primarily based on present expectations, precise occasions or outcomes might materially differ resulting from a variety of dangers and uncertainties, together with these disclosed in our most up-to-date 10-Ok or 10-Q as filed with the SEC. Such forward-looking statements signify our views as of at the moment shouldn’t be relied on hereafter, and we disclaim any obligation to replace them after at the moment.

Right now, I’d prefer to thank members of the Tesla workforce and the board which are right here in attendance. A consultant from PriceWaterhouseCoopers, Tesla’s unbiased auditor, can also be current. However earlier than we start, I’d prefer to introduce you to our board chair, Robyn Denholm, who want to say a number of phrases.

 

Robyn Denholm: Thanks, Brandon, and hi there, everybody. As chair of Tesla’s board, I’m honored to welcome you all to our residence, Texas. For our annual 2024 annual shareholder assembly. And after I say I’m honored to welcome you, our shareholders, I really am. No different firm on this planet has such a various, engaged, and supportive set of shareholders as Tesla. No different shareholder base understands its firm such as you do, neither is as dedicated to Tesla’s mission to speed up the world’s transition to sustainable power like you might be.

It’s a shareholder base whose pursuits the board are proud to signify. Additionally it is a shareholder base that understands that with the intention to speed up the world’s transition to sustainable power, and a sustainable power financial system, Tesla must develop probably the most revolutionary applied sciences not solely in autos, however in power and synthetic intelligence as nicely.

Our achievements this previous 12 months, our steps in direction of fulfilling our mission.

Some highlights embrace the Mannequin Y turning into the very best promoting automobile on this planet in 2023, starting deliveries of the a lot anticipated Cybertruck proving that the muscle and utility of a pickup truck may be electrical and funky. And our power storage deployments reaching an all-time excessive in 2023, with the deployment development persevering with in 2024.

By utilizing our merchandise, Tesla clients averted releasing over 20 million metric tons of greenhouse fuel emissions in 2023. That’s the equal of 51 billion miles pushed by ICE autos, a rise of about 18 billion averted ICE miles since 2022.

However to proceed the exponential development in greenhouse fuel emission avoidance, we not solely need to get our merchandise into as many purchasers palms as attainable, however we additionally want to extend the utilization of our merchandise. And to assist additional with that aim, we launched FSD Supervised, demonstrating that our strategy to autonomy is scalable. And that accomplishments in synthetic intelligence, together with leveraging our current manufacturing strains to get our subsequent technology merchandise to market sooner, are important to attaining our mission.

We’ve got made and plan to make additional investments in {hardware} and software program ecosystem to additional advance our path to autonomy and set a course to realization of Robotaxis.

However sustainability is not only about avoiding emissions. It must keep in mind the entire lifecycle from the manufacturing of the merchandise to the product’s end-of-life. That’s the reason we sourced responsibly. We design our manufacturing processes to make use of much less water per automobile than the trade common, and for the third 12 months in a row, we energy our Supercharger community with 100% renewable power.

And we’re additionally working to construct a battery materials recycling ecosystem, each internally and with others, to make sure that we’re transferring in direction of a really round financial system for power storage. In 2023 alone, we supported the restoration of sufficient battery supplies to construct 43,000 new Rear-Wheel-Drive Mannequin Ys. That result’s the epitome of a sustainable financial system.

Whereas sustainability is our mission, we even have the aim of security. Our automobiles are engineered to be among the most secure on this planet and we take real-world information from our fleet, and our means to push over-the-air updates to optimize security for all our automobile fashions.

Our consideration to autonomy additionally performs a job in our aim of security. Based mostly on 2023 information, Tesla autos with driver-assist applied sciences engaged had just one automobile accident per 5.64 million miles pushed, in comparison with the U.S. automobile fleet of 1 accident per 670,000 miles pushed. So not solely are you defending the atmosphere by driving a Tesla, you’re additionally defending your self and people who trip with you.

With one other 12 months of progress in furthering our mission underneath our belt, I wish to take this second to thank our phenomenal Tesla workers whose creativity, arduous work, and dedication are the supply of our success. And as most are additionally shareholders alongside each considered one of you, I hope every worker takes pleasure in within the position that you’ve performed in Tesla’s accomplishments. I’m pleased with you and the board and I recognize you tremendously.

Lastly, I wish to remind our shareholders that your board is listening and we’re right here to signify your pursuits. You’re the house owners of the corporate and your voices, your views, and your enter are important to us as a board and to the path of the corporate. My fellow administrators and I function your fiduciaries and oversee Tesla’s mission, function, and technique with these obligations in thoughts.

We repeatedly set the best requirements for moral conduct, company citizenship, and company governance. You don’t see the day-to-day work of the administrators, however I can guarantee you: this can be a extremely engaged board. And I want to thank my fellow administrators for his or her dedication, whether or not it’s contained in the boardroom, assembly with our shareholders, or working carefully with our workforce members all through the corporate.

Tesla is exclusive in how lively and enormous our retail shareholder base is, and we hope you right here on this room and our shareholders becoming a member of us just about at the moment proceed to reap the benefits of our shareholder platform to boost your engagement with Tesla. I wish to give a particular shout out to our small however mighty IR workforce and authorized workforce, and everybody concerned in operating this 12 months’s proxy marketing campaign—each inside and outdoors of Tesla.

There may be nonetheless a lot to do, however it has galvanized us across the sturdy perception that the correct issues are at all times value combating for. Thanks. And now I’ll hand it again. Thanks. Now I’m gonna hand it again to Brandon, thanks.

 

Brandon Erhart: Thanks, Robin. So I’ll now name the assembly to order. The time is now 3:40 p.m. Central, and I declare that the polls are actually open. We’ve got already obtained over the previous few weeks voting proxies from our stockholders. Nonetheless, in the event you want to vote your shares at the moment, it’s possible you’ll achieve this by way of the digital assembly portal. Or if you wish to vote in individual, ballots and poll bins can be found on the entrance.

Tesla’s board of administrators has appointed Tony Cardidio, a consultant of the Cardidio Group, to function the inspector of election. As well as, Broadridge Monetary Providers has licensed that beginning on April 29, 2024, the proxy supplies, or discover of web availability for proxy supplies, had been mailed or offered to all Tesla stockholders of document on April 15, 2024. We’ve got a majority of excellent shares represented on the assembly, so I declare that there’s a quorum current after which we could proceed with the assembly.

The gadgets on the agenda are as follows, there are 5 Tesla proposals: The election of two Class 2 administrators, James Murdoch and Kimball Musk, to serve for a time period of three years or till their respective successors are duly elected and certified; to approve government compensation on a non-advisory foundation; to approve the re-domestication of Tesla from Delaware to Texas through conversion; to ratify the 100-percent performance-based inventory choice award to Elon Musk that was beforehand permitted by stockholders in 2018; to ratify the appointment of PriceWaterhouseCoopers LLP as Tesla’s unbiased registered public accounting agency for the fiscal 12 months 2024.

Tesla’s board has really helpful that our stockholders vote for every of the 2 director nominees and for every of the 4 different Tesla proposals. We’ve got additionally obtained seven stockholder proposals which are described within the proxy assertion. I want to remind our stockholders that Tesla’s board has ready a press release in opposition to those proposals which additionally seem in our proxy assertion. So let’s flip to these seven stockholder proposals.

The primary one is an advisory vote concerning discount of director phrases to 1 12 months. Our board has really helpful that our stockholders vote in opposition to this as defined within the proxy. This stockholder proposal is proposed by Mr. James McRitchie, who has ready a pre-recorded message.

 

James McRitchie: Thanks. We offered the same proposal in 2021. 55 p.c supported it, regardless that the board put up a competing proposal, accountability each different 12 months as an alternative of yearly, neither obtained the required 67 p.c of shares owned. 90 p.c of the S&P 500 have a declassified board. Most institutional shareholders will once more assist our proposal. Be part of them.

The latest Delaware courtroom case recognized three authorized deficiencies at Tesla: administrators will not be unbiased; the info of the pay plan offered to buyers had been deceptive; and the board failed to barter correctly. A significant a part of a remedy is declassifying the board so shareholders can maintain administrators accountable or submit their very own nominations.

Matt Moscardi of Free Float calls proposal quantity six an important vote at the moment, since it might allow buyers to vary the board, bringing new expertise and professionalism. John Chevedden and easy majority vote is the opposite essential vote. One other necessary endorser is Nell Minow, co-founder of corporations together with proxy advisor ISS.

The Musk premium is already eroding. Tesla is Musk’s liquid piggy financial institution, because it’s publicly traded. His different corporations will not be. Both he sticks round lengthy sufficient to make use of our shareholder capital to fund his different ventures, or he shifts his consideration sooner if we reject his pay package deal and switch off the cash faucet.

Chew the bullet. Put together for a future that doesn’t depend upon a superhero dictatorship. We have to transition from a board dominated by family and friends to considered one of knowledgeable unbiased administrators in engineering, software program, and different related fields. Musk is a genius. I’m saddened to see him focus his consideration elsewhere, however it’s occurring. Don’t let him siphon off extra from Tesla. We have to transition to a extra democratic Tesla that may appeal to clients, workers, and shareholders searching for a greater world forward.

Once more vote for quantity six and 7. Declassify the board for accountability, decrease the voting threshold for extra flexibility. Vote now earlier than the polls are closed. Your vote could make a big distinction in our future. Thanks.

 

Brandon Erhart: Thanks, Mr. McRitchie. As a reminder, the board’s response was contained in our proxy assertion.

The second stockholder proposal is an advisory vote concerning easy majority of provisions in our governing paperwork our board has really helpful in opposition to and are set forth for the explanations within the proxy. This stockholder proposals proposed by Mr. John Chevedden, who’s on the road to current this current this proposal. Mr. Chevedden, I want to invite you to talk. You’ll have three minutes.

 

John Chevedden: Hey, that is John Chevedden. Proposal seven easy majority vote. Shareholders requested the board of administrators take the required steps so that every voting requirement within the constitution and bylaws that requires a higher than easy majority vote, get replaced by necessities for a majority of the votes forged for and in opposition to that proposals for a easy majority. This contains making the required adjustments in plain English.

This proposal seven is very same idea on the Tesla Board of Administrators supported on the 2022 Tesla Annual Assembly. The 2022 Tesla Board of Administrators proposals then gained 98 p.c assist from the Tesla shareholders who voted. And the Board of Administrators model of this proposal would have been adopted earlier, if the board of administrators had solely made a slight effort to encourage extra Tesla shareholders to vote for his or her proposal.

This straightforward majority vote normal proposal will assist enhance Tesla shareholder rights. Tesla now scores a dismal 10 in shareholder rights, with 10 being the worst attainable rating. The Tesla Board of Administrators supported this proposal idea in 2022, and will achieve this at the moment.

Shareholder rights and a easy majority vote normal are all of the extra necessary when Tesla has a CEO, Elon Musk, who’s threatening to present much less consideration to Tesla and threatening to withhold superior know-how from Tesla until he will get a $56 billion paycheck. By no means earlier than have shareholders been underneath such duress, when requested to show an outrageous $56 billion CEO paycheck.

Plus, there’s no promise with the $56 billion paycheck that Mr. Musk will commit any minimal share of his time to Tesla, or pursue any minimal quantity of superior know-how at Tesla. Ross Gerber of the funding agency Gerber Kawasaki mentioned, “I consider the Tesla board of administrators is probably the most conflicted, least unbiased, and most incapable board of administrators within the historical past of enterprise.”

Please vote sure, easy majority vote, proposal seven.

 

Brandon Erhart: Thanks, Mr. Chevedden. As a reminder, the board’s response is ready forth within the proxy.

