← BackAugust 4, 2022Tesla Shareholder Meeting0:00 / 0:00CC1×YouTubeTesla Shareholder MeetingAugust 4, 2022Musk's full company-update presentation to shareholders at Tesla's 2022 annual meeting in Austin.Musk's full company-update presentation to shareholders at Tesla's 2022 annual meeting in Austin.TranscriptElon MuskWelcome.Well, I feel welcome, so. Well, it's great to see everyone here.Welcome.So yeah, welcome to Giga, Texas.All right, so let's see, I'll go over, kind of recount the year. It's been an amazing year. The Tesla team has done amazing work. And I have to say, like, one of the things that, like, what do you enjoy most in life? Really being able to work with a super talented group of people and, and manufacture those products and deliver them to people and make people happy from those products.That's one of the best things in life.So yeah, I'd just like to say what an honor it is to work with such a talented team at Tesla and that's the reason we've been able to do all these things. So, yeah, we are aiming to achieve a 2 million vehicle run rate by the end of the year.This is the best crowd. I mean, I mean, I love you guys too. So anyway, thanks to the hard work of the Tesla team, we've already been able to achieve one and a half million unit annualized run rates. And depending on how the rest of this year goes, we, I think we might get close to, or we'll get Approximately at the 1.5 million mark and be exiting the year at a 2 million unit run rate. And, and then also worth noting, just recently in the last few weeks, we made our three millionth car.So, You know, it's pretty wild to think like 10 years ago where things were, you know, 10 years August 2012, we'd made 2,500 roadsters and I think maybe a couple hundred model S's ish. But less than 3,000 cars. So 10 years ago we'd made less than 3,000 cars. And here we stand 10 years later having made over 3 million.And actually this is one of the cleanest exponentials I've. You know, it looks like one of those sort of, you know, business plan presentation things that doesn't actually come true. But you know, you see it in the venture capital business plan situation. But it's actually true. That's the amazing part. And yeah, Yeah, Yeah, we're doing okay on demand, so thank you.So, yeah, it's great here. I love California too, to be frank. I'll be clear.Oh, come on.We got great teams in California and we got a great team in China and Shanghai and a great team in Berlin and Germany and Europe.Yeah.And I thought it's interesting to look at the cumulative profitability since inception. And this approximately tracks to sort of mental pain, actually, This psychic damage that Green curve is approximately correct. But I'm just very proud of the fact that we've actually been able to produce more cash than we have spent and have positive retained earnings and be worth our salt, essentially. And that's a really big deal.It's very hard.I mean, this is a big deal and I think it's going to go up from here.So you can see we obviously had some challenges there in 2017 and then, but since then our free cash flow generation has been very good and trending upwards. And this is really before autonomy really kicks in. We have autonomy to some degree, but solving autonomy will really be an amplification of free cash flow to a degree that is, you know, you run the numbers and it's like, wow, can it really be that crazy? But it could be that crazy.And you know, this, this year, I swear.We got anyone here in the FSD beta program.Sweet. Yeah, no, totally, totally, totally. Okay, well, I thought, I thought.All right, I thought you might ask that. So, because it's 10.13 we've been working on for a while and, and actually what's sort of happened is we've made some pretty significant architectural improvements. So it's really going to be more than a 10.12 to 10.13 release. It might, I don't want to speak too soon. It might qualify for 10.69.So it's got to earn that, obviously. Can't just throw that out, you know, but it's, there's a lot of, a lot of improvements and especially in complex left turns and yeah, we're going to solve Chuck's turn. Yes, yes, 100%, Absolutely. You know, we have a lot of respect for valid criticism, so. And yeah, so I think we're at roughly 90% success rate with your turn. So, yeah, we're almost at 100. So it's looking good. And yeah, so I mean, I'm hopeful it might be a week next week.So, yeah, two weeks.Yeah, it's working well for me.So, yeah, teams like working literally seven days a week and making major improvements. And it's really interesting because we're effectively solving an important aspect of artificial intelligence, real world AI for self driving, which when you think about it, kind of is what's needed to solve the. To solve self driving. Because how is the road system designed? It's designed for a biological neural net and eyes. And so naturally the thing that would therefore work, the silicon analog is, is cameras and silicon neural nets.And so sort of, sort of by accident, we're actually solving an important, I think, very useful element of artificial intelligence. And I definitely want people out there, you know, talented people who are working on AI to consider working at Tesla, because I think we're solving just a very important part of AI and one that can ultimately save