Hi, everybody. Welcome back to the show.
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All right, here's Elon talking to Trump's cabinet and then
Trump talking about Elon. Notice what Trump says about
Elon. Good afternoon, everyone, and
welcome to Tesla's first quarter 2025 Q&A webcast.
My name is Travis Axelrod, Head Investor Relations and I'm
joined today by Elon Musk, Deva Taneja and a number of other
executives. Our Q1 results were announced at
about 3:00 PM Central Time in the update deck being published
of 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&A, Elon will be providing an update.
Elon. Hello everyone.
Well, it's never a dull moment these days and 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 fortunate dollars will try to
attack me and those team and anything associated with me.
So but then I am really left with two choices.
Should we just let the waste and fraud continue?
And I was 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, I believe the right thing to do is to just fight the waste
and fraud and get the country back on the right track and
working together with the 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 this critical
work. Now, the protest that you'll see
out there, they're very organized.
They're paid for. They're they're obviously not
going to say it meant that the reason that they're protesting
is because they're receiving fraudulent money or that they're
the recipients of wasteful digest, but they're going to
think they come up with some other reason.
But that is the the real reason for the protests.
The actual reason is that is that those receiving the waste
and fraud wish to continue receive receiving it.
That is the real thing that's going on here, obviously.
So now that said, I, I do think there's, you know, the, the,
the, the large slug of work necessary to get the village
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 probably 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, you know, a day or two
per week on government matters or as long as the president
would like me to do so and as long as it is useful.
But starting next month, I will 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 at Tesla, we've gone through many, many a crisis over
the years and actually been through many near to many near
death experiences. Like we're probably we're on the
rabbit edge of death at least and maybe a dozen times.
It's been so, so many times. This is not one of those times.
We're not on the rugged Japan, not even close.
So, you know, there are some some challenges and I expect
that this year will be there'll probably be some unexpected
bumps this year. I remain extremely optimistic
about the future of the company. The future of the company is
fundamentally based on large scale autonomous cars and and
large scale being large volume vast numbers of autonomous
humanoid robots. So the the value of the 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.
But that's an important if we must execute well.
But if we do execute well, I do, I think Tesla will be the most
valuable company in the world by far.
It may be as valuable as the next 5 companies combined.
So there'll be a few bumps along the road before before that
happens. I said I think on the last
earnings call that you know the well we'll start to see the
prosperity of autonomy take effect in a material way around
the middle of next year. We still expect, we expect to
have these be selling fully autonomous rights in June in
Austin as as we've been saying we're now several months.
So that 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, of the, of the, when does it move the
financial needle in a significant way?
That's probably around the middle of next year.
So it can happen next year. And then once it does stop, move
the move the financial 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, some sort of bumps and potholes of the road immediately
ahead of us. Left your gaze to the bright
shining, you know, citadel on a hill.
I don't know some Reaganesque imagery and that's where we're
headed and not, not, not too distant future like I said and
the next year. So 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, from A
and from a logistics risk standpoint is to have the supply
chains be at least located on the continent in which the car
is built. And so we are the least
accompanied, the least affected car company with respect to
tariffs, at least in most respects.
I mean, it remains to be seen. Now tariffs are still, yeah,
tough on a company where margins are still low.
But we, we do have localized supply chains in North America,
Europe and China. So that's 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, I just want to emphasize
that this, this, the tariff decision is entirely up to the
president of the United States. I will weigh in with my advice
with the president, but he, he, he will listen to my advice, but
then it's up to him, of course, to make his decision.
I, 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 for lower tariffs
rather than higher tariffs, but that's all I can do.
So now, 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 robo taxi to Austin
engineering unsupervised autonomy will first be solved
for for for the model Y in in Austin.
And then actually we should parse out the term robotic taxi
or robo taxi and just generally like what's the the cyber cab?
Because we've got a product called the cyber cab and then
but any any Tesla which could be an S3X or Y that is autonomous
is a robotic taxi or robotaxi. It's very confusing.
So the vast majority of the Tesla fleet that we've made is
capable of being a robotaxi or robotic taxi.
And as we regarding from once we can make the halt the system
work where you can have paid rides fully autonomously with no
one in the car in in one city that that that is a very
scalable thing for us to go broadly within whatever
jurisdiction allows us to 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 in that legal jurisdiction.