Our third stockholder proposal is an advisory vote concerning annual reporting on anti-harassment and discrimination efforts. Our board has really helpful in opposition to for the explanations set forth within the proxy. This stockholder proposals proposed by the New York State Widespread Retirement Fund because the lead filer, which is requested that Dr. Kristen Corridor, as represented for Nia Affect Capital as co-filer for this proposal, current this proposal. Dr. Corridor, I want to invite you to talk. You have got three minutes.

 

Kristen Corridor: Thanks. Hey, I’m Dr. Kristen Corridor of Nia Affect Capital. I’m right here on behalf of lead filer, New York State Comptroller Thomas DePaoli, trustee of New York State Retirement Fund, proprietor of Tesla shares valued at over 650 million as of March of this 12 months. And I’m right here as a co-filer of proposal eight.

The fund is a big long run proprietor of Tesla and has an express concentrate on investing in local weather options. LongView massive cap funds by way of its trustee Amalgamated Financial institution, AP Seven, and our Juna be part of us in submitting this decision.

Our agency identify Nia means intention and function. We make investments solely in these corporations we see constructing towards a greater world, a sustainable and inclusive future. Because the founding father of Nia, I had been proud in our early possession of Tesla. I noticed the potential and the necessity for innovation within the automotive and the clear power market area. Nonetheless, when wanting underneath the frunk we discover failures in office administration—one of the necessary elements of any enterprise.

Workers should be employed, skilled, motivated, and engaged to do high-quality work, and we’d like these workers to have the ability to contribute to their prime means. To take action, they have to really feel each bodily and emotionally secure at work. Buyers are requesting the report outlined in proposal eight as a result of office abuse, harassment, and discrimination don’t have any place at Tesla. That can lead to substantial prices, together with worker turnover, elevated absenteeism, and decreased productiveness, in addition to authorized prices, all of which may influence shareholders’ investments within the firm.

They could additionally result in difficulties in recruiting high-quality workers, one thing that Tesla wants to stay modern and on the forefront of a quickly-moving technological panorama.

We’ve got expressed considerations about Tesla’s office for years, and 12 months after 12 months, extra harassment and discrimination allegations have emerged with few seen enhancements in Tesla’s individuals, administration insurance policies, or practices to assuage our considerations. Lawsuits and sophistication actions earlier than Tesla now contain 1000’s of workers, with allegations together with repeated use of racial epithets by managers and workers, segregation, and discrimination in opposition to non-white workers in job assignments, pay and promotion, and retaliation when workers report their experiences.

These considerations are why I now formally transfer proposal eight, requesting that Tesla’s board fee an unbiased report on the effectiveness of the corporate’s efforts to stop harassment and discrimination inside this revolutionary and modern workspace. Thanks.

 

Brandon Erhart: Thanks, Dr. Corridor. The board’s responses set forth within the proxy supplies.

Let’s flip to the fourth stockholder proposal which is an advisory vote concerning the adoption of freedom of affiliation and collective bargaining coverage. Our board has really helpful in opposition to for the explanations set forth within the proxy. This stockholder proposal is proposed by SOC funding group, whose consultant, Tejal Patel, has ready a pre-recorded message.

 

Tejal Patel: Hey, I’m Tejal Patel, the Govt Director of the SOC Funding Group, and I hereby transfer proposal 9, a shareholder proposal requesting that Tesla Board of Administrators undertake and disclose a non-interference and collective bargaining coverage that upholds Worldwide Labor Rights requirements in its operations.

This decision was submitted with different co-filers and we’re involved that Tesla’s current coverage fails to obviously clarify how conflicts between worldwide and native labor legislation can be resolved. And due to clear indications that Tesla will not be adhering to its present coverage regardless of the operational authorized human capital administration and reputational dangers concerned.

We acknowledge that Tesla revised its world human rights coverage in April 2023 to explicitly seek advice from the rights of staff to free affiliation and collective bargaining, however these revisions had been fatally compromised. The assertion committing to respect these rights contains the qualifier in conformance with native legislation, reasonably than referencing the customarily greater worldwide human rights requirements, suggesting that Tesla respects these rights solely as explicitly required by native legal guidelines.

Quite a few indicators counsel that Tesla will not be respecting its staff’ elementary rights.

In Sweden, Tesla has confronted months-long strikes and boycotts over what has been characterised as a refusal to discount. Furthermore, as a part of its reporting on the state of affairs, Reuters wrote that Tesla has a coverage of not signing collective agreements, which, if true, would straight contravene the corporate’s present coverage. In Germany, Tesla faces allegations of refusal to discount and poor working circumstances.

In america, Tesla has had hostile selections by the total Nationwide Labor Relations Board and the U.S. Fifth Circuit Courtroom of Appeals over labor rights violations. Simply final month, the NLRB issued a grievance alleging that restrictions in Tesla’s office know-how coverage served to unlawfully discourage workers from becoming a member of unions or appearing concertedly.

Additionally it is related for shareholders to think about the broader human capital administration dangers Tesla faces, together with experiences of upper well being and security violations and damage charges than friends, and quite a few lawsuits alleging of hostile work environments. Freedom of affiliation and collective bargaining are thought-about enabling rights, which means that they empower staff to successfully advocate for added labor rights, together with the correct to a secure and wholesome office, free from discrimination.

The adoption of a complete labor rights coverage that clearly articulates a dedication to non-interference, good religion collective bargaining, and adherence to greater worldwide requirements would assist Tesla higher mitigate these human capital administration dangers, in addition to operational and reputational dangers like we’re seeing and Sweden. Subsequently, we urge you to vote for merchandise 9. Thanks.

 

Brandon Erhart: Thanks, Ms. Patel. The board’s respons is ready forth within the proxy.

The fifth stockholder proposal is an advisory vote concerning reporting on results and dangers related to electromagnetic radiation and wi-fi applied sciences. Our board has really helpful in opposition to for the explanations set forth within the proxy. This stockholder proposal is proposed by Landry Purcell, who’s consultant Dr. Devra Davis has ready a pre-recorded message

 

Devra Davis: I’m Devra Davis, founding father of Environmental Well being Belief. I’m talking with you at the moment on behalf of shareholder Landry Purcell concerning her proposals searching for an annual report on the dangers for magnetic fields and wi-fi radiation of their merchandise. I’m additionally talking on behalf of thousands and thousands of younger youngsters, infants, and toddlers, and pregnant ladies, who’re extra susceptible to wi-fi radiation, in line with the American Academy of Pediatrics.

I’m the founding director of the board on environmental research and toxicology from the Nationwide Academy of Sciences, and I’ve revealed greater than 220 scientific articles on environmental well being, and have concluded, together with tons of of different specialists, that present exposures to non-ionizing electromagnetic fields known as EMF represent a severe and unrecognized public well being threat.

Tesla autos function with the 1200-pound battery that emits magnetic fields, and in addition makes use of wi-fi gear akin to Wi-Fi, and radar, emitting wi-fi radiation. Tesla ought to present clear data on measured exposures and efforts to scale back them. The World Well being Group has concluded that each low ranges of EMF and microwave mobile radiation are “attainable carcinogens,” the identical class as some pesticides and gasoline.

The businesses that present secondary insurance coverage, like Lloyd’s of London and Swiss Re, have lengthy thought-about electromagnetic fields to be uninsurable, corresponding to asbestos resulting from potential well being and environmental damages. Tesla’s shareholders have a proper to understand how the corporate insures itself in opposition to such dangers.

The truth that present ranges could also be authorized doesn’t imply they’re secure. The truth is, U.S. laws had been set greater than a quarter-century in the past. It has been three years for the reason that U.S. Circuit Courtroom of Appeals for the District of Columbia decided that the FCC had been “arbitrary and capricious” in its failure to think about all of the science and refusal to replace wi-fi limits. Tesla has failed to tell shoppers about measured ranges of magnetic fields and wi-fi radiation throughout the car or their different merchandise.

Infants and toddlers by legislation are strapped into seats to guard them throughout crashes, however they don’t have any safety from EMF that may go extra deeply into their thinner skulls. To mitigate dangers for Tesla, the corporate might protect its autos and guarantee wi-fi attendance might be simply turned off. {Hardware} and software program adjustments can decrease exposures typically. Tesla has developed extraordinarily rigorous compliance and hazard screenings, past regulatory necessities for sure poisonous chemical substances. Buyers can encourage the corporate to take the same management position concerning lowering EMF.

It’s time for the corporate to unambiguously compete on security concerning wi-fi radiation and non-ionizing radiation emitted by its merchandise. Thanks.

 

Brandon Erhart: Thanks, Dr. Davis. The board’s response is ready forth within the proxy.

Let’s transfer on to the sixth stockholder proposal, which is an advisory vote concerning adopting targets and reporting on metrics to evaluate the feasibility of integrating sustainability metrics and to senior government compensation plans. Our board has really helpful in opposition to for the explanations set forth within the proxy.

This stockholder proposal is proposed by Tulipshare Securities Restricted, whose consultant, Constance Ricketts, has ready a pre-recorded message

 

Constance Ricketts: Good afternoon. Fellow shareholders, thanks to your time. I’m Constance Ricketts and at the moment I’m talking on behalf of Tulipshare, in assist of proposal 11, urging Tesla to combine sustainability metrics, together with variety amongst senior executives, into government compensation plans.

This proposal requires strong quantitative targets and clear reporting to each resolve government pay plan controversies and guarantee our firm’s long-term stability and success. Range and independence in management are important for innovation and enhanced decision-making, whereas sustainability metrics and government compensation replicate alignment with regulatory pressures, investor expectations, and accountable enterprise practices.

Regardless of 75 p.c of S&P 500 corporations incorporating sustainability metrics into government pay plans, Tesla fails to take action. That is particularly regarding given our mission to speed up the world’s transition to renewable power, the latest ruling that voided our CEO’s $56 billion greenback pay package deal highlighted the necessity for honest and negotiated compensation plans that serve stockholders’ finest pursuits.

Tesla’s proxy assertion doesn’t supply substantive proof of how the voided 2018 award harms stockholder democracy or how its ratification will remedy prior deficiencies and result in a unique consequence. Likewise, the opposition to this proposal fails to point out any proof of an current performance-based part built-in into the manager pay construction that respects established human rights due diligence processes and rules.

As an alternative, it cites its human rights coverage that’s wholly unrelated to government compensation and doubles down on the argument that the currently-contested government pay construction is the one technique of motivation to realize our firm’s mission. This dedication to the established order basically dismisses the continued controversies that Tesla should face and overcome, together with softening gross sales, advancing competitors, cut up focus in management, a 30-percent drop in inventory value, decreased market cap, mass layoffs, human rights violations, and ongoing authorized challenges.

Tesla’s executives completely ought to be duly compensated for modern and profitable enterprise. Nonetheless, stockholder democracy permits us to oppose calls for like 25 p.c management of the corporate and the most important pay package deal in company American historical past through additional share issuance. We even have the correct to vote for management’s compensation to be commensurate with monetary and sustainability efficiency. This doesn’t imply we don’t respect our management’s time, power, and contributions. Fairly the opposite, as it’s our obligation as stockholders to make sure long-term viability and success for our firm.

 

Brandon Erhart: Thanks, Ms. Ricketts. The board’s response is ready forth within the proxy.

Let’s transfer on to the seventh stockholder proposal, which is an advisory vote concerning committing to a moratorium on sourcing minerals from deep sea mining. Our board has really helpful in opposition to for the explanations set forth within the proxy. This proposal is proposed by As You Sow, whose consultant, Elizabeth Levy has additionally recorded a pre-recorded message.

 

Elizabeth Levy: Good afternoon Chairman, members of the board. My identify is Elizabeth Levy representing As You Sow, talking on proposal quantity 12.

We all know extra in regards to the floor of Mars than we do in regards to the backside of the ocean. Even so, a brand new trade is transferring ahead to take advantage of the deep sea. We consider this trade poses dangers to Tesla now and into the longer term.

