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 elements. First, we’re going to cowl the 12 gadgets that stockholders have been requested to vote on, in addition to another issues which have been correctly offered. Second, our founder and CEO, Elon Musk will present a presentation.

Throughout the course of the next classes, we might talk about our enterprise outlook and make different forward-looking statements. Such statements are predictions based mostly on present expectations, precise occasions or outcomes might materially differ on account of numerous dangers and uncertainties, together with these disclosed in our most up-to-date 10-Okay or 10-Q as filed with the SEC. Such forward-looking statements signify our views as of right now shouldn’t be relied on hereafter, and we disclaim any obligation to replace them after right now.

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

 

Robyn Denholm: Thanks, Brandon, and good day, everybody. As chair of Tesla’s board, I’m honored to welcome you all to our dwelling, 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 vitality like you might be.

It’s a shareholder base whose pursuits the board are proud to signify. It’s also a shareholder base that understands that as a way to speed up the world’s transition to sustainable vitality, and a sustainable vitality economic system, Tesla must develop essentially the most revolutionary applied sciences not solely in autos, however in vitality and synthetic intelligence as effectively.

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

Some highlights embody the Mannequin Y turning into one of the 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 vitality storage deployments reaching an all-time excessive in 2023, with the deployment pattern persevering with in 2024.

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

However to proceed the exponential development in greenhouse fuel emission avoidance, we not solely must 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 method to autonomy is scalable. And that accomplishments in synthetic intelligence, together with leveraging our present manufacturing traces 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 isn’t just about avoiding emissions. It must take note of 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 business common, and for the third 12 months in a row, we energy our Supercharger community with one hundred pc renewable vitality.

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 economic system for vitality 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 economic system.

Whereas sustainability is our mission, we even have the aim of security. Our vehicles are engineered to be among the most secure on this planet and we take real-world information from our fleet, and our capability 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. Primarily based on 2023 information, Tesla automobiles 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 those that trip with you.

With one other 12 months of progress in furthering our mission underneath our belt, I need to take this second to thank our phenomenal Tesla staff whose creativity, exhausting work, and dedication are the supply of our success. And as most are additionally shareholders alongside each one in all you, I hope every worker takes delight in within the position that you’ve got performed in Tesla’s accomplishments. I’m happy with you and the board and I respect you tremendously.

Lastly, I need 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 essential 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, goal, 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 intently with our group 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 right now proceed to reap the benefits of our shareholder platform to reinforce your engagement with Tesla. I need to give a particular shout out to our small however mighty IR group and authorized group, and everybody concerned in working this 12 months’s proxy marketing campaign—each inside and out of doors of Tesla.

There’s nonetheless a lot to do, but it surely has galvanized us across the robust perception that the correct issues are at all times price 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. Nevertheless, for those who want to vote your shares right now, 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 containers 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 report 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 might 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 govt compensation on a non-advisory foundation; to approve the re-domestication of Tesla from Delaware to Texas by way of conversion; to ratify the 100-percent performance-based inventory possibility award to Elon Musk that was beforehand authorized 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 beneficial 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 relating to discount of director phrases to 1 12 months. Our board has beneficial 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 an identical proposal in 2021. 55 % supported it, though the board put up a competing proposal, accountability each different 12 months as an alternative of yearly, neither obtained the required 67 % of shares owned. 90 % of the S&P 500 have a declassified board. Most institutional shareholders will once more assist our proposal. Be part of them.

The current Delaware courtroom case recognized three authorized deficiencies at Tesla: administrators usually are not unbiased; the info of the pay plan offered to buyers had been deceptive; and the board failed to barter correctly. A serious a part of a treatment 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 a very powerful vote right now, since it could allow buyers to vary the board, bringing new expertise and professionalism. John Chevedden and easy majority vote is the opposite essential vote. One other essential endorser is Nell Minow, co-founder of firms 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 firms usually are not. 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.

Chunk the bullet. Put together for a future that doesn’t rely upon a superhero dictatorship. We have to transition from a board dominated by family and friends to one in all skilled 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, staff, and shareholders looking 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 relating to easy majority of provisions in our governing paperwork our board has beneficial 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: Hi there, that is John Chevedden. Proposal seven easy majority vote. Shareholders requested the board of administrators take the mandatory 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 mandatory 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 % 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 easy 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 may achieve this right now.

Shareholder rights and a easy majority vote normal are all of the extra essential when Tesla has a CEO, Elon Musk, who’s threatening to offer 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 stated, “I imagine the Tesla board of administrators is essentially 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 relating to annual reporting on anti-harassment and discrimination efforts. Our board has beneficial in opposition to for the explanations set forth within the proxy. This stockholder proposals proposed by the New York State Frequent 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 will have three minutes.

 

Kristen Corridor: Thanks. Hi there, 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 specific deal with 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 goal. We make investments solely in these firms 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 vitality market house. Nevertheless, when wanting underneath the frunk we discover failures in office administration—one of the crucial essential elements of any enterprise.

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

They could additionally result in difficulties in recruiting high-quality staff, 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 staff, with allegations together with repeated use of racial epithets by managers and staff, segregation, and discrimination in opposition to non-white staff in job assignments, pay and promotion, and retaliation when staff 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 relating to the adoption of freedom of affiliation and collective bargaining coverage. Our board has beneficial 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: Hi there, I’m Tejal Patel, the Government 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 present coverage fails to obviously clarify how conflicts between worldwide and native labor legislation shall 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 employees 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, moderately 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 recommend that Tesla will not be respecting its employees’ 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 scenario, Reuters wrote that Tesla has a coverage of not signing collective agreements, which, if true, would immediately contravene the corporate’s present coverage. In Germany, Tesla faces allegations of refusal to discount and poor working situations.

In america, Tesla has had antagonistic choices by the complete 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 staff from becoming a member of unions or performing concertedly.