millions of lives and, and prevent tens of millions of serious injuries by driving just an order of magnitude safer than people.There used to be a time back in the day where we'd have, yeah, this is super important.There used to be a time when we'd have elevator operators and it was normal to have elevator operators and have like a big relay and stuff. But you know, every camp, every now and again you make a mistake and sure, somebody in half. So I'd be like, okay. Then we went to automated elevators and you press a button and you go to your floor and it just works. And, and that's kind of how it's going to be in the future with cars and.Yeah, so.And then we'll have lots of interesting things to say on AI day at the end of next month. So I'll leave that to next month. Yeah. So, you know, when we started out here, obviously we were told, we were told electric cars were impossible. And even if really, if you could make, you know, an electric car with a couple hundred miles range, then nobody would buy it anyway because people just love gasoline cars. So, you know, when we started out, it was, it was dumb, dumb to start a car company and then dumb square to do an electric car company.And we were told, you're never going to make money, et cetera. And we didn't for a while, but now we have the highest operating margin in the whole industry.Exactly, exactly. It says there's not just a car company. Tesla is many companies in one. And we're as much a software company as we are a hardware company. And that's really going to be obviously essential for the future. And software, both in the car and obviously with neural net training, but also software in the factory as well. So you can think of a factory as a giant cybernetic collective. So factory is just an enormous cybernetic collective of humans and machines and software.And the better the software is, the better that cybernetic collective works.I don't think other OEMs think like that, but that's what it is.So, you know, there's a lot of talk of competition among electric vehicles, but really the EVs are electric vehicles taking market share from gasoline cars. So.The.And from a Tesla standpoint, we obviously welcome this and we're very excited to see that the big car companies are embracing electric vehicles. If you were to rewind their press releases to five years ago, that was not the case. They were, you know, not saying nice things about electric vehicles five, five years ago. But now I believe almost every major car company in the world has embraced electrification and agrees that it is the right path.And this is really what we set out to do with Tesla. You know, it was not to like, you know, get maximum market share or anything. It was really try to get the, to show the auto industry that it was possible to go electric and that if you made compelling electric cars, people would buy them.And that's what's happened. And I think that's really profound.Also, when our competitors advertise for electric vehicles, every time they do that, our sales go up.It's pretty funny. So, yeah, but we do, we have open sourced all our patents so they can use our patents for free. And so we're, you know, helping out. And I think it's sort of a mutual prosperity thing and it's, it's good. So.Yeah, so Model Y definitely don't want to count chickens until they're hatched, but I think we're tracking to have Model Y be the highest selling vehicle by revenue this year and the highest by unit volume next year.Still a lot of work to do. Like these, these factories don't just magically work.So still a lot of work to do in Berlin and here in Austin to spool up these two gigafactories. And we've got different supply chains. And so it's always. There's a host of problems. None of the problems are individually all that difficult, but there's like 10,000 of them. So it's, the rate of production is like, how fast can you solve the 10,000 problems essentially? And we're solving pretty fast, but a lot of work to do.And we might be able to announce another factory location later this year.Wait, wait, wait, wait. Where should we, okay, where should we build it?Okay, we got a lot of Canadas.No, I'm half, I'm half Canadian, so maybe I should, you know, but yeah, well, I think, you know, ultimately we'll end up building, I don't know, probably at least 10 or 12, 10 or 12 gigafactories. And they will, there will be really gigafactories, like output, you know, aiming for output, average output of like 1 and a half to 2 million units per factory, which is enormous. So.And our Fremont factory in California is already the highest output factory In North America.Sorry.Well, I think we'll have a friendly competition between Texas, California, Berlin. Shanghai is hard to beat. I have to say. Shanghai is pretty. Our Shanghai team is just awesome. So they're.Yeah, great, great team there. So with respect to, you know, sometimes we get this sort of, you know, these bogus attacks of like EVs are somehow worse than gasoline cars, which is not true. The average life cycle emissions of an EV are dramatically lower than that of a gasoline car. I mean, kind of telling you things, know. But you know, every now and again you think surely this nonsense has been put to bed but pops up again.But it's obviously electric cars is dramatically lower CO2 lifetime