Deep sea mining is the method of dredging the ocean flooring to extract battery-related minerals. It’ll indiscriminately destroy habitats and obliterate life in its path. Seabed mining might launch carbon shops and poisonous sediment plumes, poisoning marine meals chains, and disrupting sea life breeding and migration. The deep sea is advanced and plentiful with life. Its ecosystems are slow-growing and fragile, with little to no means to get better from exterior disturbance. Plans are transferring ahead to launch the method for industrial scale deep sea mining with or with out regulation.

Tesla’s membership within the OECD and IRMA mining protocols doesn’t resolve this subject, as neither at the moment applies to mining within the deep sea. Over 800 marine science and coverage specialists, 25 international locations, 72 indigenous teams, and 48 corporations are calling for a ban, moratorium, or precautionary pause on deep sea mining. This contains Tesla’s rivals BMW, Renault, Rivian, Volkswagen, and Volvo. Even Normal Motors has said it doesn’t plan to make use of deep sea mining, minerals.

Our firm’s public stance on deep sea mining issues. Tesla is the face of the EV transition, and its ambiguous place on deep sea mining might drive funding on this controversial trade. Conversely, a transparent stance proscribing Tesla’s use of deep sea minerals can drive innovation and battery mineral tech, recycling, and circularity. With these applied sciences, even probably the most formidable future EV eventualities might be met with out harming the deep sea.

Tesla’s failure to take a stand on deep sea mining, mixed with the truth that a former Tesla board director is now serving as a board member and Particular Advisor to the CEO of The Metals Firm, the very firm main the cost on deep sea mining, raises considerations. Such a relationship seems to indicate that Tesla helps The Metals Firm and its deep sea mining actions.

Committing to a moratorium will make clear expectations and scale back reputational hurt to the corporate, assuring clients and buyers that Tesla will certainly wait till science reveals deep sea mining is not going to trigger vital or irreparable harm. Thanks.

 

Brandon Erhart: Thanks Miss Levy. The board’s respons is ready forth within the proxy. Please observe that now’s the ultimate alternative to submit any votes to ensure that them to be counted.

I declare that the polls are actually closed.

Based mostly on the proxies that we’ve obtained, and the votes submitted at this assembly, I’d prefer to announce the outcomes on a preliminary foundation.

With respect to the seven stockholder proposals, our stockholders have permitted the suggestions of the Tesla board on all of them apart from proposal six concerning director phrases, and proposal seven concerning easy majority voting. Now, transferring on to the 5 Tesla proposals.

First, our stockholders have permitted the election of our two Class 2 administrators, James Murdoch and Kimball Musk, to serve for a time period of three years and till their respective successors are duly elected and certified.

Second, our stockholders have permitted government compensation on a non-binding advisory foundation.

Third, our stockholders have permitted the ratification of appointment of PricewaterhouseCoopers LLP as Tesla’s unbiased registered public accounting agency for the 2024 fiscal 12 months.

Fourth, our stockholders have permitted the re-domestication of Tesla from Delaware to Texas.

Fifth, and eventually, our stockholders have permitted the ratification of the 100% performance-based inventory choice award to Elon Musk that was permitted by stockholders in 2018.

The assembly is now closed and, with that, Tesla shareholders, let’s welcome Elon Musk.

 

(Recorded video montage ft. Musk and information personalities):

 

Elon Musk: The aim is to present individuals hope that there’s a path to a totally sustainable world financial system that we’re on that path that we’re accelerating that path and that, as long as we don’t get complacent about it, it can occur.

 

Per Lekander: This was actually the start of the top of the Tesla bubble. I really assume the corporate might go bust.

 

Unknown Information Anchor: Tesla’s Mannequin Y is the world’s best-selling automobile, beating out Toyota RAV-4 and Corolla its fashions.

 

Elon Musk: Concerning FSD model 12, efficacy model is profound. The speed of enchancment is fast. It is likely to be the most important asset worth appreciation historical past when you are able to do unsupervised or Full Self-Driving.

 

Unknown Analyst: Feels like a narrative inventory. Autonomous taxi? Can you actually steadiness your checkbook with these type of pie within the sky predictions like that?

 

Elon Musk: In case you ask the unsuitable query, the correct reply is unattainable.

My prediction is {that a} majority of Tesla’s long run worth can be Optimus. And that prediction I’m very assured of.

It’s very uncommon a product comes alongside that’s seemingly unattainable that specialists mentioned would by no means be made. And that is a type of instances. Lastly, the longer term will appear to be the longer term.

Folks say like “why did you make a bulletproof?” I’m like, “Why not?”

Vitality storage deployments, the Megapack particularly, reached an all-time excessive in Q1 resulting in document profitability for the power enterprise.

That is the machine that builds the machine and the manufacturing facility is the product and this constructing is probably the most superior automobile manufacturing facility that Earth has ever seen.

In case you worth Tesla as an auto firm, it’s the unsuitable framework. If any person doesn’t consider Tesla’s gonna remedy autonomy, I believe they shouldn’t be an investor within the firm. However we’ll, and we’re.

 

(Recorded video montage ends and Musk enters the stage):

 

Elon Musk: Hey guys! Welcome to the Tesla shareholder assembly. I simply wish to begin off by saying, scorching rattling, I really like you guys. Yeah. We’ve got probably the most superior shareholder base. I imply, any public firm, it’s unbelievable. Wow. So and, we’ve received an excellent type of shareholder assembly right here to recap the achievements of the corporate and let you know about the place we’re going, and I believe it’s unbelievable.

We’re not simply opening a brand new chapter for Tesla, we’re beginning a brand new e-book.

So, these of you who’ve been following Tesla carefully perceive, such as you get it, . So like, the necessary factor is you get it.

Yeah, the place issues are going I believe is simply going to be completely mind-blowing. We’re clearly making nice progress in fixing the sustainable power drawback, , with electrical autos, with stationary storage, with photo voltaic. And I believe when it comes to the, the worth of the corporate, autonomy is simply such a mind-blowing factor that, like I mentioned, you guys perceive, however I believe many of the world doesn’t but perceive.

In speaking to loads of the type of huge institutional buyers, they’re typically in like New York, and so they don’t drive automobiles.

So I’d be like, “Have you ever pushed our automobile? Have you ever tried Self-Driving? You recognize, the model 12.3?”

And so they’re like, “Oh, no.”

“Okay, nicely it’s best to attempt it. That may be a very good factor to do.”

And in the event you simply plot the factors on the curve of how nicely autonomy is progressing, and simply consider the curve, it’s headed in direction of unsupervised Full Self-Driving in a short time, at an exponential tempo.

It’s actually so simple as that. And actually, I invite you to simply do it personally. Simply say “okay, with every launch, what number of miles do you drive earlier than it’s a must to intervene?”

It’s like actually that easy. And with every launch, you’ll see that there’s an enormous enchancment, huge enchancment, and it seems like an exponential. And it’s very clear that that can really go to the purpose the place it’s really far safer than an individual driving the automobile.

I’ve some perception into, , the subsequent releases as a result of we’ve received, principally, for each launch that’s on the street, we type of see what the subsequent technology launch is, and a little bit bit in regards to the launch after that. So we’ve got some perception into the place it’s going and it’s actually superb. No query by any means that can far exceed human security. Yeah, no query.

And I believe I’ve talked about this. Like, typically it’s useful to type of reiterate and join among the dots, as a result of typically individuals marvel, “nicely, how do you go from this huge fleet, to really monetizing the fleet in an autonomous state of affairs?” And it’s really a mix of like, Airbnb, and Uber to some extent.

So like, there’ll be some automobiles that Tesla owns itself, it’s type of like an Uber trend, however then for the fleet that’s owned by our clients, it is going to be like an AirBnb factor. You may add or subtract your automobile to the fleet everytime you need.

So you may say like, “I’m going away for per week.”

Only one faucet in your Tesla app, your automobile will get added to the fleet, and it simply makes cash for you whilst you’re gone.

So you may say you may add it to the fleet for a number of hours, for a number of days, for a number of weeks. Everytime you wish to again, you may say “come again” and the automobile will come proper again. And I’m extremely assured that it’s going to far exceed, the worth of just like the income made by the proprietor of the automobile, will far exceed the precise month-to-month fee.

After which Tesla will clearly take a rev share on that, however many of the cash will go to the proprietor of the automobile. And it’s… that is really going to work. That is what’s going to occur. So, I imply, mark my phrases. That is that is merely a matter of time.

Now, admittedly I’m a little bit optimistic typically. You recognize, I don’t have a whole lack of self consciousness. But when I wasn’t optimistic, this wouldn’t exist this manufacturing facility wouldn’t exist.

So, that’s what my brother, who’s superior, simply received re-elected… no, sorry.

So, a little bit anecdote. When had been youngsters at school, my brother would inform me the unsuitable time for the bus, in order that I wouldn’t miss the bus.

After which it’d be upset with him like, “Why’d you inform me the bus was gonna come sooner than it was?” And he’s like, “Nicely, as a result of in any other case you’d be late for the bus.”

That is an precise factor that might occur, so I suppose I’ve been type of pathologically optimistic from beginning. However like, that’s the rationale why that is all of the stuff is occurring anyway, it’s like, I gotta be considerably pathologically optimistic, however I do ship ultimately. That’s the necessary factor.

So, yeah. And it’s actually simply gonna be one thing else. And I’ve talked about this earlier than, however for Ark Make investments, I’d advocate studying the Ark Make investments evaluation. That’s probably the most correct. There could also be extra correct ones, however probably the most correct type of evaluation of the potential of autonomy, probably the most correct that I’m conscious of is, is Cathie Woods’, Ark Make investments.

And if I recall accurately, they predicted someplace over a $5 trillion valuation for Tesla simply primarily based on automobile autonomy, not counting Optimus. Yeah, I agree with that.

So I believe, I believe simply primarily based on automobile autonomy, we are able to we are able to 10x, greater than 10x, the worth of the corporate. I consider that’s what’s going to occur. And what have you learnt, it’s 4:20 p.m. Simply observed that.

So, I believe that’s really, that’s fairly correct. Nevertheless it really will get manner crazier when you concentrate on the the Optimus robotic, which can be a humanoid robotic that’s supposed to have the ability to do something you need it to do. It may be your companion, it may be at your home, it will possibly type of babysit your youngsters. It will probably train them, nice trainer. It will probably do manufacturing facility stuff.

Like I believe that the last word ratio of say what number of super-useful humanoid, helper droids would you like? Like who doesn’t need a C-3PO, ? You recognize, however a C-3PO plus an R2-D2 plus, , plus plus. It could be fairly superior. I believe everybody on this planet is gonna need one, like actually everybody. After which there’ll be clearly robots in trade, making stuff.

I believe the ratio of humanoid robots to people will in all probability be not less than two to 1, one thing like that. One to 1 for positive. Which suggests like someplace across the order of 10 million humanoid robots, perhaps 20 or 30.

And so then it’s like, okay, nicely, let’s say the baud price is… I believe the baud price can be in all probability one thing finally, like a billion a 12 months humanoid robots, like really.

And if Tesla simply has a ten p.c share of that, and it is likely to be much more than 10 p.c, and we make like 100 million Optimus models a 12 months. I imply, for reference, the auto trade is roughly 100 million autos per 12 months. In order that type of comparable ballpark not less than inside an order of magnitude.

And I believe we might make one for a price of perhaps at at actually excessive scale of about $10,000. It’d be cheaper than a automobile. And I believe in the event you promote it for $20,000, I believe, that is at massive scale quantity, Tesla would principally make a couple of trillion {dollars} of revenue a 12 months from that.

If the worth earnings a number of is saying underneath 20, or 25, one thing like that, that might imply a $20 trillion market cap from Optimus alone, and possibly 5 to 10 from autonomous autos. So like I believe it’s really conceivable, it’s throughout the realm of risk for Tesla to realize a valuation 10 instances that of probably the most priceless firm at the moment.