It’s also 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 of enabling rights, that means that they empower employees to successfully advocate for extra labor rights, together with the correct to a protected 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 relating to reporting on results and dangers related to electromagnetic radiation and wi-fi applied sciences. Our board has beneficial 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 right now on behalf of shareholder Landry Purcell relating to her proposals looking 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 weak 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 a whole bunch of different consultants, that present exposures to non-ionizing electromagnetic fields known as EMF represent a severe and unrecognized public well being danger.

Tesla automobiles function with the 1200-pound battery that emits magnetic fields, and likewise makes use of wi-fi tools similar to Wi-Fi, and radar, emitting wi-fi radiation. Tesla ought to present clear info on measured exposures and efforts to cut 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 of electromagnetic fields to be uninsurable, similar to asbestos on account of potential well being and environmental damages. Tesla’s shareholders have a proper to know the way the corporate insures itself in opposition to such dangers.

The truth that present ranges could also be authorized doesn’t imply they’re protected. Actually, U.S. laws had been set greater than a quarter-century in the past. It has been three years because the 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 customers 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 haven’t any safety from EMF that may go extra deeply into their thinner skulls. To mitigate dangers for Tesla, the corporate might defend its automobiles and guarantee wi-fi attendance could possibly 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 compounds. Buyers can encourage the corporate to take an identical management position relating to lowering EMF.

It’s time for the corporate to unambiguously compete on security relating to 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 relating to adopting targets and reporting on metrics to evaluate the feasibility of integrating sustainability metrics and to senior govt compensation plans. Our board has beneficial 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 in your time. I’m Constance Ricketts and right now 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 govt compensation plans.

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

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

Tesla’s proxy assertion doesn’t provide substantive proof of how the voided 2018 award harms stockholder democracy or how its ratification will treatment prior deficiencies and result in a distinct end result. Likewise, the opposition to this proposal fails to point out any proof of an present performance-based part built-in into the chief 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 govt compensation and doubles down on the argument that the currently-contested govt pay construction is the one technique of motivation to realize our firm’s mission. This dedication to the established order primarily dismisses the continuing 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 worth, 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. Nevertheless, stockholder democracy permits us to oppose calls for like 25 % management of the corporate and the most important pay package deal in company American historical past by way of 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, vitality, and contributions. Fairly the opposite, as it’s our responsibility 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 relating to committing to a moratorium on sourcing minerals from deep sea mining. Our board has beneficial 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 business is transferring ahead to use the deep sea. We imagine this business 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 is going to 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 complicated and considerable with life. Its ecosystems are slow-growing and fragile, with little to no capability to get better from outdoors disturbance. Plans are transferring ahead to launch the method for business 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 presently applies to mining within the deep sea. Over 800 marine science and coverage consultants, 25 nations, 72 indigenous teams, and 48 firms are calling for a ban, moratorium, or precautionary pause on deep sea mining. This contains Tesla’s opponents 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 business. 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 essentially the most bold future EV situations could possibly 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 exhibits 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.

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

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

First, our stockholders have authorized 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 authorized govt compensation on a non-binding advisory foundation.

Third, our stockholders have authorized 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 authorized the re-domestication of Tesla from Delaware to Texas.

Fifth, and at last, our stockholders have authorized the ratification of the one hundred pc performance-based inventory possibility award to Elon Musk that was authorized 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 offer individuals hope that there’s a path to a totally sustainable world economic 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’ll occur.

 

Per Lekander: This was actually the start of the tip 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 automotive, beating out Toyota RAV-4 and Corolla its fashions.

 

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

 

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

 

Elon Musk: When you ask the incorrect query, the correct reply is unimaginable.

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

It’s very uncommon a product comes alongside that’s seemingly unimaginable that consultants stated would by no means be made. And that is a type of occasions. Lastly, the longer term will appear like the longer term.

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

Vitality storage deployments, the Megapack specifically, reached an all-time excessive in Q1 resulting in report profitability for the vitality enterprise.

That is the machine that builds the machine and the manufacturing unit is the product and this constructing is essentially the most superior automotive manufacturing unit that Earth has ever seen.

When you worth Tesla as an auto firm, it’s the incorrect framework. If someone doesn’t imagine Tesla’s gonna remedy autonomy, I believe they shouldn’t be an investor within the firm. However we are going to, and we’re.

 

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

 

Elon Musk: Hey guys! Welcome to the Tesla shareholder assembly. I simply need to begin off by saying, sizzling rattling, I really like you guys. Yeah. We’ve got essentially the most superior shareholder base. I imply, any public firm, it’s unbelievable. Wow. So and, we’ve acquired a fantastic kind of shareholder assembly right here to recap the achievements of the corporate and inform you 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 intently perceive, such as you get it, . So like, the essential 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 vitality downside, , with electrical automobiles, 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 stated, you guys perceive, however I believe a lot of the world doesn’t but perceive.

In speaking to a whole lot of the kind of massive institutional buyers, they’re typically in like New York, and so they don’t drive vehicles.

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

They usually’re like, “Oh, no.”

“Okay, effectively it is best to attempt it. That might be a very good factor to do.”

And for those who simply plot the factors on the curve of how effectively autonomy is progressing, and simply imagine 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 in reality, I invite you to only do it personally. Simply say “okay, with every launch, what number of miles do you drive earlier than it’s important to intervene?”

It’s like actually that easy. And with every launch, you’ll see that there’s a giant enchancment, massive enchancment, and it appears like an exponential. And it’s very clear that that may really go to the purpose the place it’s really far safer than an individual driving the automotive.

I’ve some perception into, , the following releases as a result of we’ve acquired, principally, for each launch that’s on the street, we form of see what the following technology launch is, and just a little bit in regards to the launch after that. So we now have some perception into the place it’s going and it’s actually superb. No query in anyway that may far exceed human security. Yeah, no query.