So if it's once we can make it based work in a few cities in
America, we can make work anywhere in America.
Once we can make work in a few studies in China, can make 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 the an AI chip that tells the 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 the cost stops
working. So we have a general solution
instead of a specific solution. Yeah.
And regards to optimists, making good progress on optimists, we
expect to have thousands of optimists robots working in
Tesla factories by the end of this year doing this for work.
And we expect to scale optimists up faster than any product I
think in history to get to millions of units per year as
soon as possible. I I think feel confident in
getting to 1,000,000 years per year in less than five years,
maybe four years. So, but 20-30 I felt confident
in predicting 1,000,000 Optimus units per year and it might be
2029. So let's see with respect to
energy, energy business is doing very well.
The Megapack is enables utility companies to output far more
total energy than would otherwise be the case.
When you think of the the energy capability of a grid, it's much
it's much more than it's a total energy output per year is.
If power plants could operate at peak power for all 24 hours as
opposed to being at half hour or sometimes 1/4 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 the something like battery pack at
night and then discharge into the grid during the day.
So this is a 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 GW class
factory is quite a common thing. So with many orders in the offer
for GW and beyond batteries and we expect the energy, the
stationary energy storage business to scale ultimately to
terawatts per year. So very, very good 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, and this so we picked Q1 as
like a good quarter to do a cut over 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 a, it's really
that was very impressive work. So yeah, in conclusion, while
there are many near term headwinds for us in the border
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
for all. If you say like, what's the
ideal future that you can imagine, that's what you'd want.
You'd want abundance for all in a way that's sustainable.
It's good for the environment. Basically, this is the happy
future. If you say what's, what's the
happiest future you can imagine? One which is 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 of
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, Vaibhav has some operating 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 was
not a small feat. We're not aware of anybody else
being able to do the best selling car all at once within
1/4 and that too hitting all the timelines which we had
established at the beginning. So when big kudos to the team
for making this happen. Additionally, we also hit a
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 per the Ripper 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
that 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 by all the people at just start 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 after that 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
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 who experience it.
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 the total
number of deliveries, lower fixed cost absorption due to
factory change awards and lower regulatory credit revenues,
offset slight by a slight increase in pricing due to the
launch of new Model 1 despite incentives which we had to sell
legacy Model 1. Energy storage business like I
said before has achieved yet another milestone of great
highest gross profit in the quarter.
This was despite, you know, sequential decline in
deployments. The importance of this business,
as you know mentioned is really 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 constraint 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 position business through better label
product today. As previously discussed, our
operating expenses continue to increase sequentially primarily
due to our AI related initiatives including Optimus
and also constant development for our vehicle programs
including cyber Caps, SEMA and cheaper models.
These expenses flow through R&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 and the CNA from
changes in our micro level 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 management. With the adoption of the new
mark to market standard for Bitcoin, we expect increased
volatility in other other income in addition to the FX
reputability. I know with tariffs is the
hottest topic which people talk about and it has various impacts
to our business on 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 ago. This is part is of the 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 line up
in US, we're about approximately on a weighted average basis 85%
USMCA compliant. So like Elon said, this
definitely gives us a bigger edge as compared to our other
OEMs in terms of managing the tariffs.
But we're not immune because when the 230 Section 232 auto
tariffs become effective in May which includes Canada and Mexico
and Canada and Mexico has been part of our regionalization
study, they will have an example of profitability.
And I know research modelling on this impact has been up about
couple of 1000 people, which is pretty much in line with what
we've been forecasting. The impact of tariffs on the
energy business will be outside since we so much LFP battery
cells from China. We are 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
at like later on we've also been working on securing additional
supply chain from non China based supplies but it will take
time. Also note that you know mega
fact irrespective of all the impact on US from from our
energy from tariffs on the energy business, we do have
manufacturing China which just started operations in Q1 and
that our 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 own onshore manufacturing or expand lines, we have to bring
equipment from outside the US 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 have tried to do, it is
forecasted to be still in excess of 10 billion this year and we
are still evaluating what more to do on this one.
To summarize, we have near term challenges in our business due
to tariffs and bad 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 are still focused on bringing
cheaper models to market soon. The 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 head of demand.
I would like to thank everyone at Tesla and our customers.