So after I say that is like we’re beginning a brand new e-book, I imply, it’s gonna be the very best e-book. Subsequent stage. Subsequent, subsequent, subsequent, subsequent stage.

We’re gonna ensure these robots are good to us and , that’s crucial. So anyway, with that, let me get into the presentation. Blah blah blah blah blah blah blah blah. I believe it is likely to be value simply placing a phrase restrict on future shareholder proposals. It’s like, you may’t have like a novel size. You may’t have a complete novel as a Tesla proposal.

So, as you may see, our influence is accelerating, , we’re beginning to make an actual noticeable dent in carbon emissions. So we’re actually, , making loads of progress in direction of attaining a aim of sustainability.

And one of many results of autonomy is definitely goes to be an excellent higher impact on carbon emissions as a result of I believe that we’ll go from passenger automobiles having about 10 hours of utilization per week, about an hour and a half per day, to in all probability 30 hours within the week, perhaps 50-55 hours, which implies the identical automobile can be used 5 instances extra typically. So that you want a specific amount of sources to make the automobile however we’ll have 5 instances the utilization for my part. I believe that’s fairly doubtless, which can be an much more dramatic influence on carbon emissions.

So, we care rather a lot about sustainable manufacturing. Our factories are stunning, you stroll across the manufacturing facility, it’s really , opposite to what you learn within the press, it’s a very good vibe within the manufacturing facility, like individuals are smiling and joyful. It’s good.

So, I imply, we do care. We really do care rather a lot at Tesla about doing the correct factor. And we’re not going to be good, however we do care rather a lot about doing the correct factor. So our autos are water environment friendly, power environment friendly. We attempt every time attainable to make use of renewables for powering the manufacturing facility and we do our greatest to do the correct factor.

Our batteries are lasting, longer… I received too many issues in my hand. The batteries are lasting rather a lot longer, which is nice. Security is nice within the manufacturing facility. We’re bettering the affordability of EVs. You recognize Mannequin Y is corresponding to BMW X3, however its precise value of possession on a month-to-month foundation is far decrease.

We had been primary in EVs globally final 12 months, so yeah. Let’s see. And congrats to the Tesla workforce on making 6 million autos all-time. The Tesla fleet is absolutely turning into very substantial. I imply, it’s gonna be 7 million autos by the top of this 12 months, over 7 million autos.

We’ve got our manufacturing facility in Fremont is at the moment the highest-volume auto manufacturing facility in North America. And we broke the prior manufacturing document from when it was NUMMI. It’s really fairly wild that we’ve got an enormous automobile manufacturing facility within the San Francisco Bay Space. It’s not precisely the most cost effective place to have a automobile manufacturing facility. It’s like that and the Swiss Alps or one thing.

However we nonetheless handle to make nice automobiles at excessive quantity, and that’s a testomony to the nice workforce we’ve received in Fremont. So congrats to the Fremont workforce.

And lots of people had been saying the Cybertruck is like faux, it’s by no means gonna come out. And now we’re delivery loads of Cybertrucks. We hit a weekly document of 1,300.

And I believe with the Cybertruck, It truly is one thing particular. Some individuals have like totally different opinions on the Cybertruck, however in the event you actually wish to know if one thing is cool, if it’s an excellent product, like present it to a child, okay?

No filter, okay? A child’s received like no filter, like a five-year-old, six-year-old, one thing like that. Or perhaps a three-year-old and say “Which automobile do you want?” “Cybertruck.”

So it’s like, that’s how .

And it’s lastly one thing that it simply seems like the longer term, and it drives so nicely. It’s comfy. It’s only a implausible product. I believe it’s our greatest product, and it’s loads of improvements. It’s received a 48-volt low-voltage system, lastly as an alternative of 12 volts, 800-volt drive practice, the world’s greatest castings. It’s bulletproof; all of the cool issues. It will probably outpull an F-350 Diesel, which is a really spectacular truck, and it will possibly it will possibly do a quarter-mile sooner than a Porsche 911 whereas towing a Porsche 911.

That’s insane! So yeah. If you concentrate on it, how typically do corporations make merchandise that transfer your coronary heart which are actually particular? It’s so uncommon, and I believe that is considered one of them.

And we launched the upgraded 3, which is definitely a implausible automobile, I’d advocate making an attempt it out. It’s actually an excellent automobile, and it’s solely $216 after fuel financial savings. Like whole value of possession is principally 200-something {dollars} when in comparison with gasoline automobiles, the same gasoline automobile. So it’s actually an excellent deal and a enjoyable automobile.

And the Efficiency, Mannequin 3 Efficiency, it’s sooner than a Porsche 911. It’s only a nice, nice automobile. So yeah.

And naturally, the Mannequin Y grew to become the best-selling automobile globally, and that is one thing that we predicted. I believe I mentioned in 2022 the Mannequin Y could be the most important automobile on this planet by greenback quantity gross sales, and by 2023 it could be the most important in unit quantity, and it was. And once more this 12 months it is going to be the best-selling automobile on Earth.

The Tesla Semi: we’re in low-volume manufacturing of the Tesla Semi, and simply final week I permitted the plans for quantity manufacturing of the Tesla Semi.

So we’re gonna make loads of Semi vans. We’re gonna begin off with… Yeah, it’s one thing I believe it’ll really transfer the needle financially. It’s not a small factor. The factor about like, industrial autos is that corporations that use them are tremendous goal. I imply clearly we’re gonna make it have cool fashion and be an superior automobile.

However for industrial autos, the businesses that make the shopping for selections, they only look and say like, “What are the numbers? Does this value much less to move or value extra to move than, say a diesel truck?” And the factor is the economics are significantly better than a diesel truck. It’s type of principally a no brainer.

In case you’re a transport firm, and also you don’t use an electrical, the Tesla electrical Semi, you’re simply shedding cash. Why would you try this? Do you not like cash? Okay. However in the event you do like cash, then I like to recommend utilizing the Tesla Semi.

So I believe that is actually going to really promote at a scale that folks can be stunned at, and we’ll really transfer the needle financially, and do loads of good. And likewise for CO2 and sustainability, as a result of Semis are pushed on a regular basis. Really, even at a lot smaller numbers, they’ve a really huge impact on whole carbon emissions solved.

So clearly, we’ve received some new new merchandise that we’re engaged on underneath the covers and I believe these are going to be fairly particular. A few of them, I believe individuals perhaps at first might imagine, “Oh, it’s not going to be that tremendous,” however simply wait. It is going to be.

Our Supercharger community is constant to develop. Rumors of the demise of the Supercharger are vastly exaggerated.

We’re in truth, persevering with to develop the Supercharger community considerably. The truth is, this 12 months, I believe we’re deploying extra Superchargers this 12 months which are really working, than the remainder of trade mixed. Simply FYI.

Now we’re gonna be extra cautious in regards to the capital effectivity of the place we deploy Superchargers. However for positive, anyplace that has congestion, any type of lacking components of the map that we’re lacking, we’re gonna put the Superchargers there. Even for the rest of the 12 months, we count on to spend about half a billion {dollars} on on Supercharger deployment, so it’s very vital, and it is going to be a nicely spent half a billion. It’s rather a lot.

That is really not exhibiting a bunch of recent markets that can be opening up later this 12 months and subsequent. We clearly need Tesla to be worldwide, and there’s nonetheless loads of international locations which have zero to only a few Teslas, and we clearly need Tesla in all places. So there are loads of new markets that we’re gonna open up later this 12 months or subsequent.

We’re additionally opening our Superchargers to different corporations… That’s the adapter to the previous, considerably clunky connector. However our aim is to be useful to different automobile corporations, so any corporations which are going electrical, we do wish to be useful to them with our Supercharger community. So we’re offering them with adapters and enabling them to have entry to the Tesla Supercharger community, as a result of we predict it’s higher to do this than to create a walled backyard that inhibits EV development.

And we’re additionally innovating rather a lot in battery manufacturing with the 4680 that’s constructed proper right here. And it’s it’s a tough drawback, like there are total corporations that simply make battery cells, that’s all they do. However we’re making good progress. All of the Cybertrucks that you simply see use the Tesla 4680 cell, and we’ve got a transparent path to the 4680 being, we predict, in all probability probably the most aggressive cell from a producing effectivity standpoint.

However it’s a arduous drawback, I’ve to say. There’s various mind harm required to be good at cell manufacturing. It’s like a mind harm excessive. However I believe it does give Tesla resilience within the face of… if there are adjustments within the, I don’t know, geopolitical state of affairs by some means. It’s good to have some independence in cell manufacturing.

We’re making regular progress and we even have the cathode refinery, which you’ll be able to see behind the principle manufacturing facility; you may type of see it within the image there. That’s the cathode refinery after which we’ve received the lithium refinery in South Texas, and so we’re simply ensuring we’ve type of received the items of the puzzle.

In case you had been to take a look at type of a video of how Tesla does say cathode and lithium refining and the way the remainder of trade does it, it’s night time and day. I imply, you may type of eat off the ground within the Tesla refinery and I might not advocate doing so within the others. We’re undoubtedly going very vertical right here, however I believe it’s a smart funding that can repay greater than individuals notice.

I don’t assume this factor is working.

So this 12 months, we’re additionally on observe to finish an enormous variety of power deployments, so that could be a gigantic enhance in deployment functionality. We appear to be monitoring to type of a 200- to 300-percent year-over-year development in power storage deployment and stationary pack. So it’s large. And the the limiting issue actually is with the ability to construct extra Megapacks and construct extra Powerwalls.

So we’re ramping up manufacturing of the Powerwall 3, which can be a game-changer for, on the private stage. The Powerwall 3… It normally takes about three iterations of any given know-how to actually… for it to be one thing the place it’s like “Okay, now we’re actually hitting the candy spot.” So Powerwall 3 is like, an epic product.

The Megapack can also be—I’d name it type of iteration two of the Megapack—can also be an epic product. With the Megapack 3, which is, I don’t know, in all probability a pair years away, we’ll begin really absorbing increasingly of the substation of the type of energy electronics. I type of assume you wish to get to the purpose with the Megapack the place you may actually simply take the high-voltage energy strains and plug them in. There’s no substation. We simply plug them in. Simply drop them down and drop it down, and plug it in, and now it really works.

Which is like mind-blowing for the utility trade by the way in which. They’re like “What?” Yeah, simply plug the wires in and it’ll work for very excessive voltage. In order that I believe is definitely going to be main. So yeah, that is nice. Glorious work by the power storage workforce.

Providers and different are additionally wanting good, so we’re really now making a living on the providers and different stuff. So this can be a type of an enormous deal. And Tesla’s clearly far more than a automobile firm. We do loads of software program Tesla. Roughly half, or a really large share, of the engineering we do is definitely software program engineering.

So Tesla is, I’d say, as a lot a software program firm as it’s a {hardware} firm. It is a very huge deal as a result of automobile corporations will not be software program corporations usually. So this issues rather a lot. Issues like our auto bidder software program for power storage, all of the software program that controls the automobiles, the Megapacks, the Powerwalls, the photo voltaic, clearly for AI and Full-Self Driving are an enormous deal, insurance coverage, providers, and collisions.

Tesla additionally writes loads of software program internally that helps, that we name the Tesla working system internally, that’s head and shoulders above what another firm has I believe in all probability higher than any Fortune 500 firm. The Tesla inner software program is it’s simply manner higher. It’s simply way over what individuals usually consider as a automobile firm.

And Tesla can also be the chief in real-world AI. So there’s actually… this can be a huge deal. Tesla is forward of Google, Meta, anybody on actual world software program. Really taking in video and making selections primarily based on video. Nobody can nobody is even shut. And it’s getting higher, I say with every passing month, if not every passing week.