than, than any. Than a, than a gasoline car. So anyway, that's kind of obvious now. Now this, this is a thing that I think is super cool. If you add up all the energy produced over the last 10 years by Tesla solar panels, it is more energy than was used to manufacture all of our cars and charge all of our cars at superchargers and at home.This is like, And I mean the mission of Tesla is to accelerate sustainability and I think this is really amazing. More energy produced than was used in making the car and charging them over billions of miles. And we're going to keep obviously increasing our solar activity and vehicles and try to keep these on par because the three elements of a sustainable energy future, sustainable energy production primarily with solar and wind.And then stationary battery packs to store the sustainable energy because of its wind and solar are intermittent. And then electric transport. And if you have those three pillars, you have a fully sustainable future. And yeah, so that's. Yeah.And obviously battery packs are various recyclable. They are, you can think of it like high grade or do you want to, you know, crunch up a bunch of rocks or crunch up a battery pack which is like super high grade ore. So it's a no brainer to recycle battery packs. And we are already recycling, I should point this out. So sometimes people wonder what's happening. We're already recycling at over 50 a week in Nevada. So Tesla battery recycling is already underway, has been underway and is scaling up now.Cars are lasting quite a long time, so there's not that many batteries to actually recycle because you kind of have to typically wait like 12 years or something like quite a long time before the battery actually is no longer useful, sometimes 15 years. So recycling starts off small, but then it becomes very significant long term.So some factory footage obviously.Just 50 packs a week. Yeah. So yeah, that's what I was saying. Like there's actually just not that many packs to recycle because there's not. The vast majority of them are still in use.Sorry.Oh yes, exactly. Where is that thing?So, so Mass Plan 3 is going to be fundamentally about scaling, just looking at the overall problem from a global macroeconomic standpoint and saying what, what are all the things that are needed to achieve a fully sustainable economy? Because I think a lot of people don't, don't know and really like what tonnage of lithium, of cathode, anode separator, electrolyte electronics. What are all the things that are needed that, what are all the things that need to be done in order to transition to a fully sustainable global economy?Which I think, you know, the sooner we do that the better for the planet. And I think just articulating that and just making it clear that this is absolutely doable and it is being done and we just want it to be done as fast as possible. Because I think a lot of times, I mean, I meet a lot of people out there who have lost hope.They think it's too late and they think there's no chance and the Earth is doomed. Is like. It's not doomed. Okay. Yeah, Yeah.Earth can and will be saved.Yeah.So in addition to battery advancements and electronics advancements in AI, we've also done a lot to simplify the structure of cars to make it easier to manufacture. And one of the things we've done is create the largest castings that have ever been done. And they're very complex castings. And so we're able to take 171 pieces of metal and go from 171 pieces to two and in the process make it lighter, stiffer, with better ride handling, better noise, vibration, harshness, better sealing against water.So it's really better in every way. And yeah, so, So, and we're going to keep enhancing the, the casting. So this is a testament to our materials team and to our casting technology. So really rethinking the whole way in which a car is made. And it's, yeah, it's a gigantic improvement we have at this point from going from say Model S or even Model 3. We're at about 30% of the robots used for Model 3 from a current Model Y.So yeah, We've also improved the layout of the factory. So the factory is sort of a, sort of a single, close to a single monolithic factory with a very straightforward flow.Fremont. We do a lot in Fremont, but the flow is complex and it's not an easy flow. So we're really rethinking the factory and I think the really long term sustainable advantage of Tesla will be manufacturing. I mentioned this before, but obviously everyone will have electric cars. All manufacturers will have electric cars and eventually take longer than they think. But eventually all cars will be self driving. And the thing that will be hardest to replicate is Tesla's manufacturing technology.So this is actually very important for a long term standpoint.You know, when thinking about the competitiveness of companies, especially if the companies are technology companies, I recommend looking at where the smartest engineers want to work. This is wherever the smartest engineers want to work. That's going to be that, that, that technology company is going to be the one that is likely to succeed. Just like if it's a pro sports team, where are the ace players going? Okay, probably that team will win.So we put a lot of effort into ensuring that the best engineers in the world want to work at