Fantastic. Thank you very much, Eva.
Now we will move on to investor questions.
We will start with questionsfromsay.com.
First question is what are the highest risks, highest risk
items on the critical path to robotaxi launch and scaling?
Is Ashok Yeah we've got a shock all on sure.
Well just just talked by the disambiguate the Cybercam from
robotaxi. So the when will the Teslas
because the Teslas that will be fully autonomous in June in
Austin are probably model wise. So that is, that's, that's
currently on track to, to be able to do paid rides fully
autonomously in Austin in June and, and, and then to be in many
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 and month by month, except that
it will ramp up very quickly. So it's going to be like some
basically an S curve where it's very difficult to predict the
intermediate slope of the S curve, but you kind of know
where the S curve's 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.
But yeah, certainly the second-half of next year,
meaning I break 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 of that sort of, 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're still drive, but your
probability of an accident is higher.
So there's, it's, it's increasingly obvious that
there's some value to having a localized set of parameters for
different, you know, different regions and, and localities.
But this is the output that the nice staff category.
It's not the required category really.
The car is just very much like a human.
It's, 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 and eyes. Ashok, you'd like to elaborate
on that? Yeah.
And speaking to the location specific models, we still have a
generalized approach and you can see that from in our deployment
of FSD supervised in China, where with this very minimal
data that's like China specific, the models generalize quite well
to completely different driving styles.
That just like shows that the a 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
hardcore 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 pursuing is the right one
that's going to scale well. And you can think of this like
location specific parameters that you don't need to ask a
mixture of experts. And if you're sort of like
familiar with the A models and Grog 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 the model to use limited amount of compute to
solve for the reliability of tasks that it has to solve in
terms of addressing the question that asks for you know, 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 free, but
then it's like super rad to get interventions that are critical
for a void XC operation. And so you can like go many days
without getting any single intervention.
So you can't easily know whether you're improving or regressing
in your capacity. And we need to build out
sophisticated simulations including neural network based
video generation that's not 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 we're
driving around the block or something like that.
Yeah. I mean, very basic terms, if
that 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, OK, now imagine, I
mean, we must be really, it must be very waked up by the sheer
number of Teslas doing some. It's in in Austin right now.
We're like, what? It's going to look pretty
bizarre. Some people are chasing.
Yeah, there's just always a convoy of Tesla's going, going
well, just going all over to Austin in circles.
But yeah, as I just can't emphasize this enough in order
to get figure out long tail things, you if it's one in
10,000, that's that's one in 20,000 miles or one in 30,
though now 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 ward. Just do do in a matter of a
month what would normally take someone a year.
Yeah. And 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, they're the dark roads,
frankly, I think. The Chinese consumer might be
the most romantic 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 on a narrow dirt Rd. yes, across like a mountain.
And I'm like still a very brave person.
And I said this driving along on the road with no barriers where
makes a mistake, he's going to plunge through his doom.
But it worked. Great.
Thank you. And if if the question was on
Cyber cab itself, we're we're in B sample validation now.
Yeah, Yeah. We should ask that question too.
Yeah, we have our first. Like big builds coming at the
end of this quarter within Q2 and then you know, in the coming
months they'll 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 the thing that
there's no new building being built and where is Cyber Cab
going? Oh, it's in the game.
It's. Literally the same.
Factory. Yeah, yeah.
If everything is it's happening and people don't know it's just
happening upstairs in all along lines while we're still building
the Model YS and cyber trucks every day.
Yeah, yeah. It's worth noting that the, you
know, the the Tesla Gigafactory in Austin is 3 times the size of
the Pentagon, including the garden.
Yeah, including the Ground 0 garden.
So, you know, good. Because of the Pentagon.
Like this spelling 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 US like like we do want to test like
we're at Tesla, we're absolutely hardcore about safety.
You know, we go to great lengths to make the safest car in the
world and have the lowest accidents per mile.
And so and look, if you just live lost.
So we want to be very careful. So it's so and 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 it.
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 people should we should
be able to have have it work in several studies later this year
for personal use. So you know, the acid test being
you should be able to can you go?
Can you go to sleep in your car and wake me to 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?
