Watch Live! Tesla’s Annual Shareholder Meeting & Battery Day

by birtanpublished on October 3, 2020

In june of 2019 you'll hear more about many of the specific achievements from elon later in the agenda but i would like to take this opportunity to thank all of our tesla employees across the globe who have done a tremendous job of executing and staying focused on delivering for our customers and shareholders as the world has gone through one of the most challenging periods in our lifetimes as a board we have always taken a long-term view we have made decisions and supported

Decisions made by the management team that may not have seemed obvious at the time but are delivering and will continue to deliver breakthrough results but it's also important to remember why we do this as a company we are focused on addressing one of the biggest environmental challenges of our generation how to accelerate the world's transition to sustainable energy the last year in particular has seen a tremendous increase in

Momentum in the movement to sustainable energy from both shareholders and the general public so in addition to developing amazing clean transportation and energy products we are doing our part by contributing the right facts and information to this important issue and we released an extended version of our impact report in april of 2020 in this year's version we have covered in great detail

Many areas that are important to our shareholders and our customers alike such as our environmental impact greenhouse and other noxious gas elimination our supply chain efforts especially in cobalt and our culture and people focus we hope that by continuing to put this data out there we will underscore to the world the importance and impact that we are having as a company lastly continuous feedback and input from our shareholders is essential for

Us to do our jobs and i would like to thank you for your support in this regard many of you have provided me and the team with ideas and insights that we as a board take into consideration as we evolve our governance and company practices it's especially crucial to the board members as we pride ourselves in adaptability and the diversity of thought and experience that we collectively represent on the board this brings me to my final

Two things today as today is his last shareholder meeting on behalf of the board i would like to sincerely thank steve jervison for over a decade of service to tesla the board and our shareholders you will be missed finally i would like to introduce to you our newest member of the board hiro mizuno who until recently led the largest pension pension fund in the world he brings a wealth of experience to the board but let me

Hand over to hiro to say a few words hero thank you robin ladies and gentlemen welcome to tesla annual shareholders meeting it is my real pleasure to virtually meet you tesla shareholders people who believe in tesla's mission and its growth opportunities i spend all my career in finance and asset management in tokyo new york london and silicon valley until recently i was a chief investment officer of gpif

1.5 trillion dollars japanese public pension fund and one of my priorities as an investment chief was to promote responsible investments which aim to make financial returns while pursuing esg agenda such as environment and social issues i believe in the market where esg is becoming mainstream purpose or mission-driven businesses will gain long-term investor support this is why i was interested in tesla where a mission

Is to accelerate the world transition to sustainable energy i'm very excited to join the tesla team on the journey and hope to assist tesla deliver what investors expect by further enhancing its environmental and social impact once again tesla shareholders thanks for your support i'm looking forward to seeing you in person next year thank you thanks robin and hiro i will now call the meeting to order please refer to the meeting agenda that

Has been provided to you and posted also to our virtual meeting site the time is now 1 49 pm pacific time and i declare that the polls are now open we've already received voting proxies from stockholders over the past few weeks meaning that almost all of the votes that will be counted were already submitted before the meeting however if you wish to vote now or to change your prior vote you may do so through the virtual meeting site for those that are here in person today

Ballots and ballot boxes were available to you at check-in tesla's board of directors has appointed computer share trust company to serve as inspector of elections for the meeting computer share has taken and signed an oath as inspector of election and has certified that starting on august 13 2020 the proxy material or a notice of internet availability of the proxy material were mailed or provided to all tesla stockholders of record as of july 31

2020 we have a majority of the outstanding shares represented at the meeting so i declare that there is now a quorum present at the that we may proceed with the meeting the items on the agenda are as follows the election of three class one directors elon musk robin denholm and hiromichi mizuno to each serve for a term of three years two to approve tesla's executive compensation on an advisory basis and three to ratify the appointment of

Pricewaterhousecoopers llp as tesla's independent registered public accounting firm for the fiscal year of 2020. tesla's board has recommended that our stockholders vote for each of the director nominees and for each of those proposals in addition we have also received four stockholder proposals as described in the proxy statement i would like to remind our stockholders the tesla's board has prepared a statement in opposition to each of these proposals which appear