It’s additionally value noting that Tesla is definitely fairly good at chip design. So the the AI inference chip that was designed by Tesla, that’s in automobiles, we had type of our {Hardware} 3 AI inference, automobiles remodeled the previous 12 months have the {Hardware} 4. We’ve simply accomplished design on {Hardware} 5, which we’re now calling AI 5, as a result of it truly is… There nonetheless really will not be a chip from Nvidia, and I’ve rather a lot respect for Nvidia, or from any firm that we would like to place in our automobile, that’s higher than what we’ve got within the automobile.

We began from scratch in chip design, simply as we began from scratch in AI software program, and we’ve got the very best real-world AI software program, and the very best AI inference chip on this planet from nothing. So this can be a huge deal.

And the the potential of the chips within the automobile is dramatic. Proper now, all of the automobiles are literally coaching. We’ve got {Hardware} 4 run {Hardware} 3 in emulation mode. So we’ll proceed to make vital progress on {Hardware} 3, however later this 12 months, we’ll really bifurcate—proceed engaged on {Hardware} 3, coaching on {Hardware} 3—however then do separate coaching on {Hardware} 4 that would be the type of coaching cluster that we’re constructing on the south facet of the Gigafactory.

And that’ll be devoted {Hardware} 4 video and inference. {Hardware} 4 has cameras which have about 4 or 5 instances higher decision and, relying on the way you depend the type of {Hardware} 4, it’s about wherever from three to eight instances higher than {Hardware} 3.

However every part you’re seeing so far is simply {Hardware} 3, and we nonetheless have an extended method to go earlier than we attain the boundaries of {Hardware} 3. So {Hardware} 3 I believe will nonetheless do superb issues, however {Hardware} 4 I believe will in all probability do about 5 instances higher. Then {Hardware} 5, which comes out in about 18 months or so, is 10 instances extra succesful than {Hardware} 4. It’s like a, if Nvidia {hardware}, it’s type of a B200-class laptop.

So what we’ll simply progressively do is enhance what number of nines of reliability the automobile will get, after which in fact that can go into Optimus as nicely, so the identical chip will go into—{Hardware} 4 will go into, is in Optimus—{Hardware}, AI 5, which can be switching from {Hardware} 5 to AI 5, can be in Optimus and in all automobiles in about 18 months.

And it’s actually only a staggering quantity of compute, and it’s very energy environment friendly compute, as a result of in the event you’re in a cellular utility like a humanoid robotic or a automobile, you may’t simply be sucking down 10 kW, like you may in a knowledge heart. So that you’ve received to be very energy environment friendly.

So {Hardware} 3 and 4 are only some hundred watts. It’s arduous. The {Hardware} 5 will be capable to go in all probability as much as about 700 or 800 watts, however it’ll energy fluctuate contingent upon the complexity of the scene that it’s in. So whether it is in a parking zone stationary, , you don’t need to assume very a lot. Similar to an individual, like in the event you’re in an advanced site visitors situation, you’ve received to assume much more than in the event you’re simply cruising alongside on an empty street.

However one thing that I believe is probably fascinating down the street is, like sooner or later the Tesla fleet I believe will in all probability be over 100 million autos, and if every automobile has a kilowatt of environment friendly inference compute, I believe there’s a type of an Amazon Internet Providers AWS-type alternative.

As a result of in the event you’ve received 100 million autos with a kilowatt of environment friendly inference compute, you’ve received 100 gigawatts of compute. Like 100 gigawatts of compute is rather a lot, and it’s distributed everywhere in the world.

So when the automobile will not be in autonomous mode, which I believe in all probability is, doing Robotaxi work perhaps 50-60 hours per week, however about 100 hours per week, it’s not. It’s in all probability stationary. So there’s 100 hours of 100 gigawatts of inference compute, which I believe we must always use. Why not?

You recognize, when individuals checked out Amazon, which began out clearly as an internet bookseller, and it has grown to be like this unbelievable place the place you should purchase something. After which Amazon Internet Providers, like they’ve received all these computer systems that solely actually see peak utilization typically. However what are they going to do when it’s not peak utilization? And typically Amazon servers are down like 10 p.c. In order that’s after they mentioned, “Nicely, let’s do Amazon Internet Providers.”

After which Amazon Internet Providers grew to become extra priceless than your entire remainder of Amazon.

Anyway, I believe there’s there’s some type of alternative there, that’s fairly vital for Tesla down the street. Once more, no person’s actually factoring that in, however I believe that that really can be fairly vital.

We are also now not compute constrained for coaching, and I examine in with the workforce and it’s like “Is there something we are able to do to enhance the tempo of progress with respect to coaching and inference?” And at the moment, that’s not the limiting issue. The truth is, the limiting issue proper now’s that the quantity of miles between interventions is so lengthy that it takes fairly some time to determine which model is best than the opposite model, as a result of none of them are requiring any interventions.

So it’s like, in the event you begin getting to love 1000’s of miles between interventions or like 10,000 miles to get an intervention, then, the typical individual solely drives about 10,000 miles in a 12 months.

And if it’s like in an city atmosphere, and the typical pace is 20 miles an hour, I imply, our skilled take a look at drivers get fairly bored, frankly. They’re like, “Okay, I drove all week, and there was no intervention.” Just like the spotlight of the week could be like, “Sure, an intervention lastly.” It’s like attending to that time.

So that is the place really having an enormous fleet is extraordinarily necessary, as a result of we are able to deploy a brand new FSD mannequin and run it in Shadow Mode and see how nicely it performs. Examine how the human drives the automobile versus the brand new self-driving construct, after which analyze that delta in Shadow Mode, just like the shadow is aware of, or doesn’t know, simply in case perhaps, after which be capable to assess by getting billions of miles in a short time with the enormous fleet.

That information engine is extremely useful. Like really, it’s not attainable to resolve the self-driving drawback with out having thousands and thousands of autos on the street. In order that’s really… it’s like determining intelligent methods to check how good the subsequent FSD construct is, is definitely a limiting issue proper now.

After which in fact, so we’re constructing one other coaching information heart, proper right here, which can be devoted to {Hardware} 4 coaching. So we’ll bifurcate {Hardware} 3 and {Hardware} 4 coaching later this 12 months, we’ll hold bettering {Hardware} 3, however we’re going to uncork the total functionality of {Hardware} 4 as nicely. So yeah.

However I believe most individuals right here have tried out model 12. We did say Unsupervised Full Self-Driving could be model 12, so we are literally simply preserving the model arbitrarily at 12, after which like pulling a 12.3, 12.4, 12.5. Nevertheless it’s really actually like model 13, model 14. However anyway, it’s simply an arbitrary designation.

So 12.4 is definitely like a complete totally different model than 12.3, and 12.5 is a complete totally different model 12.4. So, you’ll see a extremely large enhancements I believe typically issue 10 enhancements in between successive variations.

After which, as I discussed, the way in which it’ll work for the present fleet is you’ll be capable to add or subtract your automobile to the fleet as you’d like. And there can even be Tesla-owned automobiles, so it’ll be a mix of like, Uber plus Airbnb.

Nevertheless it’ll be fairly wild that there’ll be a software program replace after which the entire the entire fleet instantly turns into accessible. It’s like instantly you’ve received, I don’t know, 7 million, 10 million automobiles, finally tens of thousands and thousands of automobiles, that may do autonomous driving, and as an alternative of getting used 10 hours per week, can be utilized 50 or 60 hours per week.

So it’s fairly wild to simply be in Palo Alto with a bunch of cubes after which a humanoid robotic simply walks previous.

We’ve made an enormous quantity of progress with Optimus in a brief time period, from somebody pretending to be a robotic dancing in a go well with, to a fairly hodgepodge robotic, to a robotic that’s really doing helpful duties within the manufacturing facility at the moment. So we’ve got two Opimus robots in our Fremont manufacturing facility which are doing principally this activity, which is take taking cells off the road and inserting them in a delivery container.

We even have fairly a number of of those cruising round our places of work in Palo Alto. And I believe we’ve received one main {hardware} revision, which ought to be executed by finish of this 12 months or early subsequent. After which we’ll transfer right into a restricted manufacturing subsequent 12 months of Optimus—restricted manufacturing to be used in our factories the place we’ll take a look at out the product, type of, as I say, type of eat our personal pet food or no matter, the digital gear, that’s.

However I believe like subsequent 12 months, my prediction is subsequent 12 months we’ll have over over 1,000, perhaps a number of thousand, Optimus robots working at Tesla.

And issues are going to scale up very quickly from there. So we’ll iron out the bugs. The diploma of autonomy can be radically higher. You’ll simply actually be capable to discuss to it and say “Please do that activity,” or “I’m going to point out you one thing, now try this the factor that I’m exhibiting you.”

And it’ll get to the purpose the place it will possibly watch a video of one thing, like an individual, after which be taught simply by taking a look at that video and try this activity. So yeah.

So actually it’s gonna be fairly one thing. And I’m assured of the prediction that there can be extra… just like the ratio of humanoid robots to people can be higher than one to 1. So there’ll be greater than 10 billion humanoid robots on this planet, in all probability 20 or extra, and Tesla’s gonna be by far the chief in that.

You’re seeing loads of robotic startups. However I believe it’s really very difficult to do Optimus as a robotic startup. As a result of what we’ve discovered, to make Optimus work we’ve needed to design from first rules, from scratch, each a part of the robotic. So the motors, the gearbox, the sensors, the facility electronics, the communication system, every part needed to be executed from scratch. We discovered that there’s principally nothing, there’s no provide chain.

So regardless that there are various electrical motors made on this planet, there’s no provide chain for the forms of motors and sensors and gearboxes which are wanted for a humanoid robotic. What you’re seeing right here is our present technology, a hand and arm which has 11 levels of freedom, our subsequent technology has 22 levels of freedom. It is going to be capable of play the piano. So it’s actually like “Wow.”

Now in fact, like I mentioned, we have to ensure you don’t have the Terminator situation. That’s crucial. So security of the humanoid robotic can be crucial.

However as a result of it requires a lot ground-up design, designing each motor, gearbox, sensor, energy electronics, from scratch, it’s very arduous for a startup to, if not unattainable, for a startup to copy that. However at Tesla, we’ve got the world’s finest electrical engineering. I believe we’ve received the world’s finest mechanical engineering for for gearboxes and for electrical motors, energy electronics. So we’ve got the sources to do this and it applies fairly nicely.

And then you definitely additionally need to have the mind. You want a power-efficient inference laptop, which we’ve received for the automobile and we’ll be utilizing in Optimus. You want the very best in real-world AI, and Tesla has the very best in real-world AI. So that you want all of those. You want a really sturdy hand of playing cards with the intention to make a compelling robotic.

And then you definitely additionally should be superb at scale manufacturing. So with the intention to have the robotic not value like tons of of 1000’s of {dollars}, with the intention to make it value like $10,000 or $20,000, you really must design for manufacturing and be superb at manufacturing.

In my expertise, prototypes are simple in comparison with quantity manufacturing. Prototypes are simple, manufacturing is tough, comparatively talking. Tesla has the manufacturing functionality, it has the engineering functionality, and it has the AI, {hardware}, and software program functionality.

Even probably the most optimistic estimates that I’ve seen for Optimus, the Optimus optimist, I believe underaccount the magnitude of of what the robotic will be capable to do. You recognize, as I mentioned originally of the presentation, I agree with the Ark Make investments evaluation that autonomous transport known as type of a $5 to $7 trillion market cap state of affairs. Optimus I believe is a $25… actually a $25 trillion market cap state of affairs.

Now, I don’t wish to trivialize what’s essential to get there. I imply, it’s an immense quantity of labor that’s required to get there, like tremendous tough. However we’re transferring very quick down that street, and we’re gonna make it occur. So, thanks.

I suppose with that, we are able to go to Q&A. Oh, I suppose we’ve received mics lined up. Dive for the mic.

