Tesla Q1 2025 earnings call 22 апреля 2025 г. Вебтрансляция финансовых результатов Tesla за Q1 2025 — подготовленные выступления Илона Маска и руководства, затем трансляция вопросов аналитиков и розничных акционеров.
Вебтрансляция финансовых результатов Tesla за Q1 2025 — подготовленные выступления Илона Маска и руководства, затем трансляция вопросов аналитиков и розничных акционеров.
Расшифровка Good afternoon everyone and welcome to Tesla's first quarter 2025 Q&A webcast. My name is Travis Axelrod, Head of Investor Relations and I'm joined today by Elon Musk, Devotaneja and a number of other executives. Our Q1 results were announced at about 3pm Central Time in the Update deck he published at the same link as this webcast. During this call we will discuss our business outlook and make forward looking statements. These comments are based on our predictions and expectations. As of today, actual events or results could differ materially to a number due to a number of risks and uncertainties, including those mentioned in our most recent filings with the sec. During the question and answer portion of today's call, please limit yourself to one question and one follow up. Please use the raise hand button to join the question queue. Before we jump into Q and A, Elon will be providing an update.
Elon hello everyone. Well, it's never a dull moment these days. One thanks for sure. Every day is going to be exciting. As some people know, there's been some blowback for the time that I've been spending in government with the Department of Government Efficiency or doge. I think the work that we're doing there is actually very important for trying to rein in the insane deficit that is leading our country, United States, to destruction. And the DOGE team has made a lot of progress in addressing waste and fraud. The natural blowback from that is those who were receiving the wasteful dollars and the fraudulent dollars will try to attack me and those team and anything associated with me. So but then I'm really left with two choices. Should we just let the waste and fraud continue and always continuing at it, to grow at a really unsustainable pace that was bankrupting the country, or to fight the waste and fraud and try to get the country back on the right track. And I believe the right thing to do is to justify the ways and forward and get the country back on the right track and working together with President Trump and his administration. Because if the ship of America goes down, we all go down with it, including Tesla and everyone else. So I think this is critical work. Now the purchase that you'll see out there, they're very organized, they're paid for. They're obviously not going to say admit that the reason that they're protesting is because they're receiving fraudulent money or that they're the recipients of wasteful largesse, but they're going to come up with some other reason. But that is the real reason for the protests. The actual reason is that those receiving the waste and fraud wish to continue receiving it. That is the real thing that's going on here, obviously. So now that said, I do think there's, you know, that the. But the large slug of work necessary to get the Doge team in place and working in the government to get the financial house in order is mostly done. And I think. Starting probably in next month, May, my time allocation to Doge will drop significantly. I'll have to continue doing it for. I think we've played the remainder of the President's term just to make sure that the waste and fraud that we stop does not come roaring back, which we'll do if, if it has the chance. So, so I think I'll continue to spend a day or two per week
government matters for as long as the President would like me to do so, and as long as it is useful. But starting next month, I'll be allocating far more of my time to Tesla. And now that the, the major work of establishing the Department of Government Efficiency has done so, it tells that we've gone through many, many a crisis over the years and actually been through many near death, many near death experiences. We probably were on the ragged edge of death at least maybe a dozen times. It's been so many times. This is not one of those times. We're not on the ragged edge of death, not even close. So, but you know, there are some challenges and I expect that this year will be, there'll probably be some unexpected bumps this year, but I remain extremely optimistic about the future of the company. The future of the company is fundamentally based on large scale autonomous cars and large scale, vast numbers of autonomous humanoid robots. So
the value of a company that makes truly useful autonomous humanoid robots and autonomous, useful vehicles at scale, at low cost, which is what Tesla is going to do, is staggering. I continue to believe that Tesla, with excellent execution, will be the most valuable company in the world by far. That's an important if we must execute well. But if we do execute well,
think Tesla will be the most valuable company in the world by far. It may be as valuable as the next five companies combined. So. There'll be a few bumps along the road before that happens. I said, I think on the last earnings call that, you know, we'll start
the prosperity of autonomy take effect in a material way around the middle of next year. We still expect, we expect to have used to be selling fully autonomous rights in June in Austin. As we've been saying for now several months, so that's continued. But the real question from financial standpoint is when does it really become material and affect the bottom line of the company and start to be a fundamental part of the. When does it move the financial needle in a significant way? That's probably around the middle of next year, second half of next year. And then once it does start to move the national needle in a significant way, it will really go exponential from there. So that's, I'd encourage people to look beyond like the, you know, Sort of bumps and potholes of the road immediately ahead of us, but lift your gaze to the bright shining, you know, citadel on a hill, I don't know, some Reagan esque imagery. And that's where we're headed and not too distant future, like I said, in the next year type of thing.
Let's see, with respect to supply chain risk, something that, something that Tesla has been working on for several years is to localize supply chains does actually make sense from a cost standpoint and from a logistics risk standpoint is, is to have, have the supply chains be at least located on the continent in which the car is built. And so we are, I think the least accompanied, the least affected car company with respect to tariffs, at least in most respects. I mean, remains to be seen. Now tariffs are still, you know, tough on a company when margins are still low. But we do have localized supply chains in North America, Europe and China.
that puts us in a stronger position than any of our competitors. And undoubtedly I'm going to get a lot of questions about tariffs. And I just want to emphasize that the tariff decision is entirely up to the President of the United States. I will weigh in with my advice with the President, which he will listen to my advice. But then it's up to him, of course, to make his decision. I've been on the record many times as saying that I believe lower tariffs are generally a good idea for prosperity. But this decision is fundamentally up to the elected representative of the people being the President of the United States. So, you know, I'll continue to advocate
lower tariffs rather than higher tariffs, but that's all I can do. Now let me walk you through why I'm so excited about the future of Tesla. So first of all, autonomy. The team and I are laser focused on bringing Robotaxi to Austin in June. Unsupervised autonomy will first be solved
the Model Y in Austin and then actually we should parse out the terms robotic taxi or robo taxi and just generally like what's The Cybercap, because we've got a product called the Cybercap. And then. But any, any Tesla which could be an S3X or Y that is autonomous is a robotic taxi or robo taxi. It's very confusing. So the vast majority of the Tesla fleet that we've made is capable of being a robotaxi robotic taxi. And as we're going from
can make the whole the system work where you can have paid rides fully autonomously with no one in the car in one city, that is a very scalable thing for us to go broadly within whatever jurisdiction allows us to operate. So because what we're solving for is a general solution to autonomy, not a city specific solution for autonomy, once we make it work in a few cities, we can basically make it work in all cities in that legal jurisdiction. So if it's once we can make it Facebook work in a few cities in America, we can make work anywhere
wants to make work in a few cities. In China can work anywhere in China, likewise in Europe, limited only by regulatory approvals. So this is the advantage of having a generalized solution using artificial intelligence and an AI chip that Tesla design specifically for this purpose, as opposed to very expensive sensors and high precision maps of a particular neighborhood, where that neighborhood may change or often changes, and then that cost stops working. So a general solution, set up a specific solution.