In the proxy the first stockholder proposal is an advisory vote regarding paid advertising our board has recommended that our stockholders vote against this stockholder proposal this stockholder proposal comes to us from james danforth however mr danforth has notified us that neither he nor his representative will be presenting the proposal at the meeting today so we will continue the second stockholder proposal

Is an advisory vote regarding simple majority voting and our governing documents our board has recommended that our stockholders vote against this stockholder proposal the proposal comes from james mcritchie who is on the line to present the proposal today mr mcritchie i would like to invite you now to present you'll have three minutes i'd like to thank the board for holding such an innovative hybrid meeting during these difficult times proposal number five basically asks

For a majority voting stand individual directors accountable every three years and third shareholders cannot call special meetings nor can act by written consent i hope you will agree corporations should not be democratic free zones vote for proposal number five so that 33 percent of shares cannot overrule the wishes of 67 percent thank you thank you mr mcgritchy we'll now move on to our third

Stockholder proposal which is an advisory vote regarding reporting on employee arbitrations our board has recommended that our stockholders vote against this stockholder proposal this proposal comes from nia impact capital whose representative kelly hall is on the line to present the proposal today ms hall i'd like to invite you to go ahead and present you'll have three minutes hello my name is dr kristin holt and i'm the founder and ceo

Of nia impact capital i formally moved proposal fixed this resolution requests that tesla's board of directors oversee the preparation of a report on the impact of the use of mandatory arbitration on capitol employees and on its workplace culture the report will evaluate the association of tesla's current use of arbitration with the prevalence of both harassment and discrimination in its workplace and on employees ability to seek redress should harassment or discrimination occur this proposal speaks to the

Widespread experience of discrimination in the workplace by black latinx and female employees despite this discrimination being unlawful under the civil rights act of 1964. tesla has faced a number of serious allegations of racism and sexism at its buffalo and fremont plants companies that allow bias discrimination and harassment in their workplaces are at risk for unnecessary legal brand financial and human capital issues support for this resolution is warranted

For the following five reasons one research shows that companies benefit from diverse and inclusive workplaces two corporate policies that allow harassment and discrimination risk investors capital three the use of arbitration exposes investors to an unknown level of risk four broad concerns exist with respect to fair treatment in tesla workplace and tesla employees have alleged harassment and discrimination on the basis of both race and gender tesla a company investors love for its

Innovation leadership and wise mode is increasingly lagging behind its peers and its disclosures related to workplace diversity equity and inclusion unlike the forward thinking and innovation in its extraordinary product lines tesla has not shown proactive leadership in building a positive company culture or in addressing concerns about its workplace practices in these material issues crossover lags behind its technology and automotive

Competitors the use of arbitration limits employees remedies for wrongdoing precludes employees from suing in court and often keeps underlying facts misconduct or case outcomes secret therefore preventing employees from learning about and acting on shared concerns simply stated arbitration allows bad corporate behavior like bias harassment and discrimination to continue hidden from employees and investors to maintain tesla's wide vote it is essential

That the board seriously assessed the implications of the use of arbitration and that tesla began to seriously take seriously the need to ensure a fair equitable positive and inclusive workplace thank you thank you miss hall our fourth and final proposal is an advisory vote regarding reporting on human rights our board has recommended that stockholders vote against this proposal this proposal comes to us from the sisters of good shepherd new york

Province whose representative terence collinsworth is on the line to present today mr collingsworth i would like to invite you to speak now you have three minutes for your proposal thank you i'm terry collingsworth executive director of the international rights advocates i'm here representing the sisters of good shepherd new york province to present item 7 on human rights disclosure which calls upon tesla to issue a report to describe board oversight of human rights and

Its human rights due diligence process including systems to provide meaningful remedies when human rights impacts occur tesla faces serious human rights issues and failure to establish a culture of respect for human rights will expose tesla to to new liability issues and significant reputational injury all of which will have a material impact on the company and its shareholders the need to set a new course for human rights compliance at tesla is glaring here are five examples of human rights

Violations occurring now in tesla's operations racism sexual harassment and disregard for human safety and dignity harm workers at the gigafactory 2 in buffalo new york every single day and those workers urge you to remember their experiences in your vote tesla has experienced serious labor relations issues at his production facilities and is actively discouraging union organizing workers are being exposed to cobit 19 and then are facing retaliation when

