- v9 of software, talking about AutoPilot (Navigate On AutoPilot)
- Steve Bannon talks about AutoPilot HW progress (validation, production line), ready by end Q1 2019; same cost as old hw but 10x improvement in frame rate
- removed Full Self Driving from ordering flow because it was confusing to user
- Karpathy says they trained larger NN that require new hw to work
- Q: cell supply constraints. A: they are expanding Panasonic cell supply, have 3rd party suppliers as well. They made half world-wide car batteries (20 GWh).
- Q: why better margins on Model 3. A: improvements all over the place
- Q: plan for total M3 production A: hoping for 1 million Model 3 world-wide
- Q: what are trade-ins for M3. A: all over the place but many upgrade from much cheaper car
- working on reducing time car build → delivered to 10 days (from 30 days in August, 20 days now). Terms with suppliers: over 60 days on average.
- average 4.3 k cars per week
- sold 56k Model 3, 70k all cars
- 20% gross margin on Model 3, targeting 25%
- ended up with 364 k (out of 455) reservations, less than 20% cancelled
- Going to Europe early 2019
- 4 new stores and service locations, 351 locations worldwide
- mobile service fleet: 373 cars
- opened several body shops in US, planning dozens more in next few quarters
- 44 new supercharger locations, total 1352 stations, 11k connectors and over 20k Destination Chargers globally
- energy storage: 239 MWh (18% from Q2, 118% from Q3 2017), on track to 3x 2017 numbers, 17.2% gross margin (up from 11.8% Q2)
- Solar Roof delayed, targeting first half 2019 to increase production
- lowered cost of user acquisition costs for solar leads to better profitability
- $52m ZEV credits (was 0 in Q2)
Survey of 1600 users of Zap-Map
Tesla: 93% very satisfied, 3% somewhat satisfied, 4% not satisfied
InstaVolt: 65% very satisfied, 22% somewhat satisfied, 12% not satisfied
Pod Point: 50% very satisfied, 32% somewhat satisfied, 18% not satisfied
- 500 cars a day (3.5k a week, 15k a month)
- prediction: 5k/week end of June
- model 3 outsells mercedes c-class, bmw 3-series, audi a4, https://twitter.com/Tesla/status/1004118655230078977
- prediction: base model end of 2018
- reliability of model 3 improved 5x
- worker safety 6% below industry average, shooting for 50% below industry average
- ~10k superchargers world-wide
- prediction: supercharger v3 starts deploying end of 2018
- will accelerate supercharger expansion when v3 is ready
- installed 1GW of energy storage in Tesla lifetime
- prediction: plans to install 1GW next year
- prediction: plans to double installations every year
- prediction: next quarter plans to build more car batteries than all other factories combined (including china)
- prediction: exponential growth of solar roofs
- prediction: expect positive GAAP income and cash flow in Q3 and Q4
- no plans to raise money
- prediction: unveil Model Y March 2019, production: June 2020
- doubling-down on manufacturing as competitive strength
- prediction: on cell level less than $100 kWh by end 2018 (depends on commodity prices)
- prediction: less than $100 kWh on a battery pack level in 2 years (by June 2020)
- plans to build out gigafactory for 4-5 years
- close to announcing china gigafactory which will combine car/battery/powertrain production, in Shanghai
- will announce European factory by end of 2018, 10-12 factories world-wide in the future
- will improve Tesla Semi design
- will recycle batteries
- works with insurance companies to get insurance 20-30% lower than BWM 3, working on improving repair cost
- free trial for Autopilot
- making rapid progress on Autopilot software (including new release this week); expects exponential improvements
- model 3 test drives starting end of 07 2018
- doubling service centers every year
- creating Tesla body shop repairs locations; top 10 metro location by end of month
- compact car in less than 5 years
- lease on Model 3 end of 2018 / beginning of 2019
- talking about virtual plant in Australia that uses 50k PowerPacks; about projects in Puerto Rico
- prediction: can improve charging time 3-4x (that would be 150kW*4 ~= 600kW)
- prediction: 30-40% improvement in battery density in 2-3 year, 6-8 years to double
- all-wheel drive production starting this month, scale up in July-August, high-volume production in September
- defends not using lidar
- plans to have the same profit margin in storage business as in car business, ~20-30%
- no motorcycles (because Musk almost got killed once)
Autopilot: Stuart: autopilot v9 (auto on-ramp, off-ramp), integrated with navigation. More safety features. Karpathy: leads vision team, neural networks. Pete Bannon: hardware v3 is working to speed up running neural networks. Claims 10x speed improvement over previous hardware (2000 fps vs. 200 fps at the same cost).
Q: what improved gross margins? A: spinning up production lines has issues and it takes time to debug and optimize production process.
Unexpectedly more orders for high-perf version.
Most frequent trade-ins for Model 3: Toyota Prius, BMW 3, Honda Accord, Honda Civic, Nissan Leaf.
Q: gigafactory 3 in China, how much will it cost? A: less than half of Giga 1 capex, $2 billion for ~200k. They are finding ways to improve production and make more with same capex.
Q: capital spending, how will fund? A: will not be raising equity. For china loan from local banks. There is no notice from regulators that prevent them raising equity.
Q: self-driving can be used as military-grade weapon. Concerns about regulation in China? Didn't come up.
Q: who is bigger competitor: BMW or Amazon? Not Amazon. Praising BMW.
Q: detailed question about margins. A: somewhat generic answer.
Q: what's holding back coast-to-coast fully autonomous ride. A: could do it in a limited fashion. Focusing on safety and improving basics like recognizing traffic lights etc.
Q: how to better sell Autopilot. A: agrees it would be good.
Q: Is GA4 permanent, is it a model for the future? A: permanent for now. Good because flexible. Also talks about simplifying manufacturing and Model Y.
Q: what average transaction in the future? A: Reiterating target of 25% margin on Model 3
Q: another question about manufacturing. A: a lot of manufacturing is software and Tesla is better at software. Anti-outsourcing lesson.
Q: how close to cash positive. A: re-iterating cash-flow positive and GAAP positive in Q3.
Q: still planning 1 million in 2020. A: aiming for a million, somewhere between 500k and 1 million, maybe 750k.
Q: where will they make Model Y A: not made a decision yet, maybe will announce this year. Hoping to announce European Gigafactory.
Q: how much Model 3 sales pull from other cars? A: no details other the above top 5. Expects battery production to be limiting factor. Not enough cells for PowerWall production.
Q: will have reservations for Model Y? A: no decision yet.
Q: technical details on production. A: Currently body production is a bottleneck.
Q: will Giga 1 produce cars? Technology in Semi. A: No comment about production. Semi will re-use some Model 3 production.
Q: car vs. energy production allocation. A: Makes sense to prioritize Model 3. Still, growth in storage is 300% this year, going for 3-4x in 2019.
Q: comment about new strategy of being profitable A: getting to scale that can't spend money efficiently.