regard to Optimus, making good progress in Optimus, we expect to have thousands of Optimus robots working in Tesla factories by the end of this year doing this forward. And we expect to scale Optimus up faster than any product, I think in
to get to millions of units per year as soon as possible. I think feel confident in getting to a million units per year in less than five years, maybe four years.
2030, I feel confident in predicting a million Optimus units per year. It might be 2029. So let's see. With respect to energy, our energy business is doing very well. The Megapack. Enables utility companies to output far more total energy than would otherwise be the case. When you think of the energy capability of a grid, it's much more than, say, total energy output per year. If the power plants could operate at peak power for all 24 hours, as opposed to being at half power, sometimes a quarter power at night, then you could double the energy output of existing power plants. But in order to do that, you need to buffer the energy so that you can charge up something like battery pack at night and then discharge into the grid during the day. So this is a massive unlock on total energy output of any given grid over the course of a year. And utility companies are beginning to realize this and are buying in our megapacks at scale. So at this point a gigawatt class battery is quite a common thing. So we have many orders in the hopper for gigawatt and beyond batteries and we expect the stationary energy storage business to scale ultimately to terawatts per year. So very, very big numbers. Now, Q1, you know, first quarters of a year are usually pretty tricky because it's usually the worst quarter of the year because people don't want to go buy a car in the middle of winter during a blizzard. So. So we picked Q1 as a good quarter to do a cutover to the new version of the Model Y and we changed production of the world's best selling cars. Worth remembering, the Model Y is the best selling car of any kind on earth with a 1.1 billion unit per year output of a single model. And we did this changeover at the same time in factories all across the world. So congratulations to the Tesla team on an amazing job in pulling off what is a very difficult transition. So yeah, it's, it's really. That was very impressive work. So yeah, in conclusion, while there are many near term headwinds for us in the broader industry, the future for Tesla is brighter than ever. The value of the company is delivering sustainable abundance with our affordable AI powered robots. So this, this, I like this phrase, sustainable abundance role and you say like, what's the ideal future that you can imagine? That's what you'd want. You'd want abundance rule in a way that's sustainable, it's good for the environment. Basically this is a happy future. What's the happiest future you can imagine? One which that would be a future where there's sustainable abundance for all. Closest thing to heaven we can get on earth, basically. So thank you again to the Tesla team for all their efforts at the challenging time and look forward to continuing to lead the team to great success in the future. Great.
Thank you very much, Elon. Before we move on, Bebop has some opening remarks as well.
Thanks, Elon. As Elon mentioned in Q1, we achieved something which has never been undertaken in the automotive industry of updating all our factories for the best selling car in the world all at the same time. And this is, this people don't understand. This is not a small feat. We're not aware of anybody else being able to do the best selling car all at once within a quarter. And that to hitting all the timelines which we had established at the beginning. So big kudos to the team for making this happen. Additionally, we also hit record gross profit for energy storage business in the quarter. Now getting back into the business, there's been a lot of speculation as to the reasons for decline of our vehicle deliveries in the first quarter. We had previously guided that we will be updating all factories and this would lead to several weeks of lost production which did happen as planned. The ripple effect of the change is not having enough new Model Y available in most markets for people to see and experience till the last few weeks of the quarter. Additionally, the negative impact of vandalism and unwarranted hostility towards our brand and our people had an impact in certain markets. Despite this, we were able to sell out Legacy Model Y in us, China and a few other markets within the world. And again, you know, just so people understand, we were producing the Legacy Model Y till middle to end of February and we switched over and we were able to still sell out within that period. So again, big achievement for all the people at Tesla to make it happen. We've been extremely, we have a very, extremely competitive vehicle lineup which with most vehicles going through a recent update and add to that F advances in fsd, you have a personal chauffeur which can take you almost anywhere under supervision. There are numerous stories shared by customers ranging from how it has improved their daily commute, to providing mobility to customers with disabilities, to giving older customers the ability to travel comfortably and independently. Not only is FSD supervised safer than a human driver, but it is also improving the lives of individuals which be incent. And again, this is something you have to experience and anybody who has experienced just knows it. And you know, we've been doing a lot lately try and get those stories out at least on X so that people can see how other people have benefited from this. Now coming into some of the financial stuff. Auto margins declined sequentially primarily due to the reduction in the total number of deliveries, lower fixed cost absorption due to factory changeovers and lower regulatory credit reviews, offset by a slight increase in pricing due to the launch of new Model Y. Despite incentives which we had to sell Legacy Model Y, our energy storage business, like I said before, has achieved yet another milestone of great highest gross profit in the quarter. This was despite sequential decline in deployment. The importance of this business, as Ivan mentioned, is pretty profound, especially in this environment because you know, if in order for grids to work properly with the demands from AI and all this, you need some more stability and this is by far the simplest and best solution which we are aware of which can help do this and we've also developed certain unique solutions to help our customers to achieve this. Additionally, you know, on the Powerwall side we've been selling the new Powerwall 3 and you know it's been received with very good reception from customers and to the extent that we are currently supply constrained on services and other margins, they were slightly down sequentially primarily because of the pressure on our used car business and insurance business. Note that we continued our journey to improve profitability in our services and collision business through better labor productivity. As previously discussed, our operating expenses continue to increase sequentially primarily due to our AI related initiatives including Optimus and also cost of development for vehicle programs including cybercaps, semi and cheaper models. These expenses flow through R and D. We believe even in the current environment it is the right strategy making investments in these areas to position us for the long term. These increases were offset by decreases in CNA from changes in our worker flow program. Other income reduced significantly on a sequential basis. The primary reason was Bitcoin mark to market loss in Q1 versus gain in Q4 resulting in a 472 million drop. The remainder of the change is because of FX remeasurement. With the adoption of the new mark to market standard for Bitcoin we expect increased volatility in other income in addition to the FX utility. I know tariffs is the hottest topic which people talk about and it has various impacts to our business. As Elon mentioned, you know, on the vehicle business we've been on this journey of regionalization for years. Specifically in the US Model Y has been rated the most American model made car on cars.com Made in America index three years in a row. This is part of all the work which the team has been doing over the years and to the extent that today, you know, if you look at our vehicle lineup in US we're about approximately on a weighted average base is 85% USMCA compliant. So like Elon said, this definitely gives us a bigger edge as compared to other OEMs in terms of managing the tariffs. But we're not immune because when the Section 232 auto tariffs become effective in May, which includes Canada and Mexico and Canada and Mexico has been part of our regionalization strategy, they will have an impact on profitability. I know research modeling on this impact has been up about a couple of thousand giveaway, which is pretty much in line with what we've been forecasting. The impact of tariffs on the Energy business will be outsized. Since we source LFP battery cells from China, we're in the process of commissioning equipment for the local manufacturing of LFP battery cells in the us. However, the equipment which we have can only service a fraction of our total installed capacity applied later on. We've also been working on securing additional supply chain from non China based suppliers, but it will take time. Also note that you know Megafact, irrespective of all the impact on us from our energy, from tariffs on the energy business, we do have Megafactory China which just started operations in Q1 and that are that that should take care of our business. Outside of us. There's also an important impact of tariffs on our capital investments. I know this is going to sound counterintuitive since in order to onshore manufacturing or expand lines, we have to bring equipment from onshore to use because there is not that much capacity in the US and the current trade environment. You know, such equipment being brought in
is subject to the expenses bringing in from China right now.