And I believe I’ve talked about this. Like, typically it’s useful to kind of reiterate and join among the dots, as a result of typically individuals surprise, “effectively, how do you go from this massive fleet, to truly monetizing the fleet in an autonomous scenario?” And it’s really a mixture of like, Airbnb, and Uber to a point.

So like, there’ll be some vehicles that Tesla owns itself, it’s form of like an Uber style, however then for the fleet that’s owned by our clients, it will likely be like an AirBnb factor. You possibly can add or subtract your automotive to the fleet everytime you need.

So you’ll be able to say like, “I’m going away for every week.”

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

So you’ll be able to say you’ll be able to add it to the fleet for just a few hours, for just a few days, for just a few weeks. Everytime you need to again, you’ll be able to say “come again” and the automotive 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 automotive, will far exceed the precise month-to-month cost.

After which Tesla will clearly take a rev share on that, however a lot of the cash will go to the proprietor of the automotive. 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 just a little optimistic typically. You already know, I don’t have an entire lack of self consciousness. But when I wasn’t optimistic, this wouldn’t exist this manufacturing unit wouldn’t exist.

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

So, just a little anecdote. When had been youngsters in class, my brother would inform me the incorrect 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, “Effectively, as a result of in any other case you’d be late for the bus.”

That is an precise factor that will occur, so I assume I’ve been kind of pathologically optimistic from start. However like, that’s the rationale why that is all of the stuff is going on anyway, it’s like, I gotta be considerably pathologically optimistic, however I do ship in the long run. That’s the essential 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 essentially the most correct. There could also be extra correct ones, however essentially the most correct kind of evaluation of the potential of autonomy, essentially 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 based mostly on automobile autonomy, not counting Optimus. Yeah, I agree with that.

So I believe, I believe simply based mostly on automobile autonomy, we will we will 10x, greater than 10x, the worth of the corporate. I imagine that’s what’s going to occur. And what are you aware, it’s 4:20 p.m. Simply seen that.

So, I believe that’s really, that’s fairly correct. However it really will get means crazier when you consider the the Optimus robotic, which can be a humanoid robotic that’s meant to have the ability to do something you need it to do. It may be your companion, it may be at your own home, it might probably kind of babysit your youngsters. It could possibly train them, nice instructor. It could possibly do manufacturing unit 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 already know, however a C-3PO plus an R2-D2 plus, , plus plus. It will be fairly superior. I believe everybody on this planet is gonna need one, like actually everybody. After which there’ll be clearly robots in business, 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 certain. Which implies like someplace across the order of 10 million humanoid robots, possibly 20 or 30.

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

And if Tesla simply has a ten % share of that, and it could be much more than 10 %, and we make like 100 million Optimus models a 12 months. I imply, for reference, the auto business is roughly 100 million automobiles per 12 months. In order that kind of comparable ballpark not less than inside an order of magnitude.

And I believe we might make one for a price of possibly at at actually excessive scale of about $10,000. It’d be inexpensive than a automotive. And I believe for those who promote it for $20,000, I believe, that is at massive scale quantity, Tesla would principally make a few 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 will imply a $20 trillion market cap from Optimus alone, and possibly 5 to 10 from autonomous automobiles. So like I believe it’s really conceivable, it’s throughout the realm of chance for Tesla to realize a valuation 10 occasions that of essentially the most useful firm right now.

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

We’re gonna make certain 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 could be price simply placing a phrase restrict on future shareholder proposals. It’s like, you’ll be able to’t have like a novel size. You possibly can’t have an entire novel as a Tesla proposal.

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

And one of many results of autonomy is definitely goes to be a fair higher impact on carbon emissions as a result of I believe that we’ll go from passenger vehicles 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, possibly 50-55 hours, which suggests the identical automotive shall be used 5 occasions extra typically. So that you want a certain quantity of sources to make the automotive however we’ll have 5 occasions the utilization in my view. I believe that’s fairly doubtless, which shall be an much more dramatic influence on carbon emissions.

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

So, I imply, we do care. We really do care lots at Tesla about doing the correct factor. And we’re not going to be excellent, however we do care lots about doing the correct factor. So our automobiles are water environment friendly, vitality environment friendly. We attempt every time attainable to make use of renewables for powering the manufacturing unit and we do our greatest to do the correct factor.

Our batteries are lasting, longer… I acquired too many issues in my hand. The batteries are lasting lots longer, which is nice. Security is nice within the manufacturing unit. We’re enhancing the affordability of EVs. You already know Mannequin Y is similar to BMW X3, however its precise value of possession on a month-to-month foundation is way decrease.

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

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

However we nonetheless handle to make nice vehicles at excessive quantity, and that’s a testomony to the good group we’ve acquired in Fremont. So congrats to the Fremont group.

And lots of people had been saying the Cybertruck is like pretend, it’s by no means gonna come out. And now we’re transport a whole lot of Cybertrucks. We hit a weekly report of 1,300.

And I believe with the Cybertruck, It truly is one thing particular. Some individuals have like completely different opinions on the Cybertruck, however for those who actually need to know if one thing is cool, if it’s a fantastic product, like present it to a child, okay?

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

So it’s like, that’s how .

And it’s lastly one thing that it simply appears like the longer term, and it drives so effectively. It’s snug. It’s only a incredible product. I believe it’s our greatest product, and it’s a whole lot of improvements. It’s acquired a 48-volt low-voltage system, lastly as an alternative of 12 volts, 800-volt drive prepare, the world’s largest castings. It’s bulletproof; all of the cool issues. It could possibly outpull an F-350 Diesel, which is a really spectacular truck, and it might probably it might probably do a quarter-mile sooner than a Porsche 911 whereas towing a Porsche 911.