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 ramp 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 that's
blocking us from starting production within the next
within the timeline laid out in 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, 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, you know, 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, Geo fencing
and regulatory flexibility? Well, OK, the issue with with
Waymo's cars is that cost way more money Rosha, but that is
the issue. You know, they cost very
expensive, made in low volume Teslas are, you know, I don't
know, probably cost 1/4 of 20% of what, what, what way more
costs and, and made in very high volume.
So, you know, ironically, like we are the ones that made the
bet that a pure AI solution with cameras and what do you the car
actually will listen for sirens and that kind of thing is the
right move. And we decided that that
expensive sensor suite is the way to go, even though Google is
very good at AI. So I'm running and you know, it
is worth noting that Tesla is both an incredible AI, you know,
AI software team and AI hardware chip design team prospect from
nothing. They didn't require anyone or
just both it. So yeah, it's really, I mean, I
don't see anyone being able to compete with Tesla at present.
I'm sure that will change eventually, but at least as far
as I'm aware, Tesla will have, I don't know, 99% market share or
something ridiculous. That 90 something percent at
least I don't know, at least some of them might change.
But you know, if you if we have millions of cars deployed next
year and unless others have millions of cars deployed like
we'll have unless we're blocked by regulatory situations, it
won't be long. I mean, in a few years, why 10
million autonomous cars on the roads and, you know, and, and
counting I. Mean the the other thing which
people forget is like, we're not just developing the software
solution, we are also manufacturing the cars.
Yeah. And like you know what like way
more hands they're taking cars then trying to put.
Way more money. We, we don't do that.
So that that definitely gives us a big peg up.
And like Elon said, we already have a big existing fleet which
hopefully with the software update could become autonomous.
With the software update bid will become autonomous.
To be clear, the model wise that we're talking about in being
autonomous in Austin in June are the modelized we're model wise
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,
yeah, these kind of things. In fact, it does Dr.
autonomously from the factory to the end of line every car.
Yeah, so in the US through. The tunnel, the model wise,
everything. Right.
Yes, exactly. We have It is being put to to
use. It's it's, it's doing useful
work fully autonomously at the factories.
As a truck was mentioning the cars drive themselves from end
of line 22 where this was being picked up by a truck to be to be
taken to a customer. And I am confident also that
later this year the first Model Y will drive itself all the way
to the customer. So from our probably from a
factory in Boston and our one in here in Fremont, CA, I'm
confident that from both factories we'll be able to drive
directly to a customer from a factory.
School delivery. Yeah, literally goes from the
end of line and drives themselves to your house.
It's important to note in the factories we don't have
dedicated lanes or anything. People are coming in and out
everyday, 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
uncovered. Exactly.
And there's videos, people take videos online and anyone who
wants to go see it can just drive past our Fremont factory
and see the autonomous cars driving themselves.
And they drive themselves and they put themselves in the exact
right spot to be picked up. 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, spot, spot.
Yeah, yeah. So that that's just a routine
like everyday thing. Great.
Thank you very much. The next question is can you
please provide an update on the unboxed method and how that is?
Progressing. Sure.
It's progressing, absolutely. As I mentioned just a minute
ago, like it is the basis for our cyber cat 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 vehicle
manufacturing scales, but not something that you know, you
when you see it be produced, you'll, you'll, 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, in an accurate way.
We've also de risked things like corrosion of, of uncoated
aluminum structures, you know, the ceiling across the seams of
the vehicle and when you marry several components and we've
even done early crash testing and we've proven that like, you
know, it's, it's going to be just as safe as every other
carbon build. And so like we're as you know
with all that combined, we kind of go into the builds that we
have at the end of this quarter for the for the Cyber Cab
product and that's the next real big test of full scale, you
know, integration of the unboxed process.
And yeah, that's kind of where we are.
So you'll see them intestinal on the test roads in a couple of
months. Yeah, although the line won't be
obviously at this rate initially.
Initially I the the 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
can. 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
my favorite revolutionary than that.
This is this is a very profound reimagining of how to make cars
in the 1st place. No cars 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 allow us to achieve a cycle time in a
unit every 5 seconds or less of a single line.
And we want to incorporate some of these for testing it into our
existing production lines as well to progress with the wine
cyber truck already. So this is something I've been
thinking about for, for a long time.