Exactly. And, and the reality is that China has the basic one which has the most capacity to provide this. Our CAPEX guidance inclusive of model tariffs. Even with the optimization we've tried to do, it is forecasted to be still in excess of 10 billion this year. We're still evaluating what more to do on this one. To summarize, we have near term challenges in our business due to tariffs and band image. We think our strategy of providing the best product at a competitive price is going to be a winner and this is the reason we're still focused on bringing cheaper models to market soon with start of production still planned for June. Additionally, the advancement in FSD related features including pilot Robotaxi launch in Austin later this year should help create a new era of demand. I would like to thank everyone at Tesla and our customers.
Fantastic. Thank you very much. Now we will move on to investor questions. We will start with questions from sei.com first question is what are the highest grits, highest risk items on the critical path to Robotaxi launch and scaling?
Is that shock? Yeah, we got a shock of line, sure. Well just to buy the justambiguate the Cyber Cab from Robo Taxi once again. So the when will the the Teslas because the Teslas that will be fully autonomous in June in Austin are probably Model Y's. So that is that's currently on track to be able to do paid rides fully autonomously in Austin in June
and then to be in any other cities in the US by The end of this year, it's very difficult, it's difficult to predict the exact ramp sort of week by week, month by month, except that it will ramp up very quickly. So it's going to be like some, basically an S curve where spread decals predict the intermediate slope of, of the S curve, but you kind of know where the S curve is going to end up, which is the vast majority of the Tesla fleet being autonomous. So that's why I feel confident in predicting large scale autonomy around the middle of next year, certainly the second half next year, meaning I predict that there will be millions of Teslas operating autonomously, fully autonomously in the second half of next year. Yeah, It does seem increasingly likely that there will be a localized parameter set for, you know, like that, Especially for. Places that have say, very snowy weather, like say if you're in the Northeast or something like this. You can think of it, it's kind of like a human, like, you know, if you, you could be a very good driver in California, but are you going to be also a good driver in a blizzard in Manhattan? You're not going to be as good. So there is actually some value in you can still drive, but your probability of an accident is higher. So it's increasingly obvious that there's some value to having a localized set of parameters for different regions and localities. But this is the neistat category, it's not the required category. Again, it's really, the car is just very much like a human. It's digital neural nets and cameras and humans operate with biological neural nets and eyes and so the same strengths and weaknesses will be present or you know, a digital neural net and cameras versus a biological neural net. Nice. Ashok, you'd like to elaborate on that? Yeah.
Speaking to the location specific models, we still have a generalized approach and you can see that from, you know, deployment of FSD supervised in China, where there's very minimal data that's China specific, the models generalize quite well to completely different driving styles. That just like shows that the AA based solution that we have is the right one. Because you know, if you had gone down the previous rule based solutions or like more hard coded HD map based solutions, it would have taken like many, many years to get China to work. You can see those in the videos that people post online themselves. So the generalized solution that we are up pursuing is the right one that's going to scale well. And you can think of this like location specific parameters that Iran alluded to as a mixture of experts. And if you're sort of familiar with the AI models and Groq and others, they all use this mixture of experts to sort of like specialize the parameters to specific tasks while still being general. This makes the model use limited amount of compute to solve for the diversity of tasks that it has to solve. In terms of addressing the question that asks for what are the critical things that we need to get right. One thing I would like to note is validation. Self driving is a long tail problem where there can be a lot of edge cases that only happen very, very rarely. Currently we are driving around in Austin using our QA fleet, but then it's super rare to get interventions that are critical for robotaxi operation. And so you can go many days without getting any single intervention. So you can't easily know whether you are improving or regressing in your capacity. And we need to build out sophisticated simulations including neural network based video generation. That's all happening in the background to make sure that we deliver a safe product and we are able to measure our safety even though we can't just exceed by driving around the block or something like that.
I mean very basic terms. If we're seeing an accident every 10,000 miles, well then you have to drive 10,000 miles on average before you get an accident or an intervention. So it's like okay, now imagine, I mean we must be really,
be very wicked out by the sheer number of Teslas doing something in Austin right now. You're like, well it's going to look pretty bizarre.
Some people are chasing us away.
Yeah, there's just always a convoy of Teslas going, just going all over to Austin in circles. But yeah, I just can't emphasize this enough in order to get to figure out long tail things. If it's 1 in 10,000, let's say it's 1 in 20,000 miles or 1 in 30. You know, the average person drives 10,000 miles in a year. So now try to compress that test cycle into a matter of, you know, a few months. That means you need a lot of cars doing a lot of driving in order to compress that do in a, in a matter of a month what would normally take someone a year.