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

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

And the Efficiency, Mannequin 3 Efficiency, it’s sooner than a Porsche 911. It’s only a nice, nice automotive. 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 stated in 2022 the Mannequin Y can be the most important automotive on this planet by greenback quantity gross sales, and by 2023 it might be the most important in unit quantity, and it was. And once more this 12 months it will likely be the best-selling automotive on Earth.

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

So we’re gonna make a whole lot of Semi vehicles. 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, business automobiles is that firms that use them are tremendous goal. I imply clearly we’re gonna make it have cool type and be an superior automotive.

However for business automobiles, the businesses that make the shopping for choices, 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 a lot better than a diesel truck. It’s form of principally a no brainer.

When 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 do this? Do you not like cash? Okay. However for those who do like cash, then I like to recommend utilizing the Tesla Semi.

So I believe that is actually going to truly promote at a scale that individuals shall be shocked at, and we’ll really transfer the needle financially, and do a whole lot of good. And likewise for CO2 and sustainability, as a result of Semis are pushed on a regular basis. Truly, even at a lot smaller numbers, they’ve a really massive impact on complete carbon emissions solved.

So clearly, we’ve acquired 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 possibly at first might imagine, “Oh, it’s not going to be that tremendous,” however simply wait. Will probably be.

Our Supercharger community is constant to develop. Rumors of the loss of life of the Supercharger are enormously exaggerated.

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

Now we’re gonna be extra cautious in regards to the capital effectivity of the place we deploy Superchargers. However for certain, anywhere that has congestion, any kind of lacking elements 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 will likely be a effectively spent half a billion. It’s lots.

That is really not displaying a bunch of latest markets that shall be opening up later this 12 months and subsequent. We clearly need Tesla to be worldwide, and there’s nonetheless a whole lot of nations which have zero to only a few Teslas, and we clearly need Tesla in all places. So there are a whole lot of new markets that we’re gonna open up later this 12 months or subsequent.

We’re additionally opening our Superchargers to different firms… That’s the adapter to the previous, considerably clunky connector. However our aim is to be useful to different automotive firms, so any firms which are going electrical, we do need 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 lots in battery manufacturing with the 4680 that’s constructed proper right here. And it’s it’s a tough downside, like there are complete firms 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 now have a transparent path to the 4680 being, we predict, in all probability essentially the most aggressive cell from a producing effectivity standpoint.

However it’s a exhausting downside, 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 scenario someway. 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 see behind the principle manufacturing unit; you’ll be able to kind of see it within the image there. That’s the cathode refinery after which we’ve acquired the lithium refinery in South Texas, and so we’re simply ensuring we’ve form of acquired the items of the puzzle.

When you had been to have a look at kind of a video of how Tesla does say cathode and lithium refining and the way the remainder of business does it, it’s night time and day. I imply, you’ll be able to kind 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 sensible funding that may repay greater than individuals understand.

I don’t assume this factor is working.

So this 12 months, we’re additionally on monitor to finish an enormous variety of vitality deployments, so that could be a gigantic improve in deployment functionality. We appear to be monitoring to kind of a 200- to 300-percent year-over-year development in vitality storage deployment and stationary pack. So it’s big. And the the limiting issue actually is having 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 often 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 be—I’d name it kind of iteration two of the Megapack—can 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 kind of energy electronics. I kind of assume you need to get to the purpose with the Megapack the place you’ll be able to actually simply take the high-voltage energy traces 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 business by the best way. 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. Wonderful work by the vitality storage group.

Providers and different are additionally wanting good, so we’re really now being profitable on the providers and different stuff. So this can be a form of a giant deal. And Tesla’s clearly far more than a automotive firm. We do a whole lot of software program Tesla. Roughly half, or a really big 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. This can be a very massive deal as a result of automotive firms usually are not software program firms usually. So this issues lots. Issues like our auto bidder software program for vitality storage, all of the software program that controls the vehicles, the Megapacks, the Powerwalls, the photo voltaic, clearly for AI and Full-Self Driving are a giant deal, insurance coverage, providers, and collisions.

Tesla additionally writes a whole lot 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 means higher. It’s simply excess of what individuals usually consider as a automotive firm.

And Tesla can be the chief in real-world AI. So there’s actually… this can be a massive deal. Tesla is forward of Google, Meta, anybody on actual world software program. Truly taking in video and making choices based mostly 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 price noting that Tesla is definitely fairly good at chip design. So the the AI inference chip that was designed by Tesla, that’s in vehicles, we had kind of our {Hardware} 3 AI inference, vehicles 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 lots respect for Nvidia, or from any firm that we would like to place in our automotive, that’s higher than what we now have within the automotive.

We began from scratch in chip design, simply as we began from scratch in AI software program, and we now have one of the best real-world AI software program, and one of the best AI inference chip on this planet from nothing. So this can be a massive deal.

And the the potential of the chips within the automotive is dramatic. Proper now, all of the vehicles 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 kind of coaching cluster that we’re constructing on the south aspect of the Gigafactory.

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

However the whole lot you’re seeing to date is simply {Hardware} 3, and we nonetheless have an extended technique to go earlier than we attain the bounds 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 occasions higher. Then {Hardware} 5, which comes out in about 18 months or so, is 10 occasions extra succesful than {Hardware} 4. It’s like a, if Nvidia {hardware}, it’s kind of a B200-class pc.

So what we’ll simply progressively do is enhance what number of nines of reliability the automotive will get, after which after all that may go into Optimus as effectively, so the identical chip will go into—{Hardware} 4 will go into, is in Optimus—{Hardware}, AI 5, which shall be switching from {Hardware} 5 to AI 5, shall be in Optimus and in all vehicles 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 for those who’re in a cellular software like a humanoid robotic or a automotive, you’ll be able to’t simply be sucking down 10 kW, like you’ll be able to in a knowledge middle. So that you’ve acquired to be very energy environment friendly.