Tesla. And frankly, sometimes Tesla's number one, sometimes SpaceX number one. But this is just like, like last year, but. And we do actually, for those curious and maybe want to work at either SpaceX or Tesla, we do allow people to move from one company to the other if they would like. So if you want to spend a better time working on electric vehicles, better time spending working on rockets, you can.That's cool. We support that. So yeah, And we also made a lot of improvement with factory safety. So we, I think we believe we now have the best factory safety in the industry. And so yeah, we're excited to have, you know, very good safety and getting better.And a bunch of this is driven by just encouraging people within the factory to submit ideas for safety improvement. And we've passed our goal of three suggestions per employee this year. And this really is a game changer for improving safety.You don't have to clap after every slide unless you really want to. But.So we. There's a lot of interest in working at Tesla with 3 million job applications last year, so sorry.Yeah, it's true.So a lot of interest in working at Tesla.Now some people may occasionally have encountered a supercharger that didn't work, but in general the uptime of our superchargers is extremely good. And we just try to make it super smooth. And the. Because our superchargers are always connected like the car is always connected, our feedback loop for fixing a supercharger is very quick. And obviously we keep upgrading the supercharger capability. We're now at version Three.Three. We'll start rolling out version four. I don't know, maybe next year. So it just. The superchargers get better and better and, you know, who knows? The. Yeah, actually, I don't want to give away the.Let's just say that there's some cool stuff happening on the supercharging front. So.Alaska. Alaska. Yes.All right. We're basically doubling our supercharger count every year. So if there isn't a supercharger in some place that you think is important, it probably will be there soon.We've also made a lot of progress on safety. So our cars are already the safest in the industry. So we have the lowest probability of injury of any cars ever tested by the U.S. government. And we update this in real time. So we, because our cars are connected, this is a big difference. All the other cars, with rare exception, are not connected. So the manufacturers don't really know what happened in a crash. But in the case of Tesla, we are able to look at crashes and see how can we improve the safety, look at the crashes, improve the crash structure.Also we improve how the seat belts tension and how the airbags deploy. So in these updates, if we figure out, oh, there's a slightly better way to deploy the airbags to improve the safety in a crash, we'll actually do an over the air update to improve the way that the airbag airbags deploy or the way that the seat belt pretensions. And we're now starting to include our Tesla autopilot AI to be able to see if a crash is about to occur.And if it, if it sees that a crash is about to occur with 99 plus percent probability, then it will activate the seat belt pretensioners and deploy the airbags as opposed to what the vast majority of cars do, is the vast majority of cars are only able to deploy airbags when the crash is happening. And so that's, that makes the airbag deployment a lot more violent. But if you can anticipate the crash, the airbag deployment can be much better than just impact.So.We'll see FSD Beta grow very rapidly and this, this is definitely going to go very exponential in miles driven. So we're now at over 40 million miles and I suspect by the end of this year we'll be, I don't know, well over 100 million miles. So, and we're still tracking very much to have widespread deployment of FSD Beta this year in North America. So I'm, I should say if basically FSD Beta will be available to anyone who requests it by the end of this year.So.So, AI Day Part 2. I think people were blown away, but that's at the end of next month, so we'll leave that. If you accept. It's. There's going to be a lot of cool stuff. So.The. I'm sort of surprised that, you know, people, or at least like analysts out there are not really understanding the importance of the Optimus robot.My guess is Optimus will be more valuable than the car, than long term.And in fact, it will, I think, turn the whole notion of what's an economy on its head.The point at which you have no shortage of labor. You know, economy is GDP per capita. If you do not have a capital constraint, then the economy just can be arbitrarily huge. So, yeah, it's sort of crazy.Anyway, thank you for voting. So your vote matters and it's great to have direct contact with individual shareholders. And thank you for voting to support our proposals.So the next decade, I wonder how many cars we'll have in 10 years.10 years ago we had less than 3,000 cars. Now we've made 3 million.300 million.I'd say 100 million is pretty doable.I'd be surprised if it's not over 100 million in 10 years. And then many other products, some of which you've heard about, some of which you have not.Blurted out. All right, so we've got some questions from the Internet that were voted to the top. So I'll answer these questions and then we'll take just questions from the audience.