I would just also add that, you know, if you haven't looked at those videos coming out of China, people are
oh yeah, those videos are amazing.
Yeah, they're putting it to real test. I mean dark loads.
Frankly, I think the Chinese consumer might be the most manic consumer and I actually customers in China are awesome. They have a lot of fun with the cars. I saw one guy take a Tesla on autonomous tape on a narrow dirt road.
Across like a mountain. And I'm like still very brave person. And I said he's driving along on a road with no barriers where makes a mistake, he's going to plunge to his doom. But it worked.
Tesla Executive
And if the question was on cybercap itself, we're in bsample validation now.
Yeah, yeah, we should ask that question too.
Tesla Executive
Yeah. We have our first. Like big builds coming at the end of this quarter in Q2 and then you know, in the coming months we start to large scale, you know, installation of all the equipment in Giga, Texas with, you know, still on schedule for production next year.
Yeah. And I just want to also clarify because I think people don't understand. They think that there's no new building being built and where is Cybercap going?
Tesla Executive
Yeah, yeah, it's happening and people don't know it's happening upstairs. Not along the lines while we're still building the model Y's and cybertrucks every day.
Yeah, yeah. It's worth noting that the, you know, the Tesla Gigafactory in Austin is three times the size of the Pentagon.
Tesla Executive
Including the garden.
Yeah, yeah. Including the ground Zero garden. So you know, go visit the Pentagon like splitting used to look big, but then you won't.
Great, thank you very much. The next question is when will FSD unsupervised be available for personal use on personally owned cars.
Before the end of this year? Not necessarily. I say with within the U.S. like, like we do want to test like we're at Tesla, we're absolutely hardcore about safety. We go to great lengths to make the safest car in the world and have the lowest accidents per mile and so and fewest lives last. So we want to be very careful. So we want autonomy to be definitively safer than manual driving. So it's not enough that it just be as safe. It needs to be meaningfully safer than if it's cars manually driven. So and we want to confirm that there's not something. We just want to be cautious with the rollout. We don't want to jump in at the deep end with an army. So with that said, I think we should be able to have it work and several studies later this year for it for personal use. So you know, the asset test being you should be able to go can you go to sleep in your car and wake up at your destination? And I'm confident that will be available in many cities in the US by the end of this year.
Great, thank you very much. The next question is, is Tesla still on track for releasing more affordable models this year or will you be focusing on simplified versions to enhance affordability similar to the rear wheel drive cybertruck?
Tesla Executive
Yeah, we're still planning to release models this year. As with all launches, we're working through like the last minute issues that pop up. We're knocking them down one by one at this point. I would say that ramped, maybe might be a little slower than we had hoped initially, but there's nothing, you know, just kind of given that turmoil that exists in the industry right now. But, but there's nothing blocking us from starting production within the next, within the timeline laid out in the opening remarks. And I will say it's important to emphasize that as we've said all along, the full utilization of our factories is the primary goal for these new products. And so flexibility of what we can do within the form factor and you know, the, the design of it is really limited to what we can do on our existing lines rather than building new ones. But we've been targeting the low cost of ownership. Monthly payment is the biggest differentiator for our vehicles and that's why we're focused on bringing these new models with the lowest price to the market within the
constraints I just highlighted.
Great, thank you very much.
The next question is, does Tesla see Robo Taxi as a winner take most market? And as you approach the Austin launch, how do you expect to compare against Waymo's offering, especially regarding pricing, geofencing and regulatory flexibility?
Okay, the issue with Waymo's cars is they cost way more money. But that is the issue. You know, the costs are very expensive, made in low volume. Teslas are, I don't know, probably cost a quarter or 20% of what a Waymo costs and made in very high volume. So ironically, we're the ones that made the bet that a pure AI solution with cameras and audio, the car actually will listen for sirens. And that kind of thing is the right move. And Waymo decided that an expensive sensor suite was the way to go, even though Google's very good at AI sign running. And it is worth noting that Tesla's both an incredible AI software team and AI hardware chip design team from scratch didn't acquire anyone, we just built it.
yeah, it's really, I mean, I don't see anyone being able to compete with Tesla at present. I'm sure that'll change eventually, but at least as far as I'm Aware. I don't know, 99% market share or something.
Tesla Executive
Ridiculous.
90 something percent at least. I don't know, at least something might change. But if we have millions of cars deployed next year, and unless others have millions of cars deployed, unless we're blocked by regulatory situations, it won't be long. I mean, in a few years we'll have 10 million autonomous cars on the roads. Then, you know, can't count.
The other thing which people forget is like, we're not just developing the software solution, we are also manufacturing the cars.
And like, you know what, like Vemo has, they're taking cars then trying to
We don't do that. So that definitely gives us a big leg up. And like Elon said, we already have a big existing fleet which hopefully with the software update, could become autonomous soon.
With the software update, it will become autonomous. To be clear, the Model Y's that we're talking about in being autonomous in Austin in June are the Model Y's we make currently. There's no change to it.
I think people don't appreciate that the car which they can buy today, the car that they have or the car they have, is capable of these kind of things.
In fact, it does drive autonomously from the factory to the end of line, every car.
Yeah. Nowadays the Model Y's everything, right? Yes, exactly. It is input to use. It's doing useful work fully autonomously at the factories. As Ashok was mentioning, the cars drive themselves from end of line to where they're supposed to be picked up by a truck to be taken to a customer. And I'm confident also that later this year the first Model Y will drive itself all the way to the customer. So from our. From a factory in Austin and our one in here in Fremont, California,
confident that from both factories we'll be able to drive directly to a customer from the factory.
Tesla Executive
Cool. Delivery.
Literally goes from the end of line and drives himself to your house.
Tesla Executive
It's important to note in the factories we don't have dedicated lanes or anything. People are coming in and out every day, trucks delivering supplies, parts, construction, you
know, and people can film it. By the way, you can see this from the road. Like it's not covered exactly in this videos. People take videos online and anyone who wants to go see it can just drive past our Green one factory and see the autonomous cars driving themselves. And they drive themselves and they put themselves in the exact right spot to pick up.
Tesla Executive
Yeah, the logistics yard is right there in the open. Yeah, we don't move it again to another lane.
But they go, they go to a specific spot. Yeah, yeah. So that's just a routine like everyday thing that.