 

Unknown stockholder: Hey Elon. Final 12 months, I thanks for making the world a greater place for my son to dwell in, and I wasn’t clear. Particularly, I used to be referring to what you’ve executed for the First Modification and our rights.

 

Elon Musk: Thanks.

 

Unknown stockholder: Historical past is not going to overlook it, and the sacrifices you made, and the dangers you took will repay and have paid off.

 

Elon Musk: Thanks. Nicely I very a lot recognize that. You need to say like, “Why was the First Modification so necessary?” You recognize, as a result of individuals got here right here from locations the place in the event that they spoke their thoughts, they’d be put in jail, or killed, or simply shut out from society, ostracized. And so freedom speech is completely elementary to a very good future. And yeah, that’s the rationale for, , buying a Twitter and simply making it a free speech platform.

I believe it’s like, crucial to simply the way forward for civilization. So, thanks.

 

Ronnie, Worker Shareholder: Hey Elon, my identify is Ronnie. I’m in your proper facet. How’s it going? Hey. I work for Tesla gross sales in Orland Park, Illinois, and I used to be at all times questioning, do you assume Tesla might ever transfer ahead in direction of bundling software program as like a package deal to, presumably enhance take price for FSD? You recognize, perhaps bundle it with premium connectivity and future software program choices?

 

Elon Musk: I believe we undoubtedly wish to encourage individuals to attempt FSD, and one of many issues that I believe in all probability is smart, is that when we’ve got a big enchancment, each time we’ve got a big enchancment in FSD, give your clients a like, two-week free trial. So like, “Hey, we’ve made an enchancment to FSD, attempt it for one more two weeks.”

With 12.4, we lastly eliminate the steering wheel nag which I do know was driving individuals loopy. Like, thank heaven for small mercies.

Even simply one thing like that, not having the steering wheel nag, and clearly having a far decrease intervention depend, like way more miles between interventions. So I believe we’ll hold, type of providing individuals free trials of FSD each time we make a big enchancment.

I’m sorry, yeah. If you hear the loud audio system, ears don’t work.

 

Justin (Bearded Tesla Man), Shareholder: Good afternoon. Two questions, really. First, after $56 billion, you may afford to in all probability take your youngsters to Disneyland now. Is that the place you’re going?

 

Elon Musk: Nicely, and by the way in which, it’s value emphasizing that it’s Tesla inventory that I’ve to personal for 5 years, so , it’s not attainable to love, it’s not really money and I can’t lower and run, nor would I wish to. However I’ve really been to Disneyland, Disneyworld many instances with the children. It’s a little bit robust for me to go nowadays with out inflicting a ruckus.

Possibly I ought to identical to, put on a Mickey Mouse outfit and simply go and fake I’m like one of many individuals within the park.

 

Justin (Bearded Tesla Man), Shareholder: In order we work on autonomy, and we’re attending to that threshold the place issues are getting to noticeably superior stage, finally there are going to be some harsh penalties. A part of breaking by way of, proper? And I’m simply curious the place your thoughts is at on that, and have you considered, a few of these early penalties that we’re sadly going to need to have, with the intention to have a greater, safer future. I’m simply questioning.

 

Elon Musk: You imply like scary robots, or what?

 

Justin (Bearded Tesla Man), Shareholder: No, no, within the automobiles with Full Self-Driving.

 

Elon Musk: Okay.

 

Justin (Bearded Tesla Man), Shareholder: Like, we’ve seen some corporations that there’s been some unlucky mishaps, and so they’ve simply straight up closed store and, , I do know that’s not the plan, however these are actual penalties of growing this know-how, and I’m simply questioning the place your thoughts is at on that.

 

Elon Musk: Yeah, nicely, we’re we do attempt to be very cautious with the deployment of FSD. And we do have loads of automobiles so like, inevitably, when there are loads of automobiles and also you’ve received billions of miles, you do have the legislation of enormous numbers, the place “Okay, there’s a small probability of one thing unhealthy occurring.” However while you take a look at the type of safety-per-mile, as a result of we’ve received loads of miles, it’s very clear that the safety-per-mile is best than human driving.

So, we are able to present that to regulators and clearly make our case of the general public and say like, “Really, human driving will not be good.” There’s an individual killed roughly each 80 million miles. So I believe like 35,000 to 40,000 individuals are killed yearly within the U.S. from auto accidents.

What issues is, “Are we making that quantity smaller?” And so long as we’re making that quantity smaller, we’re doing the correct factor.

 

Bikash (?), Shareholder: Hey Elon, that is Bikash (?), I’ve one query.

 

Elon Musk: Certain. Sorry I…

 

Bikash (?), Shareholder: So we all know that, we love you all from our backside of the center. We love you a lot, Elon.

 

Elon Musk: Thanks, love you too.

 

Bikash (?), Shareholder: My query is like, everyone knows Tesla would be the most dear firm on this planet in the future. We simply wish to know you probably have any prediction when and what’s the inflection level.. after we can say that is the inflection level. Is it fixing the FSD, or is it like Optimus on-ground can be that time, out of your perspective?

 

Elon Musk: Nicely, as I discussed earlier than, I believe it’s value wanting on the the Ark Make investments evaluation. I believe that’s the most correct evaluation. Their prediction is, I believe $5 to $7 trillion by 2029 market cap. So greater than 10 instances what issues are at the moment, in 5 years. I believe that’s correct.

 

Bikash (?), Shareholder: Thanks.

 

Unknown Shareholder: Hey, Elon, an enormous fan and I believe historical past will present that you simply’ve had a profound influence on humanity. So I believe that’s simply given.

Only a couple questions, I suppose. I’ve fastened my Tesla dependancy by placing automobiles on Turo and I discovered that about half my renters, it’s the primary time they’re driving a Tesla, after which the opposite half actually wish to purchase one after they’ve tried it out. So I suppose a pair questions.

When might we count on perhaps the referral program to return again if it could come again? And will we additionally get a passenger van, like a 12-passenger van someday soonish.

 

Elon Musk: I’ll add that to my record. So the referral program… Yeah. I believe we’ll re-examine the referral program in all probability subsequent quarter.

It is extremely necessary to type of take a look at the, what’s the absolutely thought-about value of a Tesla? So, with the referral program, it successfully will increase the worth of the automobile. So, , is the worth enhance… What is best for the top buyer: a slight value enhance as a result of the referral program, or not?

However we’ll re-examine that I believe in, subsequent quarter and see if it is smart. I believe some type of referral program does make sense.

However I believe for lots of people, like by far the most important factor we see is that folks simply can’t afford the automobile. That’s the most important factor. Like, that’s the limiter on demand. You may think about within the restrict, if there was say like if Mannequin Y value like lower than $20,000, it could in all probability promote like, in all probability 5 million models. It’d be insane.

Now that’s not possible, , at the moment, however I believe engaged on determining methods to make extra reasonably priced autos is absolutely the sport changer. For most individuals, it’s actually not a query of whether or not they need a Tesla—they do need a Tesla—they merely shouldn’t have sufficient cash to afford one. So we’ve got to make it reasonably priced. That’s important.

Thanks.

 

Hamza, Shareholder: Hey Elon, I simply wished to introduce myself. My identify is Hamza. To begin with, thanks for introducing me to Anuarbek, he and I are actually shut, because of you. And I moved to Austin, because of you.

 

My query is principally for FSD switch: I believe that ought to be one thing that ought to be ongoing. I believe not solely on the good thing about you for getting extra individuals on the fleet and getting statistics and information, but in addition as Tesla house owners, it makes us wish to get the subsequent mannequin and switch over.

For example, the factor that’s been holding me again is wanting to attend for the FSD switch once more. So is there a motive why you haven’t applied that for like ongoing time?

 

Elon Musk: It’s fairly advanced for us to do that. It type of provides a good bit of complexity to the gross sales course of, however yeah. And it’s robust, as a result of we’ve received to earn income by some means, so… You recognize, switch is hard.

 

Shareholder, from the viewers: “Another quarter!”

 

Elon Musk: Sorry? Another quarter? Okay, yet one more quarter. Alright, you bought it—yet one more quarter. Alright.

 

Unknown Shareholder: Elon thanks for internet hosting us. In case you can see me I’m trembling uncontrollably. I actually look as much as you. Shareholder, shopper, tripled my humble, tiny little portion of your shares the final two days, simply being engaged, realizing we had been coming right here. And recognize you internet hosting shareholders, and it means a lot to us.

 

Elon Musk: You’re welcome.

 

Unknown Shareholder: You’re an absolute idol. This query comes as a result of I care about you as a human being, however within the context of being a shareholder, unlocking these values of Optimus, we’d like you. And simply with all the worldwide uncertainty, you’re so high-profile, I simply wish to ensure you’re doing every part to handle your self, security, and well being for the way forward for the corporate.

 

I say that as a result of I care about you as an individual, however since this can be a shareholder assembly within the spirit of shareholder worth.

 

Elon Musk: Nicely, thanks I recognize the sort sentiments. Yeah, I believe I in all probability want to love work out. And like, not get assassinated or one thing, .

I imply, it’s getting a little bit loopy nowadays. Wish to first approximation, the likelihood {that a} homicidal maniac will attempt to kill you is proportionate to what number of homicidal maniacs hear your identify. Okay.

They hear my identify rather a lot, so I’m like, “Okay, I’m on the record,” .

Yeah, so we really did have two homicidal maniacs within the final roughly seven months come to aspirationally triy to kill me, and a bunch of different individuals. So it’s not simply me. After which there wasn’t like an precise subject that they articulated, they had been simply within the homicidal maniac profession, so I do should be type of cautious.

Which isn’t nice as a result of it like forces me to be a bit extra type of standoffish. So now, I’ve stopped signing issues as a result of that’d be a positive method to like, homicidal maniac, I’ll simply have him signal one thing after which shoot him, that kind of factor. So I’ve to be like extra standoffish and stuff.

Which I want to not be, however it appears smart. Like John Lennon, who was like singing about like, “Hey, can’t all of us simply be good to one another?” After which he received shot, by considered one of his followers.

And also you’re like, “Okay.” We’re making an attempt to keep away from that.

So, anyway, I recognize the sort sentiments. I’ll endeavor to remain alive and hold…

 

Unknown Shareholder: Hello, Elon. I used to be studying an article the opposite day: does Tesla nonetheless have someplace within the product timeline a house HVAC system within the works.

 

Elon Musk: A house work together system. We shouldn’t have a house work together system that I’m conscious of. No, no, we don’t one.

 

Unknown Shareholder: HVAC system.

 

Elon Musk: Oh, HVAC system. Yeah yeah, positive. Yeah, within the record of issues that might be like extra helpful than… like it could be good to do could be an excellent HVAC system that could be very power-efficient and has like a built-in HEPA filter, and like take loads of issues that we’ve realized within the automobile and apply that to residence HVAC.

As a result of really, perhaps there’s a nice residence HVAC system on the market, however I haven’t discovered it, which is fairly wild. And simply constructing within the filtration system and with the ability to type of perhaps additionally management humidity considerably, and like I mentioned, be tremendous environment friendly and quiet, that are all issues that we do within the automobile.

That may be a fairly candy factor to do. Possibly we are able to mix that with the Powerwall or one thing. On the record of issues to do, that’s not tremendous excessive, however it could be it could be cool to do this in the future.

 

Sandeep (?) Shareholder: Hello Elon, that is Sandeep (?). I simply wish to thanks for making the Cybertruck.

 

Elon Musk: You’re welcome.

 

Sandeep (?) Shareholder: Yeah, youngsters find it irresistible. Actually. My 4 and 6 12 months previous, they find it irresistible.

 

Elon Musk: Precisely. That’s what I used to be saying youngsters, it’s like superb.

 

Sandeep (?) Shareholder: I went to Disney final week. No one seems at Disney, everyone seems at Cybertruck. And there’s a shaggy dog story in the event you could enable. So we had been making ready my daughter. We went to Destin after which from there we had been driving to Disney after which we had been making ready my daughter—she’s 4 years—to simply get used to strains, and , it’s a must to have loads of persistence to get within the line.