And I've, I've sort of, I've been thinking about this for a
long time and it's kind of, it's, it's not a crazy thing
like like a car every 5 seconds may sound like it's coming out
like bullets, but actually it's coming out at walking speed.
It's like a meters, 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 3 miles an hour type thing, you
know, every 5 seconds sounds crazy, but it's 3 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, And it's like half hour many
half order many like fun. What's like messing the line?
I don't know if it's like about the.
Shanghai phase two and. That's us 33 seconds, yes, we're
the fastest, right? I would think so we think, we
think we're the fastest at 33 seconds in our Shanghai factory.
But but this, this would be, you know, 6 times faster or seven
times faster amounts. So yeah, I mean, it'll be slower
than that 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, the 5 second
cycle time or less is the design is capable of it.
You know, So if you, you know, like when you, when you go
through like a radical new architecture, you go from like
being like in a, I mean, I'd say like probably in particular as
an A+ on, on a moderately, you know, an advanced but still
traditional, 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 fast
that a human could possibly move.
So then the autonomous line, it really just needs to be robust,
moving really fast. And that's where you get to some
5 seconds. But we'll so but we'll start off
with getting AC and instead of an A getting AC and a new
architecture, but then the the potentials there over time to
move that up to an an A+ 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
terrorists, political biases, etcetera?
As Ilan said, you know, we've been the spicing team been at at
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 Shanghai 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 supply 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 tariffs are higher on our low volume
platforms than the high volume ones.
Yeah. In fact, there's no more
vertically integrated car company in Tesla.
I mean, we're take about it most buddy, integrated car company
since you know, Henry Ford back in the day when they're doing
mining iron and stuff and growing rubber trees.
So like we're not growing rubber trees and mining iron.
Yeah, but we are, we have both today at a lithium refinery in
South Texas and it's the I think the biggest lithium refinery
outside of China, I think. Is that right?
Yeah, I think so. But it has it's output potential
would be the biggest one thing refinery has.
Yeah. And we've got space to expand it
if we need to build more, right. So and then we've got the
cathode refinery in Austin next to the 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 figure out how
to have no anode test, anode test part being no part.
That's, that's the dream of the lithium batteries to be anode,
not have an anode. But either way, we, we better
have the anode, the cathode and the lithium and the electrolytes
and the separator to make a cell.
But 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 that's
our best position to protect against supply chain
disruptions. Yeah.
You want to talk about progress in the.
Yeah, certainly for in ourselves we've, you know, we've multi
sourced every component and we have, you know, every part
coming from at least two different countries large, which
is and that we started this, the supply chain team and the
engineering team worked together on this for the last couple of
years to to put that together. It's not something we did in a
couple of months, you know, this is years of work.
So we're, you know, we're in a good position to to the
advantage of that. And the and the insourcing of of
lithium and and cathode, they're the two most critical parts of
the battery that's, you know, run in that backyard and and
we're totally insulated from the oil.
It needs to be an operation, operation.
We also make our own cells, by the way.
So cell production, if you took this, 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 the
cathode or you know, so our cell production is is going quite
well. And I think we're are we, we're
currently sort of the lowest cost per kWh, yeah, in the
others for our all cells we purchase in North America.
Yeah. So it's all those cost to us.
Yeah. So we have the lowest cost per
kWh all things considered. So the Tesla cell is the most
competitive cell, yeah, for a kWh putting to a car.
If it's if the Tesla sell it's lower cost, then it's the
supplier sell. Yeah, yeah.
And the, the plan that's here is to really build off that base.
You know, getting to lowest cost is it's it's the hardest
challenge for so many battery. 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 and add, you know, performance in
different areas. So new products coming out,
yeah. So yeah, I mean.
To Elon's point that there's a there's a lot of advantages for
regionalization. You know, the most important
thing is we're not finding the 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 as per light. It also gives us resilience and
supply chain. If one region is down, we can
bridge with others. It's more worth to set up in the
beginning, but it's critical to have when the need arises.
Having said that, it's unrealistic to zero 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 a disruption doesn't impact production while
we step stand up the the regional manufacturing for that
particular commodity. And you know, I'll say like on
the rest of the vehicle, like you know, was talking about with
cells, we're also heavily very integrated import ingots, you
know, internal castings, you 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 to find alternate sources and
bring those up as well as we have burn texture machines.