Thank you very much. The next question is, can you please provide an update on the unboxed method and how that is progressing?
Tesla Executive
Sure. It's progressing. Absolutely. As I mentioned just a minute ago, like it is the basis for our Cybercat manufacturing process. It's really what we changed in order to allow the low cost of production and also get the super high levels of automation. You know, really levels of automation that are sort of unheard of in the vehicle manufacturing scale. It's like not something that, you know, when you see it be produced, you'll think of in terms of like, wow, that's how the car has been built for 100 years. It's really something we've changed in the past year. We've been like focusing on a lot of key development areas like marrying these large sub assemblies together in a precise way, an accurate way. We've also de risked things like corrosion of uncoated aluminum structures, you know, the ceiling across the seams of the vehicle and when you marry assemble components. And we've even done early crash testing and proven that like, you know, it's, it's going to be just as safe as a real carbon build. And so like we're as I, you know, with all that combined, we kind
of go into the builds that we
Tesla Executive
have at the end of this quarter for the, for the Cybercat product and that's the next real big test of full scale, you know, integration of the unbox process. And yeah, that's kind of where we are. So you'll see them in testing, on the test roads in a couple months.
Although the line won't be upset at this rate initially. Initially. This is a revolutionary production system. I'm not sure what the right word is. Unboxing sounds like something like when you get your phone and you open it up. Yeah. You have like a pleasant experience when you take your phone out of the box. But. Which of course is nice. But this is much more revolutionary than that. This is a profound reimagining of how to make cars in the first place. No car is made like this anywhere in the world. The factory is the product as much as the car is the product. So it's really just the first principles approach to manufacturing that will ultimately allow us, I think, to. I'm trying to think I'm confident ultimately and allow us to achieve a cycle time, meaning a unit every five seconds or less of a single line.
Tesla Executive
And we want to incorporate some of these for testing into our existing production lines as well to those lines that retrieve already.
This is something I've been thinking about for a long time and I've sort of been thinking about this for a long time. And it's kind of, it's not a crazy thing like a car every five seconds may sound like it's coming out like bullets, but actually it's coming out at walking speed.
Tesla Executive
It's like a meter a second.
A meter a second. So this is like we're still far away from caring about the aerodynamic drag of the manufacturing line, you know, because you're, you're still at three miles an hour type of thing,
five seconds sounds crazy, but it's three miles an hour what we're talking about. So yeah, you can run away from it basically. But that's still by far the fastest line on Earth, you know, I don't know, it's like half hour, half order. Many like what's like guessing the line on Earth.
Tesla Executive
It's like about Shanghai phase two and
We're the fastest, right?
Tesla Executive
I think so.
We think, we think we're the fastest at 33 seconds. And I'm Shanghai factory. But this would be, you know, six times faster or seven times faster. So yeah, I mean it'll be slower than that at first. But the point is that like when you, when you fully optimize the design and operation of the next generation factory that we're building right now,
second cycle time or less is the design is capable of it, you know, so when you go through like a radical new architecture, you go from like being like an A. I mean I say like probably China in particular is an A plus on a moderately, you know, an advanced but still traditional car production system, sort of, they're really doing about as good as possibly as possible to do within a conventional scenario. So trying to get much below, you know, sort of below like 30 seconds, extremely difficult. But if not and you start getting into sort of impossible where you just, you have to be faster than a human could possibly move. So then the autonomous line, it really just needs to be robots moving really fast. And that's where you get to some five seconds. But we'll start off with getting a C in C, getting a C in a new architecture. But then the potential is there over time to move that up to an A plus within an A architecture.
Great, thank you very much. The next question is how is Tesla positioning itself to flexibly adapt to global economic risks in the form of terrorist political biases, etc.
As Elon said, you know, we've been
Tesla Executive
supply chain team for a while. We continue to mitigate global economic risks like tariffs and political biases by regionalizing parts supply near its factories in North America, Berlin and Shanghai. For example, in North America our high volume vehicle programs have over 85% North America content and Changa vehicles have over 95% local content. Berlin has similar levels of regionalization as North American when you exclude the battery and we are working on regionalizing the battery as well. This is a pre pandemic strategy that we accelerated post pandemic through supplier diversification, dual sourcing, vertical integration, advanced analytics and local partnerships to ensure supply chain resilience and production stability. Having said that, we are not 100% insulated and these tariff risks are higher on our low volume platforms than the high volume ones.
Yeah, there's no more vertically integrated car company than Tesla. I mean we're taking, we're the most vertically integrated car company since, you know, Henry Ford back in the day when they were doing mining iron and stuff and growing rubber trees. So like we're not growing rubber trees and mining iron yet, but we are. We have built a lithium refinery in South Texas and it's the biggest lithium refinery outside of China, I think. Is that right? Yeah, I think so once it's done. But it has its output potential. Would be the biggest lithium refinery and we've got space to expand it if we need to build more.
So and then we've got the cathode refinery in Austin next to, next to the gig factory. We're going to figure out what to do about the anode. This is an ongoing subject of discussion. Best, the best of all possible worlds would be figuring out how to have no anode. This anode, this part being no part, that's the dream of lithium batteries to be not have an anode. But either way we better have the anode, the cathode and the lithium and the electrolytes, the separator to make a cell. But you know, there's no other car company that is building lithium refineries and cathode refineries. We're ridiculously vertically integrated and that and thus our best position to protect against supply chain disruptions. Yeah, Lauren, you want to talk about the progress?
Tesla Executive
Yeah, certainly in ourselves. We've, you know, we've multi sourced every component. We have, you know, every part coming from at least two different countries margin which is.
And that we started this. The supply chain team and engineering team
Tesla Executive
worked together on this for the last couple of years to put that together. It's not something we did in a couple of months. This is years of work. So we're in a good position to
Tesla Executive
And the insourcing of lithium and cathode, they're the two most critical parts of the battery that's right in our backyard. And we're totally insulated from
Tesla Executive
Things be in operation once they're running.
We also make our own cells, by the way. So cell production, if you took. There's this, you know, this. You make the anode, the cathode, the lithium, the electrolyte separator, the can. And then you got to put all that together in the cell factory. And there are entire companies that all they do is produce cells, but they don't do the other stuff. They don't refine lithium or decathlon or, you know. So our cell production is going quite well. And I think we're
We're currently sort of the lowest cost per kilowatt hour.