So {Hardware} 3 and 4 are just a few hundred watts. It’s exhausting. The {Hardware} 5 will have the ability to go in all probability as much as about 700 or 800 watts, but it surely’ll energy fluctuate contingent upon the complexity of the scene that it’s in. So whether it is in a car parking zone stationary, , you don’t must assume very a lot. Similar to an individual, like for those who’re in an advanced visitors situation, you’ve acquired to assume much more than for those who’re simply cruising alongside on an empty street.

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

As a result of for those who’ve acquired 100 million automobiles with a kilowatt of environment friendly inference compute, you’ve acquired 100 gigawatts of compute. Like 100 gigawatts of compute is lots, and it’s distributed all around the world.

So when the automotive will not be in autonomous mode, which I believe in all probability is, doing Robotaxi work possibly 50-60 hours every week, however about 100 hours every 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 should always use. Why not?

You already know, when individuals checked out Amazon, which began out clearly as a web based bookseller, and it has grown to be like this unbelievable place the place you should buy something. After which Amazon Internet Providers, like they’ve acquired 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 %. In order that’s once they stated, “Effectively, let’s do Amazon Internet Providers.”

After which Amazon Internet Providers grew to become extra useful than your complete remainder of Amazon.

Anyway, I believe there’s there’s some form of alternative there, that’s fairly vital for Tesla down the street. Once more, no one’s actually factoring that in, however I believe that that truly shall be fairly vital.

We are also now not compute constrained for coaching, and I test in with the group and it’s like “Is there something we will do to enhance the tempo of progress with respect to coaching and inference?” And presently, that isn’t the limiting issue. Actually, 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 healthier than the opposite model, as a result of none of them are requiring any interventions.

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

And if it’s like in an city atmosphere, and the common pace is 20 miles an hour, I imply, our skilled check 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 can be like, “Sure, an intervention lastly.” It’s like attending to that time.

So that is the place really having a large fleet is extraordinarily essential, as a result of we will deploy a brand new FSD mannequin and run it in Shadow Mode and see how effectively it performs. Evaluate how the human drives the automotive 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 possibly, after which have the ability to assess by getting billions of miles in a short time with the large fleet.

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

After which after all, so we’re constructing one other coaching information middle, proper right here, which shall be devoted to {Hardware} 4 coaching. So we’ll bifurcate {Hardware} 3 and {Hardware} 4 coaching later this 12 months, we’ll hold enhancing {Hardware} 3, however we’re going to uncork the complete functionality of {Hardware} 4 as effectively. So yeah.

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

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

After which, as I discussed, the best way it’ll work for the present fleet is you’ll have the ability to add or subtract your automotive to the fleet as you’d like. And there will even be Tesla-owned vehicles, so it’ll be a mixture of like, Uber plus Airbnb.

However 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 acquired, I don’t know, 7 million, 10 million vehicles, finally tens of thousands and thousands of vehicles, that may do autonomous driving, and as an alternative of getting used 10 hours every week, can be utilized 50 or 60 hours every week.

So it’s fairly wild to only 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 frame, from somebody pretending to be a robotic dancing in a swimsuit, to a reasonably hodgepodge robotic, to a robotic that’s really doing helpful duties within the manufacturing unit right now. So we now have two Opimus robots in our Fremont manufacturing unit which are doing principally this job, which is take taking cells off the road and inserting them in a transport container.

We even have fairly just a few of those cruising round our places of work in Palo Alto. And I believe we’ve acquired one main {hardware} revision, which ought to be performed 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 check out the product, form of, as I say, kind of eat our personal pet food or no matter, the digital tools, that’s.

However I believe like subsequent 12 months, my prediction is subsequent 12 months we’ll have over over 1,000, possibly just a few 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 shall be radically higher. You’ll simply actually have the ability to discuss to it and say “Please do that job,” or “I’m going to point out you one thing, now do this the factor that I’m displaying you.”

And it’ll get to the purpose the place it might probably watch a video of one thing, like an individual, after which study simply by that video and do this job. So yeah.

So actually it’s gonna be fairly one thing. And I’m assured of the prediction that there shall be extra… just like the ratio of humanoid robots to people shall 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 a whole lot 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, the whole lot needed to be performed from scratch. We discovered that there’s principally nothing, there’s no provide chain.

So though there are numerous electrical motors made on this planet, there’s no provide chain for the sorts 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. Will probably be capable of play the piano. So it’s actually like “Wow.”

Now after all, like I stated, we have to ensure you don’t have the Terminator situation. That’s crucial. So security of the humanoid robotic shall 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 exhausting for a startup to, if not unimaginable, for a startup to duplicate that. However at Tesla, we now have the world’s greatest electrical engineering. I believe we’ve acquired the world’s greatest mechanical engineering for for gearboxes and for electrical motors, energy electronics. So we now have the sources to do this and it applies fairly effectively.

And then you definitely additionally must have the mind. You want a power-efficient inference pc, which we’ve acquired for the automotive and we’ll be utilizing in Optimus. You want one of the best in real-world AI, and Tesla has one of the best in real-world AI. So that you want all of those. You want a really robust hand of playing cards as a way to make a compelling robotic.

And then you definitely additionally have to be superb at scale manufacturing. So as a way to have the robotic not value like a whole bunch of 1000’s of {dollars}, as a way 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 essentially the most optimistic estimates that I’ve seen for Optimus, the Optimus optimist, I believe underaccount the magnitude of of what the robotic will have the ability to do. You already know, as I stated in the beginning of the presentation, I agree with the Ark Make investments evaluation that autonomous transport is known as kind of a $5 to $7 trillion market cap scenario. Optimus I believe is a $25… actually a $25 trillion market cap scenario.