And as we've mentioned in the past, we're working our ferrite
lovers for some time. So like as Karen said, you know,
with our heavy regionalization percentages, we're definitely
like the lowest, you know, exposed to this.
But we're not completely new in this Bible I've mentioned in
several remarks. Great.
Is it similarly related on the battery guide, just Tesla still
a battery supply constraint as noted on the Q4 call?
And does that change the tariffs?
So this is Karen. 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.
And that strategy is really starting to pay off Now.
As it stands right now, we're not constrained on battery cells
supply for vehicles. The recent tariffs do pose some
challenges to Tesla Energy, well, 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 to find a place.
We're executing towards it. We also have some other sourcing
sources coming online to supplement the shortfall.
And then of course, we have the LFV production that's happening
in house. We have we have a slight
disconnect of aligning the right cells with the right path.
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 of the rumors of brand damage?
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 8 weeks, we've already gone to the rate of our
previous model wise the factories.
So just kudos again to the team for the great job there.
And despite the economic strain and negative articles that had
in California and Q1, Tesla remained the best selling card,
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.
Vehicles. Yeah, I mean, Tesla's wanting
you to sort of the macro demand for cars, you know, so when when
there is economic uncertainty, people generally want to pause
on buying during a major capital purchase like a car.
But you know, as far as absent macro issues, we don't see any
reduction in demand. Correct.
And that's where we continue to focus on affordability and it's
a fun focus there. Yeah.
Fantastic. Thank you, guys.
The next question is regarding the Tesla Optimist pilot line.
Could you confirm it if it is currently operational?
If so, what is the current production rate of Optimist
bonds per week? Additionally, how might the
recent tariffs impact the scalability of this production
line moving forward? And optimist, I want to just
want to emphasize Optimus is still very much development
program. It's not, it's not a you know,
it's not a large volume production.
It'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 robust, 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 there's not like an
existing supply chain for the motors, gearboxist, electronics,
actuators, really anything in the in the almost anything in
the optimist apart from the the AI for Tesla, the Tesla AI
computer, which is the same as one in the car.
So when you have a new complex manufactured product, it'll move
as fast as the slowest and least lucky components in the entire
thing. And as a first order
approximation, there's like 10 to 10,000 unique things.
So, so that's why that's why it doesn't anyone who tells you
they can predict with precision the production ramp of the 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, this part's limiting
factor, and multiply that by 1000 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, you know, by the
magnets issue from China because the optimist actuators in the
arm do use permanent magnets. Now Tesla as a whole does not
need to use some of the magnets. But when something is volume
constrained like 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 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 they're not.
They're just going into a humanoid Rd. launch.
So it's not a weapon system, but that that is an example of a
general challenge there. But I'm confident we'll overcome
these issues and we'll, by the end of this year have thousands
of off most robots. Great.
Thank you very much. And the last question, we
already covered earlier whether Robotex was still on track for
this year. So with with that we can move on
to analyst questions. The first question is going to
come from Pierre at New St. Pierre.
Please unmute yourself. Hey guys, can you hear me?
Yeah, that's great. I'm super excited to hear that
Robotaxi and Optimus becoming the very tangible feature for
Tesla. But I have actually a question
on the on the legacy, not the legacy, but the current like
auto business. And when I look back at the ramp
of Model 3 a few years ago, I really saw it as being the
iPhone of cars, a new product completely reinvented, very
different user experience, vastly superior, impossible to
to match for traditional competitors.
And for the iPhone, it resulted in the 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
what, why are there so many people still buying game WS and
Mercedes knowing that the Model 3 and the Model YS are out there
and available? And I wonder if you've, if
you're trying to solve that's rather internally, if you
understand why, you know, what are these auto buyers who are
not buying a Model 3 or a Model Y missing And, 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.
Yeah. I the, the, the, the reality is
that in the future, most people are not going to buy cars.
So it's, it's kind of what, you know, what one could sort of
say. Look, I think you want to
continue with your, your phone metaphor.
I mean, you can remember the days of the flip phones when
there was, you know, 100 different flip phone designs.
And, and I would, you know, the, the mistake that lump
manufacturers made was to try to make that many different
variants of a foot bone, which was a mistake.