And she or he’s like, “Dada, why don’t we simply say ‘we’ll present you our Cybertruck after which we’ll lower the strains.’”

I imply, she received used to it as a result of we had been making an attempt Superchargers after which everyone was coming over taking photos.

 

Elon Musk: Certain.

 

Sandeep (?) Shareholder: It’s a shaggy dog story, . Yeah. After which I’ve a request. Would you enable a six-year-old to tour the manufacturing facility, perhaps sometime sooner or later? Proper now, it’s capped at 12 years. Although we’ve got referral rewards, it’s capped at 12 years. Would you enable the children to tour to the manufacturing facility? Possibly they’ll see the robots? Possibly you can also make it an occasion or one thing like that?

 

Elon Musk: Yeah, positive. Yeah perhaps we are able to have like a… I’m at all times nervous youngsters’ security and stuff. In case a child like, goes operating off into like, the robotic cell or one thing.

However yeah, we might I believe decrease the… perhaps have like a extra restricted tour that allows youthful youngsters to go. Certain, we’ll try this.

 

Unknown Shareholder: Donald Trump has been an enormous critic of electrical autos. However final week, he stunned us by saying he’s an enormous fan of Tesla, and an enormous fan of you. What did you inform him?

 

Elon Musk: Nicely, , I may be persuasive. So yeah.

Really, I don’t precisely know why he… that’s a very good query. I imply, I’ve had some conversations with him and he does name me out of the blue, for no motive. I don’t know why, however he does.

And it’s like, he’s very good when he calls. And , I used to be like, “You recognize, electrical automobiles, I believe are fairly good for the longer term. America’s the chief in electrical automobiles, . Purchase America and stuff.”

Oh, and I believe he really, loads of his pals now have Teslas and so they all find it irresistible, and he’s an enormous fan of the Cybertruck. So, I believe these could also be contributing elements.

 

Keanu, Shareholder: Hey Elon, in your proper. Yeah, my identify is Keanu, longtime fan of your like, model and firm and every part. I’m questioning while you take the driving force out of the seat for the driverless automobile, how do you propose to deal with interventions, which I’m positive will occur at some price, even when they’re uncommon?

 

Elon Musk: Yeah, so there’s, I imply, clearly we wish to guarantee that if there’s no driver within the automobile, the likelihood of a extreme intervention is extraordinarily low. We we wish to guarantee that the automobile is extraordinarily cautious round susceptible street customers like cyclists or pedestrians. So actually, we’d need the, the likelihood of injuring a pedestrian or bicycle owner to be extremely low, like, manner decrease than somebody driving a automobile.

Now, then there are interventions that occur the place the automobile is solely like, I don’t know, it will get caught down a one-way avenue, the place like loopy development state of affairs that, wherein case it’ll principally cellphone residence and say “Assist, I’m caught.”

After which I believe we are able to in all probability remedy loads of these items simply by , remoting into the automobile and type of like looking at like an enormous RC automobile. That’s what I’m guessing. That’s what I believe we’ll do.

 

Anuarbek, Shareholder: Hey Elon, Anuarbek from Kazakhstan. Thanks for putting in Superchargers I simply wish to acknowledge Tesla Boomer Mama and Sawyer Merritt for all of the efforts they did to arrange the…

There’s an after social gathering, to rejoice, at Lustre Pearl East in the event you guys wish to come and rejoice all of the efforts for the group. Congratulations Elon. Thanks.

 

Shareholder: Thaks for internet hosting at the moment, Elon. It’s about 4 years since you probably did battery day and all through these very formidable targets of attending to a Terawatt-hour of batteries, and earlier in your presentation you alluded to the nice problem of scaling up this new know-how.

I believe as shareholders we’re most … are you able to inform us a little bit bit extra, as a result of when it comes to affordability, which you additionally talked about as this large burden, these 4680s get manufacturing credit and in addition on the buyer facet, get massive credit as nicely. In case you might scale that in order that we might produce full stage of Cybertrucks and in addition begin to put them again within the Y and the three, probably, it could vastly enhance affordability and be nice when it comes to scale.

 

Elon Musk: Certain. So attaining affordability is definitely at this level extra about the remainder of the automobile than it’s really in regards to the battery pack.

So, like the worth per kWh of cells from suppliers has dropped dramatically. So there was an enormous spike for a number of years in the price of of lithium-ion cells from suppliers, as a result of each automobile producer put in gigantic orders for battery packs, like large, large orders. So the worth of like, of lithium and like all of the uncooked supplies and the battery cells went loopy. It doubled. The worth of gross sales doubled. The worth of lithium I believe went up at virtually like five-fold, or like 500 p.c like went up loopy numbers.

So since then, suppliers, battery cell suppliers have elevated their provide, and the orders from different automobile producers have declined. So, I imply, it’s value noting that it’s robust sledding on the market for EVs. You recognize, GM introduced I believe a 50-percent discount in just lately of their EVs. Ford introduced reductions. I believe virtually each producer has introduced reductions of their electrical automobile plans.

Now, Tesla we’re going to extend, however it’s not a straightforward market. To get the price of the automobile down it’s actually… the battery pack is a bit of the puzzle, however it’s actually every part else too. So I actually would describe like, making a automobile extra reasonably priced, it’s like Recreation of Thrones however pennies. Recreation of pennies.

So there’s known as to first approximation 10,000 distinctive gadgets in a automobile, and if every each prices 5 bucks, then you definitely’ve received a $50,000 automobile. So to really get the price of automobile down, you’ve received to chisel away pennies, and to get the ten,000 gadgets to be, , $3 as an alternative of $5. That’s type of what it quantities to.

Now, with respect to our personal cell manufacturing, we do see a path to value parity by the top of this 12 months. A really tough path to value parity. Presently, 4680s value greater than our suppliers. Now, they value greater than the suppliers at the moment, however they value lower than suppliers a 12 months in the past.

So , there’s a little bit of a feast famine factor with with battery cell provide. It’s type of like for DRAM chips. Like, the DRAM trade goes from like, over provide to underneath provide. The worth of DRAM adjustments like loopy.

It’s type of like that for cells. So we count on to realize value parity with even the a lot decrease provider promote value at the moment, by the top of the 12 months.

 

Unknown Shareholder: Hello, Mr. Musk. I’ve been a long-term investor since 2012. I voted to your compensation package deal in 2018 and once more this 12 months, and shout out to Tesla Boomer Mama, Alexandra. I had the privilege to speak to you in 2013 briefly and also you spoke in regards to the truck which grew to become the Cybertruck. You’re a person of your phrase.

I’ve pals everywhere in the world in Asia, Canada, and Europe. And I do know the Cybertruck has been on tour. How’s been the reception for it, the Cybertruck, and when will it’s, or is it attainable to promote, and when will it’s bought internationally?

 

Elon Musk: Yeah, so I believe in all probability, we’d be capable to certify it for different markets someday subsequent 12 months. However like for positive this 12 months, it’s simply North America.

We did design the automobile to North American necessities, as a result of in the event you begin going with a superset of all worldwide necessities, it forces loads of constraints on the Cybertruck that might make the product, frankly, worse.

So I believe we’ll must make a particular model that’s, for instance, China-compliant or Europe-compliant.

Nevertheless it realy doesn’t make sense so as to add that complexity till we’ve achieved a higher-volume manufacturing on the Cybertruck. There’s nonetheless loads of work to do on value down for the Cybertruck. I typically would say like the extent of problem of going from, say, a prototype, you go from a prototype to manufacturing, it’s 100 instances tougher to go from, , prototype to manufacturing is 100 instances tougher, after which when you attain manufacturing, to enhance the worth by 20 p.c, like, the price of items by 20 p.c, is tougher than reaching manufacturing within the first place.

Prefer it’s mega ache. To be frank, it’s not the funnest job on this planet. Like chiseling pennies will not be… it’s like washing the dishes, frankly, like wash loads of dishes right here. Prefer it’s tremendous enjoyable to make prototypes. That’s actually enjoyable and it’s type of cool to get, it’s fairly cool to get the manufacturing going. Then the price of manufacturing is a grind. That’s like, , it’s arduous work.

You recognize, there’s some reward to it. Just like the type of a reward to washing the dishes, I suppose. You have got clear dishes. However that could be a robust… so, that’s actual arduous work.

 

Unknown Shareholder: I simply need to say that there’s been a extremely huge reception, like I’ve pals message me that they cherished the Cybertruck design, and it’s undoubtedly head-turner.

 

Elon Musk: Oh, yeah. I believe from a requirement standpoint, we’d have loads of demand in different components of the world for Cybertruck. No query. Like wherever it goes wherever on this planet, it will get an enormous crowd.

So it’s not a requirement factor, it’s actually we’ve received to succeed in quantity manufacturing, undergo the price grind. It could be tough to overstate the issue in the price grind. It’s actually intense. After which we’ve received to recertify the automobile, which incorporates making some design adjustments for it to satisfy, to be compliant in different markets.

 

Unknown Shareholder: Good afternoon, Elon. I like your footwear. I don’t know if everyone else can see them on the market. Cybertruck. Yeah. My query was, regarding the Basis Collection, do you guys have a sure quantity that you’re planning on making or a timeline of when the non-Basis Collection are going to return out?

 

Elon Musk: Yeah, we’ll begin making the… We’ll finish the inspiration sequence really fairly quickly and the non-Basis Collection someday subsequent quarter.

 

Michael, Shareholder: Hello, Elon. Thanks for delivering shareholder worth, and congrats in your pay package deal. And I’m Michael, I ask loads of questions on the quarterly investor calls. And I wished to ask you, are you able to give a little bit bit extra coloration on the neural web scaling legal guidelines that you simply’re seeing as you’re coaching FSD? Like how a lot information, how way more inference compute, how way more coaching compute do you want for every successive 9 in reliability of the Full Self-Driving software program? And the way a lot information are you at the moment accumulating? Thanks.

 

Elon Musk: Yeah, that’s an excellent query. I imply, that’s one thing that we undergo, actually each week at Tesla. I spend loads of time with the Tesla AI workforce, and I believe in all probability like, an enormous portion of, I imply, it’s actually like, an enormous a part of my job is like, “Okay, we have to get the automobile to drive itself.”

And yeah, it is advisable remedy issues on a chip stage for inference for coaching. For software program, there’s additionally large information storage challenges as a result of you could have petabytes of video coming in. And even for, say, for an enormous Nvidia cluster, it’s really actually arduous to make an enormous Nvidia video cluster really work in coaching. It doesn’t simply open the field and plug it in. It’s not like that in any respect. It’s like an enormous effort required to get an enormous buying and selling cluster to function in any respect, after which to function with excessive uptime.

With respect to love the assorted variations that we’re seeing, such as you go from model 12.3, simply ignore the 12 and consider it like 3, 4, 5, 6, that’s really the way in which to consider it. Ignore the 12 half and simply name it like model 3, model 4, model 5, model 6. That’s how to consider it.

Between each, there’s wherever from, I don’t know, a minimal of a doubling of enchancment to, in some instances, I believe, a five- to 10-fold enchancment. Particularly as we remove type of, say… I believe we’re near eliminating virtually all static-object collisions. So, , like curbs and medians. Like, we’re fairly near having it, to have virtually zero static object collisions.

So when you get to zero static… now you could have a huge enchancment in miles between interventions.

Then you definitely get into lessons of dynamic objects which are in several lessons and totally different, issues can get clearly very difficult. In case you’ve received a fancy intersection with site visitors lights all over, and like any person bumped the one site visitors mild, and now it’s pointing within the unsuitable path, or the site visitors mild’s damaged, and there’s somebody who will not be obeying the site visitors legal guidelines as a result of they’re simply operating a purple or they received confused about site visitors mild. So that you get these very advanced conditions which are a lot tougher to resolve.