Now, I don’t need 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 assume with that, we will go to Q&A. Oh, I assume we’ve acquired 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 reside in, and I wasn’t clear. Particularly, I used to be referring to what you’ve performed 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. Effectively I very a lot respect that. You need to say like, “Why was the First Modification so essential?” You already know, 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 totally 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 only the way forward for civilization. So, thanks.

 

Ronnie, Worker Shareholder: Hey Elon, my identify is Ronnie. I’m in your proper aspect. 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 improve take price for FSD? You already know, possibly bundle it with premium connectivity and future software program choices?

 

Elon Musk: I believe we undoubtedly need to encourage individuals to attempt FSD, and one of many issues that I believe in all probability is sensible, is that when we now have a big enchancment, each time we now have 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 rely, like way more miles between interventions. So I believe we’ll hold, kind of providing individuals free trials of FSD each time we make a big enchancment.

I’m sorry, yeah. Once 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’ll be able to afford to in all probability take your youngsters to Disneyland now. Is that the place you’re going?

 

Elon Musk: Effectively, and by the best way, it’s price 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 reduce and run, nor would I need to. However I’ve really been to Disneyland, Disneyworld many occasions with the children. It’s just a little powerful for me to go as of late with out inflicting a ruckus.

Possibly I ought to identical to, put on a Mickey Mouse outfit and simply go and faux 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 must have, as a way 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 vehicles with Full Self-Driving.

 

Elon Musk: Okay.

 

Justin (Bearded Tesla Man), Shareholder: Like, we’ve seen some firms 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 creating this know-how, and I’m simply questioning the place your thoughts is at on that.

 

Elon Musk: Yeah, effectively, we’re we do attempt to be very cautious with the deployment of FSD. And we do have a whole lot of vehicles so like, inevitably, when there are a whole lot of vehicles and also you’ve acquired billions of miles, you do have the legislation of huge numbers, the place “Okay, there’s a small probability of one thing dangerous occurring.” However while you have a look at the kind of safety-per-mile, as a result of we’ve acquired a whole lot of miles, it’s very clear that the safety-per-mile is healthier than human driving.

So, we will present that to regulators and clearly make our case of the general public and say like, “Truly, human driving will not be excellent.” 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: Positive. 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 respected firm on this planet in the future. We simply need to know when you’ve got any prediction when and what’s the inflection level.. once we can say that is the inflection level. Is it fixing the FSD, or is it like Optimus on-ground shall be that time, out of your perspective?

 

Elon Musk: Effectively, as I discussed earlier than, I believe it’s price 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 occasions what issues are right now, 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 assume. I’ve fastened my Tesla dependancy by placing vehicles 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 need to purchase one after they’ve tried it out. So I assume a pair questions.

When might we count on possibly the referral program to return again if it might 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 checklist. So the referral program… Yeah. I believe we’ll re-examine the referral program in all probability subsequent quarter.

It is extremely essential to kind of have a look at the, what’s the absolutely thought of value of a Tesla? So, with the referral program, it successfully will increase the worth of the automotive. So, , is the worth improve… What is healthier for the tip buyer: a slight worth improve 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 sensible. I believe some form of referral program does make sense.

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

Now that’s not possible, , right now, however I believe engaged on determining methods to make extra reasonably priced automobiles is admittedly 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 wouldn’t have sufficient cash to afford one. So we now have to make it reasonably priced. That’s important.

Thanks.

 

Hamza, Shareholder: Hey Elon, I simply wished to introduce myself. My identify is Hamza. To start 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 need to get the following mannequin and switch over.

As an 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 complicated for us to do that. It kind of provides a good bit of complexity to the gross sales course of, however yeah. And it’s powerful, as a result of we’ve acquired to earn income someway, so… You already know, switch is hard.

 

Shareholder, from the viewers: “Another quarter!”

 

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

 

Unknown Shareholder: Elon thanks for internet hosting us. When 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 respect 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 need to ensure you’re doing the whole lot to deal with 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: Effectively, thanks I respect the type 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 just a little loopy as of late. 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 lots, so I’m like, “Okay, I’m on the checklist,” .

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 have to be form of cautious.

Which isn’t nice as a result of it like forces me to be a bit extra kind of standoffish. So now, I’ve stopped signing issues as a result of that’d be a certain technique 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 desire to not be, but it surely appears sensible. Like John Lennon, who was like singing about like, “Hey, can’t all of us simply be good to one another?” After which he acquired shot, by one in all his followers.

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

So, anyway, I respect the type 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 wouldn’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, certain. Yeah, within the checklist of issues that will be like extra helpful than… like it might be good to do can be a fantastic HVAC system that may be very power-efficient and has like a built-in HEPA filter, and like take a whole lot of issues that we’ve discovered within the automotive and apply that to dwelling HVAC.

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

That might be a reasonably candy factor to do. Possibly we will mix that with the Powerwall or one thing. On the checklist of issues to do, that isn’t tremendous excessive, however it might be it might be cool to do this in the future.

 

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

 

Elon Musk: You’re welcome.

 

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

 

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 appears at Disney, all people appears at Cybertruck. And there’s a shaggy dog story for those who might 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 only get used to traces, and , it’s important to have a whole lot 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 are going to reduce the traces.’”

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

 

Elon Musk: Positive.

 

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 unit, possibly sometime sooner or later? Proper now, it’s capped at 12 years. Despite the fact that we now have referral rewards, it’s capped at 12 years. Would you enable the children to tour to the manufacturing unit? Possibly they’ll see the robots? Possibly you can also make it an occasion or one thing like that?

 

Elon Musk: Yeah, certain. Yeah possibly we will have like a… I’m at all times nervous youngsters’ security and stuff. In case a child like, goes working off into like, the robotic cell or one thing.