They should have made the iPhone so because obviously everyone's
going to want a smartphone. But in the beginning of the of
when, when you know, the iPhone came out, I was like, wow, I
can't believe these guys are not reacting as though this, this is
death. But they didn't they, they kept
making variance of flip phones. Nokia.
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 mock niche.
Maybe somebody wants a phone of a different style, maybe this
different colour or whatever it is.
Nope. They just want a super
intelligent phone. They can do everything, just one
SO. I said this many, I said this
many years ago, but in in the future, in in the not, 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.
OK. And.
Thank you. The next question comes from
Emmanuel Rosner at Wolfe. Emmanuel, please, I'm here.
So. Great.
Thanks for taking my question. So Ilan, the 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? And we are working on a number
of items too. Yeah, I mean we are aware of the
interventions that are happening in the public bills and that's
why we are hardcore burning it down.
And really just picking some initial launch city helped us
focus on like solving all the issues that you'd face here, for
example, like it's focusing on Austin.
We're not like solving all the issues that, you know, customers
in Boston or somewhere else might face.
And then here we just like, you know, have a big list of all the
issues, just burn it down. And that's what the team is
working on along with other sort of like redundancy issues.
For example, if one of the computers goes down right down
the customer fleet, it would like 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 we just worked 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, that's a lot of driving
you've got to do to even find one case within Athens.
Yeah, and some interventions due.
To. Systematic missing
functionality. For example, for handling
emergency vehicles correctly, you don't need to consume audio
as an input other than 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.
OK, but would you have like remote operators for example?
I mean every now and then if a car gets stuck or something
someone will like, you know, unblock it.
But it's just figured 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 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 say for yourself in a couple months
in Austin. Great.
Our next question comes from Edison at Deutsche Bank.
Edison, please unmute yourself. Hi.
Thank you very much for the question.
So I want to ask about the the optimist supply chain going
forward. You know, you mentioned, you
know, 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, how, how does one kind of think about what needs to happen
there? We.
Have to see how things settle out.
I don't know yet. I mean some things we're doing
as Pretoria talked about, which is that we're, we've already
taken many steps to localize our supply chain.
We're more localized than any other manufacturer and and we
have a lot of things and under way that to to increase the
localization to reduce supply chain risk associated with
geopolitical uncertainty. Did you follow up?
Yeah, wanted to come back actually to the, the robo taxi
then. Do you have a sense on, on how,
how many cars or how, how big the scale will be initially and
how that might ramp up? I know you're, you're targeting,
you know, millions of, of vehicles in the second-half kind
of of next year. But initially at launch, how,
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 to request?
Yeah, we're still debating the exact number to start off on day
one, but it's like, I don't know, maybe 10 or 20 vehicles on
day one and watch it carefully, 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'll be able to end of June or July, just go to
Austin and what are Tesla? What time does drive great?
The next question comes from George at Canaccord.
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? Thank you.
I mean, 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, we do need to
give people more time to to they want to look at like the key
break point is can you read your text messages or not?
Yes, can you write a text message or not?
Because obviously people are doing this, by the way, with an
autonomous cars all the time. And if you just go over, go over
drive down the highway and you'll see people texting while
driving, you know, doing 80 miles an hour.
Yeah, but depending on makeup, doing their hair with, 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, you know. So anyway, but right now the car
is very insistent that you pay attention to the road.
So 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 up so you can be more and more able to do things you
want to do and not have the card to manage your rate of
detention. So, so that, that, that value,
it'll really be profound when you can basically do whatever
you want, including sleep and, and, and then that $99 is going
to seem like the best $99 you've ever spent in your.
Life and George, did you have a follow up?
My follow up is about geographic expansion.
Just maybe discuss additional markets.
You know there's. Been some news around India
recently that you could launch this year and next.
Thank you. So, yeah, I mean we we've been
working on getting into II is a very hard market and especially
the current and I don't want to talk just about tariffs, but the
current tariff structure with India is that any car which we
send in is subject to 70% tariff also on like a 30%, you know
luxury tax on it. So you know, the same car which
we're sending is like 100% more expensive than what it is.
So that creates a lot of, you know, anxiety.
It's like, you know, people feel OK, they're paying too much for
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 type 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 are trying to work around.
Great. Thank you so much.
The next question comes from Adam Jonas at Morgan Stanley.
Go ahead. Adam.