Tesla Executive
Yeah. For all cells we purchase in North America. Yeah.
So it's all stocks. Yeah. So we have the lowest cost per kilowatt hour, all things considered. So the Tesla cell is the most competitive cell. Yeah. For a kilowatt hour, according to a car. If it's a Tesla cell, it's lower cost than it's a supplier cell.
Tesla Executive
Yeah, yeah. And the plan this year is to really build off that base. You know, getting to lowest cost is. It's. It's the hardest challenge for so many batteries. You know, it's relatively easy to build a flashy product that does one thing well. To build something at high volume and low cost is super difficult. And we're kind of using that as base to then build off and add performance in different areas for new products coming out.
Tesla Executive
yeah, I mean, to your last point, there's a. There's a lot of advantages for regionalization.
You know, the most important thing is
Tesla Executive
we're not tying up working capital for six to eight weeks on the ocean. If there's a design change, then everything that's in transit basically has to be scrapped. Secondly, port disruptions, as we saw during COVID can be very expensive because slight disconnects can shut down production. So then your only option is costly air expedite. It also gives us resilience and supply chain. If one region is down, we can bridge with others.
It's more to set up in the
Tesla Executive
beginning, but it's critical to have when the need arises. Having said that, it's unrealistic to assume 100% regionalization across the board for specialized areas such as semiconductors. In such cases, our team works very closely with our partners to ensure we have strategic banks in place and that disruption doesn't impact production while we stand up the regional manufacturing for that particular commodity. And you know, I'll say like on the rest of the vehicle, like Elon was talking about with cells, we're also heavily vertically integrated and import ingots, you know, internment castings, we recycle those and melt some. There's the same thing with plastics, but it doesn't mean we're not exposed. You know, we do have some areas where we use rare earth magnets, you know that. And we've been working for years to find alternative sources and bring those up as well as we have our induction machines. And as we've mentioned in the past, we're working on ferrite numbers for some time. So, like as Karn said, you know, with our heavy regionalization percentages, we're definitely like the lowest, you know, exposed to this, but we're not completely immune, as Baibal mentioned in his opening remarks.
Similarly related on the battery guide, does Tesla still have a battery supply constraint as noted on the Q4 call, and
does that change the tariffs? So this is Karen.
Tesla Executive
We've been working very hard to expand battery cell production in the US Both with vendors and what Bonnie mentioned earlier with the 4680 program. And we're also working on moving the upstream supply chain for battery cells in
the United States for several years.
Tesla Executive
That strategy is really starting to pay off now. As it stands right now, we're not constrained on battery cells for vehicles. The recent tariffs do pose some challenges to Tesla Energy like our CFO mentioned earlier, but it's something we've been anticipating and we should be able to resolve in a timely fashion. We actually have a plan in place
where isocating towards it.
Tesla Executive
We also have some other sourcing sources coming online to supplement the shortfall. And then of course, we have the LFP production that's happening in house. We have a slight disconnect of aligning the right cells with the right packs. So that's the little bit of puzzle that we have to solve internally. But as far as cells go, there's no shortage.
Great, thank you very much. The next question is, did Tesla experience any meaningful changes in order inflow rate in Q1 relating to all the rumors of brand damage.
Tesla Executive
So in Q1, as mentioned earlier, we took the best selling car over the last two years and ramped up all four of our global factories and in less than eight weeks we've already gone to the rate of our previous model Y's the factories. So just kudos again to the team for the great job there. And despite the economic strain and negative articles that In California in Q1, Tesla remained the best selling car, not just EV. And additionally we had a record number of test drives globally in Q1 as well. So interest remains high. And so right now we continue to see, you know, good interest still on vehicle.
Yeah, I mean Tesla is not immune to sort of the macro demand for cars.
when there is economic uncertainty, people generally want to pause on buying, doing a major capital purchase like a car. But as far as absent macro issues, we don't see any reduction in demand.
Tesla Executive
Correct. And that's where continued focus on affordability
and it's fundamental focus there. Yeah.
Fantastic. Thank you guys. The next question is regarding the Tesla Optimus pilot line. Could you confirm if it is currently operational? If so, what is the current production rate of Optimus spots per week? Additionally, how might the recent tariffs impact the scalability of this production line moving forward?
Optimus, I just want to emphasize Optimus is still very much a development program. It's not, it's not a, it's not a large volume production. That's fine. You know, this, this year, you know, we'll make a few that, you know, we do expect to make thousands of Optimus robots, but most of that production is going to be at the end of the year. So the, almost everything in Optimus is new. There's not like an existing supply chain for the motors, gearboxes, electronics, actuators. Really anything in the, in the, almost anything in the Optimus apart from the, the AI for Tesla, but Tesla AI computer which is the same as the one in the car. So when you have a new complex manufactured product, it'll move as fast as the slowest and least lucky component in the entire thing. And as a first order approximation, there's like 10, 10,000 unique things. So, so that's why that, that's why anyone here tells you they can predict with precision the production ramp of a truly new product is, doesn't know what they're talking about. It is literally impossible. So you go through this like series of constraints where it's like this part's limiting factor, now that part's limiting factor now this part's limiting factor and multiply that by a Thousand, basically. And then the rate of the production ramp is decided by how quickly you can solve each of those problems. Now, you know, Optimus was affected,
know, by the magnet issue from China, because the Optimus actuators in the arm do use permanent magnets. Now, Tesla as a whole does not need to use permanent magnets, but when something is volume constrained, like an arm of the robot, then you want to try to make the motors as small as possible. And then so we just did design in permanent magnet, permanent magnets for those motors, and those were affected by the supply chain, you know, by basically China requiring an export license to send out any rare earth magnets. So we're working through that with China. Hopefully we'll get a license to use the rare earth magnets. China wants some assurances that these are not used for military purposes, which obviously are not. They're just going into a humanoid robot. So it's not a weapon system. But that, that is an example of a challenge there. I'm confident we'll overcome these issues and we'll, by the end of this year have thousands of optimist robots. Great, thank you very much.
And the last question we already covered earlier, whether Robotaxi was still on track for this year. So with that, we can move on to analyst questions. The first question is going to come from Pierre at New Street. Pierre, please unmute yourself.
Tesla Executive
Hey, guys, can you hear me?