However yeah, we might I believe decrease the… possibly have like a extra restricted tour that permits youthful youngsters to go. Positive, we’ll do this.

 

Unknown Shareholder: Donald Trump has been a giant critic of electrical automobiles. However final week, he shocked us by saying he’s a giant fan of Tesla, and a giant fan of you. What did you inform him?

 

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

Truly, 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 already know, electrical vehicles, I believe are fairly good for the longer term. America’s the chief in electrical vehicles, . Purchase America and stuff.”

Oh, and I believe he really, a whole lot of his mates now have Teslas and so they all adore it, and he’s an enormous fan of the Cybertruck. So, I believe these could also be contributing components.

 

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

 

Elon Musk: Yeah, so there’s, I imply, clearly we need to ensure that if there’s no driver within the automotive, the likelihood of a extreme intervention is extraordinarily low. We we need to ensure that the automotive is extraordinarily cautious round weak 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, means decrease than somebody driving a automotive.

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

After which I believe we will in all probability remedy a whole lot of this stuff simply by , remoting into the automotive and form of like watching like a large RC automotive. 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 need to acknowledge Tesla Boomer Mama and Sawyer Merritt for all of the efforts they did to prepare the…

There’s an after social gathering, to have fun, at Lustre Pearl East for those who guys need to come and have fun all of the efforts for the neighborhood. Congratulations Elon. Thanks.

 

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

I believe as shareholders we’re most … are you able to inform us just a little bit extra, as a result of when it comes to affordability, which you additionally talked about as this big burden, these 4680s get manufacturing credit and likewise on the patron aspect, get massive credit as effectively. When you might scale that in order that we might produce full stage of Cybertrucks and likewise begin to put them again within the Y and the three, probably, it might enormously enhance affordability and be nice when it comes to scale.

 

Elon Musk: Positive. So attaining affordability is definitely at this level extra about the remainder of the automotive 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 just a few years in the price of of lithium-ion cells from suppliers, as a result of each automotive producer put in gigantic orders for battery packs, like big, big 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 % like went up loopy numbers.

So since then, suppliers, battery cell suppliers have elevated their provide, and the orders from different automotive producers have declined. So, I imply, it’s price noting that it’s powerful sledding on the market for EVs. You already know, 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 isn’t a straightforward market. To get the price of the automotive down it’s actually… the battery pack is a chunk of the puzzle, but it surely’s actually the whole lot else too. So I actually would describe like, making a automotive extra reasonably priced, it’s like Sport of Thrones however pennies. Sport of pennies.

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

Now, with respect to our personal cell manufacturing, we do see a path to value parity by the tip of this 12 months. A really tough path to value parity. At the moment, 4680s value greater than our suppliers. Now, they value greater than the suppliers right now, 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 form of like for DRAM chips. Like, the DRAM business goes from like, over provide to underneath provide. The worth of DRAM adjustments like loopy.

It’s form of like that for cells. So we count on to realize value parity with even the a lot decrease provider promote worth right now, by the tip of the 12 months.

 

Unknown Shareholder: Hello, Mr. Musk. I’ve been a long-term investor since 2012. I voted in 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 mates all around 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 have the ability to certify it for different markets someday subsequent 12 months. However like for certain this 12 months, it’s simply North America.

We did design the automotive to North American necessities, as a result of for those who begin going with a superset of all worldwide necessities, it forces a whole lot of constraints on the Cybertruck that will make the product, frankly, worse.

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

However 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 a whole lot 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 occasions more durable to go from, , prototype to manufacturing is 100 occasions more durable, after which when you attain manufacturing, to enhance the worth by 20 %, like, the price of items by 20 %, is more durable 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 a whole lot of dishes right here. Prefer it’s tremendous enjoyable to make prototypes. That’s actually enjoyable and it’s form 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 exhausting work.

You already know, there’s some reward to it. Just like the kind of a reward to washing the dishes, I assume. You will have clear dishes. However that could be a powerful… so, that’s actual exhausting work.

 

Unknown Shareholder: I simply must say that there’s been a extremely massive reception, like I’ve mates 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 might have loads of demand in different elements of the world for Cybertruck. No query. Like wherever it goes anyplace on this planet, it will get an enormous crowd.

So it’s not a requirement factor, it’s actually we’ve acquired to achieve quantity manufacturing, undergo the price grind. It will be tough to overstate the issue in the price grind. It’s actually intense. After which we’ve acquired to recertify the automotive, which incorporates making some design adjustments for it to fulfill, to be compliant in different markets.

 

Unknown Shareholder: Good afternoon, Elon. I like your footwear. I don’t know if all people else can see them on the market. Cybertruck. Yeah. My query was, regarding the Basis Sequence, do you guys have a sure quantity that you’re planning on making or a timeline of when the non-Basis Sequence 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 Sequence 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 a whole lot of questions on the quarterly investor calls. And I wished to ask you, are you able to give just a little bit extra coloration on the neural internet scaling legal guidelines that you simply’re seeing as you’re coaching FSD? Like how a lot information, how far more inference compute, how far 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 presently amassing? Thanks.

 

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

And yeah, it’s worthwhile to 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 will have petabytes of video coming in. And even for, say, for a giant Nvidia cluster, it’s really actually exhausting to make a giant 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 a giant buying and selling cluster to function in any respect, after which to function with excessive uptime.

With respect to love the varied 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 best way 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 anyplace 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 get rid of kind 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 will have a big enchancment in miles between interventions.

Then you definitely get into courses of dynamic objects which are in several courses and completely different, issues can get clearly very sophisticated. When you’ve acquired a fancy intersection with visitors lights in all places, and like someone bumped the one visitors mild, and now it’s pointing within the incorrect path, or the visitors mild’s damaged, and there’s somebody who will not be obeying the visitors legal guidelines as a result of they’re simply working a crimson or they acquired confused about visitors mild. So that you get these very complicated conditions which are a lot more durable to unravel.