We, we can't hear you, Adam. So, Mindy, we'll put you back in
the queue and we'll move to Colin Langan from Wells Fargo
while Adam figures out his audio.
Colin, please unmute yourself. Oh great.
Do you hear me? Yes.
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 on getting around those issues?
Because I my understanding it kind of blinds the camera when
you get glare and stuff. Actually it does not find the
camera. The we use an approach which is
direct photon count. So when you see the a processed
image, so the image that goes from the sort of photon counter.
So the silicon, the silicon photon counter that gets goes
through a digital signal processor or image signal
processor. That's, that's normally what
happens. And then that then the image
that you see looks all washed out because if it's you point
the camera at the sun, it, 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 like people can
probably better, but in fact say quite slightly better than
people than the average person anyway.
And yeah, so so the. Camera is able to see when
there's direct glare on it. I'm surprised by that.
OK. And then just.
There are 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, and 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.
And there's always limitations when you're using existing lines
as to how many different form factors can you ping to.
So that's the way I would say you should think about it, and I
don't. Know yeah and I think I said
this before and other other calls like, you know, with the
recent upgrades telling the Model 3 and the worldwide
platforms, we made some pretty great cars at pretty great
prices and we had 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, you know, the models
that come out 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 that the key
is that they'll be affordable and you'll be able to buy one.
Great. We might have time for one last
question, Adam. We'll try your audio again.
You want to try to unmute yourself, Adam.
All right. Unfortunately still not working.
All right. Oh, all right guys.
Technology go. Ahead.
Yeah, hi. Yeah, 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, I'm not, I'm, I'm,
I'm one of many advisors to the president.
I'm not the president. So, and but I, you know, I've
made my opinion clear to the president and that, you know,
and, and other people made their opinion clear to the president
because he is there, he listened, 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 where my advice differently in the future, which
we'll see. But, you know, I'm an advocate
of, you know, predictable tariff structures and generally I'm an
advocate for, you know, free trade and lower tariffs.
Now, 1 does need to take a look at where if, if, if some country
is doing something predatory with tariffs or is providing
that extreme support for if a government is providing extreme
financial support for a particular industry, then you
have to do something to counteract that.
So, but I think that that's on a case by case basis
strategically, but you know, the the president is the the elected
representative people and his fully within his rights to do
what he would like to do. OK, Elon, I, I, I respect that.
Just as 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. I'd be interested and and is it
even close and kind of how I I yeah, I'm serious.
Well, I think you know the answer to drones.
I mean, yeah. You know, a friend of mine,
Yuval made this, you know, posted on XI, reposted it, I
think a prophetic statement, which is any country that cannot
manufacturers own drones is doomed to be the vassal state of
any country that can. And we can't, American cannot
currently manufacture its own drones.
But that's it again, unfortunately.
So China I believe manufacturers about 70% of all drugs.
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
position and here in America and we need to shift more of our
people and resources to manufacturing because this this
is and I have a lot of respect for China because I think China
is amazing actually. But the United States, the
United States do not have such a severe dependency on China for
bad groans 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 do not think there is any
company in any country that can match Tesla.
Tesla and SpaceX are #1 so. And then now I'm a little
concerned that on the leaderboard ranks 2 through 10
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. Did you catch that, what Trump
said about Elon? And it's it's telling the kind
of person that Trump thinks Elon is now.
And I'm not taking a side here. I am more in favor of doing the
right thing and being nice to people than I am about anything
else. And something is telling about
the way that Donald Trump just kind of blows off Elon in this
clip. And I would say that about
anybody. I'm I'm not for or against
anything. I just know what I hear.
Right? And if you didn't hear that,
then go back, rewind a little bit, check it out.
Notice how he kind of just like brushed Elon off as one of those
people that like, I don't really need the guy.
He just came in here and did this thing.
And that's cool. You know, like that's kind of
how he how he worded it. But yeah, I mean, let me know
what you think in the comments. Let me know how you feel about
this because I'm here to have a conversation with you.
And we are also a community here.
And if you want to join our community for further
discussion, we have a Discord. I'm going to leave it in the
description down below. So thank you so much for
listening today. I appreciate your time and I
appreciate you spending it here with me on stage 0 Elon Musk
podcast. Take care of yourselves and each
other and I will see you in the next one.