Yeah, that's great. I'm super excited to hear Robotaxi and
Tesla Executive
Optimus becoming the very tangible future for Tesla. But I have actually a question on the legacy. Not the legacy, but the current auto business.
And when I look back at the
Tesla Executive
ramp of Model 3 a few years ago, I really saw it as being
Tesla Executive
A new product, completely reinvented, very different user experience, vastly superior, impossible to match for traditional competitors. And for the iPhone, it resulted in the high end of the smartphone market quadrupling in size and actually Apple taking 60% market share. And so when you look at the Model 3 and the Model Y today, I think they are still like, really vastly superior to any other cars. And I wonder why they've taken about 15% of their addressable market and not more, actually. So another way to put it is why are there so many people still buying BMWs and Mercedes knowing that the Model 3 and the Model Y's are out there and, and available? And I wonder if you've, if you're trying to solve that really internally, if you understand why, you know, what are these auto buyers who are not buying a Model 3 or Model Y missing. And if you have ideas of things you could do to address that, maybe there is enormous value left on the table there. Yeah, that's what I'm wondering these days.
The reality is that in the future most people are not going to buy cars. So it's kind of what, you know, what one could sort of say, Look, I think 1, 2, continue with your, your phone metaphor. I mean, you can remember the days of the flip phones when there was, you know, 100 different flipboard designs. And, and I would, you know, the mistake that manufacturers made was to try to make many different variants of a flip phone, but which was a mistake they should have made. IPhone
Because obviously everyone's going to want a smartphone. But in the beginning of the, when, you know, the iPhone came out, I was like, wow, I can't believe these guys are not reacting as though this is death. But they didn't. They kept making variants of flip phones. Nokia, I think at one point was the most valuable company in the world, or close to it, but they kept making flip phones, you know, trying to find another market niche. Maybe somebody wants a phone of a different style, maybe this different color or whatever it is. Nope, they just want a super intelligent phone that can do everything. Just one. So. I said this many, I said this many years ago. In the future, in the not too distant future, buying a gasoline car that is not autonomous will be like riding a horse while using a flip phone. Some people still do it, but it's rare.
Great, thank you. The next question comes from Emmanuel Rosner at Wolf. Emmanuel, please unmute yourself.
Analyst
Great, thanks for taking my question. So, Ilan, the public version of the FSD software still has a decent amount of, I guess, intermittent human interventions that are required. So what's still required for the software on your end to get to a level where it doesn't need to be supervised? And I'm asking that in the context of obviously the June launch being in the next couple of months, what still needs to happen?
We are working on a number of items too. Yeah, we are aware of the interventions that are happening in the public bizarre. And that's why we are hardcore burning it down. And really speaking some initial launch city helps us focus on solving all the issues that you'd face here. For example, focusing on Austin. We are not solving all the issues that customers in Boston or somewhere else might face. Then here we just have big list of all the issues. Just burn it down. And that's what the team is working on along with other Sort of redundancy issues. For example, if one of the computers goes down, right down the customer fleet, it would throw the red hands and ask you to take over. But we don't want that kind of situation. So you're solving both like the reliability issues of the Autonomy software and also the reliability issues of the system software together for Austin.
Yeah, really just work through a long tail of unusual interventions. So and these are really very rare, like as a single intervention every 10,000 miles. I mean there's a lot of driving you got to do to even find one case where that happens.
And some interventions, systematic missing functionality. For example, for handling emergency vehicles correctly, you don't need to consume audio as an input. But then the customer facing versions don't have audio input. But the version that's in, that's going to be in Austin will have audio input and so on.
Analyst
Okay, but would you have like remote operators, for example,
every now and then if a car gets stuck or something, someone will like, you know, unblock it. But it's just because we are a bit conservative and tend towards more safety than even if we get stuck every now and then we do have remote support, but it's not going to be and required for safe operation. If anything, it's just required for more availability.
Anyway, it's only a couple months away, so you can just save for yourself in a couple months in Olson. Great.
Our next question comes from Edison at Deutsche Bank. Edison, please unmute yourself.
Analyst
Hi, thank you very much for the question. So I want to ask about the Optimus supply chain going forward. You mentioned very fast ramp up. What do you envision that supply chain looking like? Is it going to require many more suppliers to be in the US now because of the tariffs? How does one kind of think about what needs to happen there.
To see how things settle out? I don't know yet. I mean, so some things we're doing as we already talked about, which is that we're, we've already taken commercial steps to localize our supply chain. We're more localized than any other manufacturer and we have a lot of things underway that to increase the localization to reduce supply chain risk associated with geopolitical uncertainty. Did you have a follow up?
Analyst
Wanted to come back actually to the robo taxi then. Do you have a sense on how many cars or how big the scale will be initially and how that might ramp up? I know you're targeting millions of vehicles in the second half of next year, but initially at launch, how many vehicles would be reasonable and is it going to be as simple as if one goes to Austin, let's say in late June or July, you'll be able to request.
Yeah, we're still debating the exact number to start off on day one but it's I don't know, maybe 10 or 20 vehicles on day one. And watch it carefully then scale it up rapidly after that. So you know, we want to make sure that we're paying very close attention the first time this happens. But yeah, you will end of, end of June or July just go to Austin and order a Tesla or tonnes drive. Great.
The next question comes from George at Canaccord.
Analyst
Hi, thank you for taking my question. It has to do with FSD pricing. Can we envision when you launch unsupervised FSD that there could be sort of a multi tiered pricing approach to unsupervised versus supervised similar to what you did with autopilot versus FSD in the past.
This is something which we've been thinking about. I mean just so you know, for people who have been trying FSD and who've been using fsd, they think even the current pricing is too cheap because for 99 bucks basically getting a personal show.
Yeah, I mean we do need to give people more time to, if they want to look at like a key breakpoint is can you read your text messages or not?
Can you write a text message or not? Because obviously people are doing this by the way with unauthonized cars all the time. And if you just go over a drive down the highway and you'll see people texting while driving, you know, doing 80 miles an hour and putting the
Tesla Executive
makeup on at the same time.