After which, like I used to be saying earlier, it really will get, because the system will get higher, it will get more durable to determine which AI mannequin is healthier, 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 healthier. And while you make these completely different AI fashions, they’re clearly not like tremendous deterministic, so we now have a brand new mannequin that eliminates one downside however creates one other downside. So we’re making an attempt to unravel this by a mixture of simulation, importing fashions, having them run in Shadow Mode.

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

So since we’ve acquired, , thousands and thousands of vehicles that we will do that with, that offers us a delta between what the AI mannequin predicted would do and the consumer would do. And for those who form of sum up the errors between them, you’ll be able to see “Oh, there was an even bigger error stack from this mannequin versus that mannequin,” while you uploaded them into, every uploaded them into 100,000 vehicles.

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 healthier or not. Like there have been kind of explicit intersections which are tough. And so if we simply, like all of the fashions shall 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 sophisticated…

So we’ve recognized a number of thousand intersections in america the place we’ll really take the brand new mannequin and take a look at the automotive in these very tough intersections. Just like the, , the kind of well-known like “Chuck’s left flip.” So for those who think about Chuck’s left flip—hey Chuck. I ponder what the neighbors assume.

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

After which as I discussed, as we’ve but to uncork any of the power 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 high of the present Tesla robotics capabilities? And likewise, in that case, will Optimus have any form of persona? And would that be one thing that the tip consumer would possibly have the ability 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 can have tremendous useful humanoid assist robots. And yeah, you’ll have the ability to customise the persona, customise the voice. And actually, the robotic will form of get to know you as effectively, and get to know your preferences. You gained’t even must say issues as a result of it’ll simply form 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, kind of, to not have your C-3PO and R2-D2.

 

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

 

Elon Musk: Effectively, I believe for those who quick ahead just a few years, it actually shall 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 selected job, we now have to form of do a good bit of coaching to unravel that job.

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

And these primitives are then generalized to something. So you’ll be able to say “Choose up a cup, decide up a shirt, fold the shirt.” These this stuff will generalize fairly rapidly.

So I count on in all probability not subsequent 12 months, however like in 2026, it’s actually the form of factor the place you may inform it to do form of a variety of duties, together with duties the place it has not particularly performed that precise factor earlier than. In all probability, 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 lots less complicated, or cheaper?

 

Elon Musk: We’re gonna deal with making only a incredible humanoid robotic at scale, and actually attaining scale economies and constructing that humanoid robotic. At very excessive quantity, for those who’re actually good at manufacturing, you may get the price of virtually something right down to its constituent components.

Basically, the burden and for those who simply have a look at the burden of the uncooked supplies occasions 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: Top-of-the-line issues in regards to the current certifying of your compensation package deal was listening to all of the optimistic suggestions of present and former staff to what you will have contributed to Tesla. Within the unlucky occasion that you simply’re hit by a automotive, not Full Self-Driving, can you are taking a couple of minutes or just a few 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: Effectively, 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 for those who’re forward or not forward, lots. What issues will not be innovation, however the price of innovation. Are you able to do in a single 12 months what different firms do in two years or three years? So in all probability my largest, most useful factor is as innovation accelerant.

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

As a result of if that’s not the case, then they may 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 respect the assist of present and former Tesla staff, 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 in your Starship, or for the Starship program and the whole lot 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 automotive tenting for Teslas or electrical automobiles in any respect for those who’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 possibly have entry to a rest room facility or simply one thing easy like that. Simply one thing I wished to only put ahead, as a result of I do know that lots of people come into the park and are disenchanted they’ll’t keep so. Only a thought.

 

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

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

 

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

 

Elon Musk: Thanks.

 

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

 

Elon Musk: There’s sufficient lithium refining, for those who rely 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 will scale it up from there. I believe it’s fairly essential to watch out with geopolitical danger, and simply ensure that, in a worst-case scenario, that Tesla is okay. Alright.

That is the final query.

 

Nikhil, Shareholder: Hello, Elon, thanks. Congratulations for one more massive win. I’m Nikhil, I’m based mostly 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 know the way protected 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 can assist scale together with your assist and steering. And we’d like to have a follow-up dialog to debate extra particulars with you ways we will work collectively. Thanks.

 

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

 

Elon Musk: Okay, certain. Okay, certain, certain, certain, certain. You actually need to ask a query.

 

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

 

Elon Musk: I’m undecided how one can reply that query, precisely. However we’re targeted on enhancing FSD for certain.

I believe adoption shall be widespread when it’s actually working insanely effectively, and it’s driving like a five-star Uber driver, I believe adoption shall be shall 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? Positive.

 

Unknown Shareholder (strikes as much as mic): I shared this suggestion with one in all your FSD group, however I don’t know whether or not it reached you or not. Mainly, as FSD retains on enhancing, we aren’t fairly certain at what price it will likely be enhancing, the march of traces. And so a whole lot of kind of skeptic stays as to when you’ll be able to 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 automotive.

Okay. The concept is that you’d, individuals would go to your platform to order a rental automotive, and you’d ship that in a single day to the entrance of their driveway. After which, so the one time that the automotive can be driving and not using a individual is at night time with no one, and you may take as lengthy and also you drop within the entrance of the automotive, and after that it’s supervised. So that may get you to commercialization a lot sooner, far more assured. In order that’s my suggestion.

 

Elon Musk: Alright. Effectively, I respect the thought. I believe like I stated, the progress in FSD shall be actually superb. You’ll see with every successive model, like I stated, one of the simplest ways to think about 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 pattern 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 complicated conditions.

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

 

 

You possibly can watch the complete 2024 Annual Shareholder Assembly under.

 

What are your ideas? Did you notice 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