After which, like I used to be saying earlier, it really will get, because the system will get higher, it will get tougher to determine which AI mannequin is best, as a result of now , like, “Okay, it’s 1000’s of miles between interventions.”

How can we, as rapidly as attainable, determine which AI mannequin is best. And while you make these totally different AI fashions, they’re clearly not like tremendous deterministic, so we’ve got a brand new mannequin that eliminates one drawback however creates one other drawback. So we’re making an attempt to resolve this by a mix of simulation, importing fashions, having them run in Shadow Mode.

It’s really type of useful that not everybody has Full Self-Driving, as a result of we are able to see, we are able to run it in Shadow Mode and see, “What would this new mannequin have executed in comparison with what the consumer did?

So since we’ve received, , thousands and thousands of automobiles that we are able to do that with, that offers us a delta between what the AI mannequin predicted would do and the consumer would do. And in the event you type of sum up the errors between them, you may see “Oh, there was a much bigger error stack from this mannequin versus that mannequin,” while you uploaded them into, every uploaded them into 100,000 automobiles.

However that’s the most important limiter proper now. It’s not coaching, it’s not information, it’s really testing the AI fashions.

After which determining intelligent methods to determine if a brand new mannequin is best or not. Like there have been type of specific intersections which are tough. And so if we simply, like all of the fashions can be nice at like driving on a well-painted street, with no intersection. They’ll all be nice at that. However will they be nice on the difficult…

So we’ve recognized a number of thousand intersections in america the place we’ll really take the brand new mannequin and check out the automobile in these very tough intersections. Just like the, , the type of well-known like “Chuck’s left flip.” So in the event you think about Chuck’s left flip—hey Chuck. I’m wondering what the neighbors assume.

However there’s many such difficult site visitors conditions within the nation. So we’ve recognized a number of thousand, which we then ship automobiles to these areas to check the fashions.

After which as I discussed, as we’ve but to uncork any of the flexibility of {Hardware} 4, which we’ll do later this 12 months. So I believe the exponential price of enchancment of miles between intervention will proceed and can speed up.

 

Unknown Shareholder: Hey Elon. I used to be questioning if, as you’ve known as it, a Tesla is principally a robotic with wheels, and so I’m questioning, as that logic transfers over to Optimus, what sort of… Will Tesla use any massive language fashions on prime of the present Tesla robotics capabilities? And likewise, in that case, will Optimus have any type of character? And would that be one thing that the top consumer may be capable to have management over?

 

Elon Musk: Sure, to all of these questions. Sure to all. Like we’re headed for a wild future. Wild, wild wild. Automobiles will drive themselves, individuals may have tremendous useful humanoid assist robots. And yeah, you’ll be capable to customise the character, customise the voice. And actually, the robotic will type of get to know you as nicely, and get to know your preferences. You gained’t even need to say issues as a result of it’ll simply type of perceive you.

I believe we’ll get so far the place it’s like, it’ll be odd to not have a robotic buddy, type of, to not have your C-3PO and R2-D2.

 

Max, Shareholder: Hello, Elon. Max right here, large fan. Thanks for internet hosting us. I wished to ask you, how a lot integration work do you assume can be wanted to deploy Optimus into various kinds of factories, industries? Like distinctive technicians, or simply have them go watch? How do you foresee that?

 

Elon Musk: Nicely, I believe in the event you quick ahead a number of years, it actually can be fairly a generalized robotic, like I’d say two years from now. Like subsequent 12 months… this 12 months it’s fairly particular, task-specific coaching. So to do a specific activity, we’ve got to type of do a good bit of coaching to resolve that activity.

However over time, I believe you type of accumulate these type of coaching primitives the place like, calling strolling, for instance, is a coaching primitive. Choosing one thing, figuring out an object, and grabbing it, could be a primitive.

And these primitives are then generalized to something. So you may say “Choose up a cup, choose up a shirt, fold the shirt.” These these items will generalize fairly rapidly.

So I count on in all probability not subsequent 12 months, however like in 2026, it’s actually the type of factor the place you might inform it to do type of a variety of duties, together with duties the place it has not particularly executed that actual factor earlier than. Most likely, I’m guessing, 2026.

 

Max, Shareholder: And do you foresee a less expensive model the place duties don’t require like strolling for instance, so the {hardware} will develop into rather a lot easier, or cheaper?

 

Elon Musk: We’re gonna concentrate on making only a implausible humanoid robotic at scale, and actually attaining scale economies and constructing that humanoid robotic. At very excessive quantity, in the event you’re actually good at manufacturing, you will get the price of virtually something right down to its constituent components.

Basically, the burden and in the event you simply take a look at the burden of the uncooked supplies instances the worth of these uncooked supplies, excluding circuit boards, you actually can say like if if it weighs much less, it’s going to value much less.

However what I’m saying is that it’s higher for us to realize very excessive quantity with Optimus than to have a variety of robots which have decrease quantity.

Uh, hello.

 

Unknown Shareholder: Probably the greatest issues in regards to the latest certifying of your compensation package deal was listening to all of the constructive suggestions of present and former workers to what you could have contributed to Tesla. Within the unlucky occasion that you simply’re hit by a automobile, not Full Self-Driving, can you are taking a couple of minutes or a number of seconds and brag in your board and the remainder of your management to guarantee us that, even with out you, Tesla has an unbelievable future at $30 trillion?

 

Elon Musk: Nicely, I believe Tesla has a very good future with out me. I believe I’m a useful accelerant to that future.

For know-how, it issues in the event you’re forward or not forward, rather a lot. What issues will not be innovation, however the price of innovation. Are you able to do in a single 12 months what different corporations do in two years or three years? So in all probability my greatest, most useful factor is as innovation accelerant.

As a result of given sufficient time, the assorted startups which are doing humanoid robots will finally succeed. One in all them will. So what actually issues is, can we be a lot sooner than everybody else? Can our product be executed a number of years earlier than theirs and be higher?

As a result of if that’s not the case, then they’ll obtain the valuation and never Tesla. They may make the worth product, and never Tesla. So, , that’s the place I believe I’m in all probability most helpful, is that accelerating tempo of know-how and innovation and attending to scale. Yeah.

That’s it for me, principally, however I’m very a lot heartened by and recognize the assist of present and former Tesla workers, Tesla board, and all of you guys for serving to out. My coronary heart goes out to you.

 

Jessica, Shareholder: Hello Elon. Jessica, or my identify’s Jessica, and I’ve lived full-time RV for about three years in South Texas. And I simply wished to thanks to your Starship, or for the Starship program and every part you’re doing there, along with Tesla.

 

Elon Musk: Wait, do you’re employed at SpaceX or one thing?

 

Jessica, Shareholder: No.

 

Elon Musk: Okay, however you reside in an RV in South Texas?

 

Jessica, Shareholder: Yeah. Hello. And in my RV park, they don’t enable automobile tenting for Teslas or electrical autos in any respect in the event you’re not pulling a trailer. And I really feel that there’s an enormous alternative there, but in addition for, only for instance, people who find themselves coming into city for Starship launches in Teslas, if they may park someplace in a single day and trickle cost, and perhaps have entry to a rest room facility or simply one thing easy like that. Simply one thing I wished to simply put ahead, as a result of I do know that lots of people come into the park and are dissatisfied they’ll’t keep so. Only a thought.

 

Elon Musk: Okay, received it. Alright. I’ll inquire and see if there’s like perhaps some place that might enable individuals to remain of their automobiles. Which in a Tesla, you actually can typically keep fairly comfortably in a automobile. And yeah, and cost. Alright, thanks.

I believe, so this must be the final query, I believe? Or perhaps final two. Yeah, alright. So final two questions. You and also you, two guys.

 

Steven, Shareholder: Hey, Elon, my identify is Steven. I’m really grateful for all you’ve executed for humanity and watching your corporations and what you’ve executed has been probably the most thrilling, hope-inspiring film that there’s ever been. So thanks a lot.

 

Elon Musk: Thanks.

 

Steven, Shareholder: And my query at the moment is about lithium refining. Previously, you said that might be a limiting issue sooner or later, and I do know Tesla has constructed the refinery in Texas. I used to be simply type of curious, your present opinion in regards to the refinery. Do you assume there’s sufficient capability coming on-line or will Tesla must develop previous Texas in that regard?

 

Elon Musk: There’s sufficient lithium refining, in the event you depend China. If there’s a geopolitical problem on that entrance, then there could also be a scarcity of lithium. However China is excellent at refining, so.

However I believe, simply Tesla determining lithium refining, understanding what it takes, after which, as soon as we perceive the way it works, then we are able to scale it up from there. I believe it’s fairly necessary to watch out with geopolitical threat, and simply guarantee that, in a worst-case state of affairs, that Tesla is okay. Alright.

That is the final query.

 

Nikhil, Shareholder: Hello, Elon, thanks. Congratulations for yet one more huge win. I’m Nikhil, I’m primarily based out of Silicon Valley. And as you talked about on FSD consciousness and giving individuals rides, as a result of most individuals until they actually expertise it, they don’t fairly understand how secure it’s turning into, and the way handy it’s turning into.

So I constructed Tesmi (?), an organization, it’s a platform for Tesla house owners to supply studying experiences for FSD, and we’d like to discover how we may also help scale together with your assist and steerage. And we’d like to have a follow-up dialog to debate extra particulars with you ways we are able to work collectively. Thanks.

 

Unknown Shareholder (from the road for the mic): I’ve a suggestion.

 

Elon Musk: Okay, positive. Okay, positive, positive, positive, positive. You actually wish to ask a query.

 

Unknown Shareholder (from the road for the mic): A follow-up, please.

 

Elon Musk: I’m unsure reply that query, precisely. However we’re centered on bettering FSD for positive.

I believe adoption can be widespread when it’s actually working insanely nicely, and it’s driving like a five-star Uber driver, I believe adoption can be can be very, very fast.

 

Unknown Shareholder (from the road for the mic): I’ve a extremely good suggestion.

 

Elon Musk: Okay, what’s the suggestion? Certain.

 

Unknown Shareholder (strikes as much as mic): I shared this suggestion with considered one of your FSD workforce, however I don’t know whether or not it reached you or not. Mainly, as FSD retains on bettering, we aren’t fairly positive at what price it is going to be bettering, the march of strains. And so loads of type of skeptic stays as to when you may precisely function Robotaxi.

So it occurred to me that in between Supervised FSD and Robotaxi, there’s something, intermediate stage, that’s commercializable, which is what I might name a robotic rental automobile.

Okay. The concept is that you’d, individuals would go to your platform to order a rental automobile, and you’d ship that in a single day to the entrance of their driveway. After which, so the one time that the automobile could be driving with out a individual is at night time with no person, and you’ll take as lengthy and also you drop within the entrance of the automobile, and after that it’s supervised. So that can get you to commercialization a lot sooner, way more assured. In order that’s my suggestion.

 

Elon Musk: Alright. Nicely, I recognize the thought. I believe like I mentioned, the progress in FSD can be actually superb. You’ll see with every successive model, like I mentioned, one of the simplest ways to consider FSD, ignore the 12. Simply consider the purpose quantity going from model 3 to 4 to five to six, and also you’ll see simply radical enhancements with every successive model.

If the present present development continues, it’s going to be like… you’ll actually discover that you simply don’t intervene in the midst of a 12 months, kind of factor, even in advanced conditions.

Anyway with that, thanks very a lot to your assist. Thanks, guys. Alright.

 

 

You may watch the total 2024 Annual Shareholder Assembly beneath.

 

What are your ideas? Did you see any errors in our transcript? Let me know at [email protected], discover me on X at @zacharyvisconti, or ship us ideas at [email protected].

Tesla 2024 Annual Shareholder Assembly transcript: June 13, 2024