Yeah, putting on makeup, doing their hair with the mirror down and texting and driving at 80 miles an hour. This is a concurrence. So people eating lunch, you name it, shaving. So anyway, but right now the car is very insistent that you pay attention to the road which reduces the value somewhat because it's very rigorous about you paying attention to the road. And we'll gradually lighten up on that with you know, every, every few weeks or every month we'll, we'll relax that a little bit, make a. So you can be more and more able to do things you want to do and not have the car demand your ranger's attention. So, so that that value, it'll really be profound when you can basically do whatever you want, including sleep. And then that $99 is going to seem like the best $99 you've ever spent in your life.
And George, do you have a follow up?
Analyst
My follow up is about geographic expansion. Just maybe discuss additional markets. There's been some news around India recently that you could launch this year and next.
Tesla Executive
Thank you.
So, yeah, I mean, we've been working on getting into India. India is a very hot market and especially the current. And I don't want to talk just about tariffs, but the current structure with India is that any car which we send in is subject to 70% tariff. Also like a 30%, you know, luxury tax on it. So, you know, the same car which we were sending is like 100% more expensive than what it is. So that creates a lot of, you know, anxiety is like, you know, people feel, okay, they're paying too much about the car. And by the way, we're not getting the money. The local government is getting the money. And that's why we've been very careful trying to figure out when is the right time. We, like I said, we are working on it. It's a great, it would be a great market to enter because India has a big middle class which we would want to tap in, and that is the market which we want to be in. But again, these kind of things create a little bit of tension which we're trying to work around.
Great, thank you so much. The next question comes from Adam Jonas at Morgan Stanley.
We can't hear you, Adam, so we'll put you back in the queue and we'll move to Colin Langen from Wells Fargo while Adam figures out his audio. Colin, please unmute yourself.
Tesla Executive
Oh, great. Do you hear me? Yes.
Analyst
Oh, great. You know, you're still sticking with the vision only approach. A lot of autonomous people still have a lot of concerns about, you know, sun glare, fog and dust, any color, on how you anticipate on getting around those issues. Because my understanding, it kind of blinds the camera when you get glare and stuff.
Actually, it does not blind the camera. We use a, an approach which is direct photon count. So when you see a processed image, so the image that goes from the sort of photon counter, the silicon photon counter, that goes through a digital signal processor or image signal processor. That's normally what happens. And then, then the image that you see looks all washed out. Because if it's, if you point the camera at the sun, the post processing of the photon counting washes things out. It actually adds noise. So quite a big breakthrough that we made some time ago was to go with direct photon counting and bypass the image signal processor and that and Then you can drive pretty much straight at the sun, and you can also see in what appears to be the blackest of night. And then here in fog, we can see as well as people can. Probably better, but I'd say probably slightly better than people, than the average person anyway.
Analyst
yeah, so the camera is able to see when there's direct glare on it.
I'm not surprised by that.
Analyst
And then just there were obviously media reports the other day that the affordable model was delayed. Doesn't sound like that's correct. Those reports also talked about it being more of a cheaper version of the Model Y. Any color on what we should expect is, is it a cheaper version of the Model Y, or is it actually going to be a design change with it?
So I think Lars already covered it in answering one of the say.com questions. The real thing which we are trying to focus on is affordability and using our existing lines. There's always limitations when you're using existing lines as to how many different form factors can you bring to. So that's the way I would say you should think about it. And I don't know if lar anything more to it.
Tesla Executive
Yeah, I think I said this before in other calls, like, you know, with the recent upgrades to the Model 3 and worldwide platforms, we made some pretty great cars at pretty great prices, and we added a bunch of features and things like that. I think it's easy to consider that, you know, moving forward, Tesla doesn't make bad cars, and we always make, you know, our intent is not to make a car that is any worse than any car we've ever produced in the past. And so the models that come out in the next months will. Will be built on our lines and will resemble in form and shape the cars we currently make. And. And, you know, but the key is that they'll be affordable and you'll be able to buy one.
We might have time for one last question. Adam, we'll try your audio again. You want to try to unmute yourself, Adam?
Tesla Executive
All right.
Unfortunately, still not working.
Analyst
Sorry, guys. Technology, go ahead. Yeah.
Analyst
In the February 28th Joe Rogan interview, Elon, you advocated for a rampant tariffs to give people time to adjust. Otherwise, quote, you said the system would break and bad things would happen. So are things breaking yet? And if the announced. As if the tariffs, as announced remain in place, when would things start breaking?
Well, at the risk of stating the obvious, I'm not. I'm not.
I'm one of Many advisors to the President. I'm not the President, so. And, but you know, I've made my opinion clear to the President and that, you know, and other people made their opinion clear to the President. He is there, he listens, he talks to many people and he makes his decision. And you know, I'm hopeful that President will observe whether my predictions are more accurate than the predictions of others and perhaps weigh my advice differently in the future. We shall see. But you know, I'm an advocate of, you know, predictable tab structures and generally I'm an advocate for free trade and lower tariffs. Now one does need to take a look at where if some country is doing something predatory with tariffs or is providing extreme support for, if a government is providing extreme financial support for a particular industry, then you have to do something to counteract that.
But I think that that's on a case by case basis strategically. But you know, the President is the elected representative of the people and fully within his rights to do what he would like to do.
Analyst
Okay, Elon, I respect that. Just, just as a follow up and thanks again between, between China and the United States, who in your opinion is further ahead on the development of physical AI, specifically on humanoids and, and also drones?
Analyst
And is it even close and kind of how I, I. Yeah, serious.
Well, I think you know the answer. I mean, yeah, You know, a friend of mine naval made this posted on X. I reposted it. I think a prophetic statement which is any country that cannot manufacture its own drones is doomed to be the vassal state of any country that can and we can't. America cannot currently manufacture its own drones. But that's again unfortunately. So China I believe manufactures about 70% of all drones. And if you look at the total supply chain, China is almost 100, almost 100% of drones are have a supply chain dependency on China. So China is in a very strong
and here in America and we need to shift more of our people and resources to manufacturing because this, this is gonna have a lot of respect for China because China is amazing actually. But United States, the United States should not have such a severe dependency on China for drones and be unable to make them unless China gives us the parts. Which is currently the situation. You know, with respect to humanoid robots. I don't think there's any company in any country that can match Tesla. Tesla and SpaceX are number one. So. And then now I'm a little concerned that on the leaderboard ranks two through ten will be Chinese companies. But I'm confident that rank one will be Tesla. Great.
Well, I think that's unfortunately all the time we have for today. We appreciate all your questions and look forward to talking to you next quarter. Thank you very much and goodbye.