They ask for greater protections there are numerous worker health and safety violations as well as wage and hour issues and finally there are serious even deadly human rights violations occurring in tesla's global supply chains on this last issue my organization brought the pending suit against tesla for using cobalt mined in the democratic republic of congo by young children i personally met young boys who lost limbs or were paralyzed in cobalt tunnel

Collapses tesla sources cobalt from these very minds and its claimed to have quote zero tolerance for child labor in its supplier code of conduct is simply not true tesla is not only tolerating child labor in its cobalt supply chain it is tolerating the death and maiming of young child minors this demonstrates why the company must circle back and begin a process to report on his treatment of human rights issues as

Requested in this proposal i think consumers will have zero tolerance for a company that is exposed as being indifferent to killing and maiming child miners we are hopeful that tesla's innovative spirit can be brought to bear on making human rights a priority at the company for example if elon musk cared about implementing a zero tolerance child labor policy instead of having a useless paper policy tesla could employ satellites or drones at every mine it sources from to

Actually monitor child labor i encourage all tesla shareholders to vote for item seven human rights disclosure thank you for your attention thank you mr collinsworth at this time i'd like to thank our stockholders for all of their active participation in today's meeting and for those who just presented on the line i'd also like to read some of the comments that have been submitted by you over the course of the meeting the first

Comment comes from michael overbaugh i take great pride in the fact that we haven't had to stoop to the level of what advertising represents to get get where we are today i'd hate to give in to that kind of temptation now when we're so close to becoming a household name that's based solely on our merit alone but if assets do end up having to be set aside for marketing i'd like to suggest that rather than shoving ads down the customer's throats we establish some sort of hardcore

Nationwide campaign and event with the goal of getting as many people as possible behind the wheel of a tesla for an introduction drive it's well known how far just doing that alone goes to converting people into fans a line i recently ran across says you can talk all about the specs as much as you want but when it comes to buying a car what ultimately puts butts in seats is the feeling that the vehicle gives you by demonstrating the tesla clearly has both the specs

And the feeling what more needs saying our second comment comes from the united steelworkers on behalf of the clean air now coalition of western new york by sabrina liu proposal and it reads as follows proposals 6 and 7 up for vote this year are the results of widespread concern about mistreatment of tesla workers at u.s factories and across the supply chain it is clear that tesla is not interested in addressing the harm they have caused to their workers as their board is advising shareholders to

Vote against the proposal we're urging all shareholders to vote in favor of proposals six and seven and on behalf of our workers at the united steelworkers here in western new york and for tesla employees across the country and across the globe the global supply chain while this doesn't repair the harm that's already been caused to countless employees nor repair harm to children and communities forced into

Slave slave labor in the drc they represent steps towards a more just workplace in tesla this concludes all the comments thank you all for your participation in the comments we'll now have a final opportunity for any of you to submit proxies in order for them to be counted so i'll pause and wait for a moment for you to do that okay i declare that the polls are now closed so based on the proxies that we have previously received

I'd like to announce on a preliminary basis that our stockholders have approved the recommendations of tesla's board on all agenda items other than the stockholder proposal for an advisory vote regarding simple majority voting in our governing documents after the final tabulation is completed we'll formally announce the results of the voting by forming filing a form 8k with the sec within four business days of today

This now concludes the official business of tesla's 2020 annual stockholders meeting which is now adjourned next we will have a company update and a year in review presented by elon and then we will start our battery day event during the course of those following sessions we may discuss our business outlook and make forward-looking statements such statements are predictions based on our current expectations actual events or results

Could materially differ due to a number of risks and uncertainties including those disclosed in our most recent 10-q file with the sec these forward-looking statements represent our views as of today they shouldn't be relied on after today and we disclaim any obligation to update them after today as well we will now continue the company update and year in review and it's my pleasure to introduce tesla co-founder and ceo mr elon musk hey everyone

Well i mean this is definitely a new approach we've got the the tesla drive-in movie theater basically um it's good to see everyone it's a little hard to read the room uh with everyone being in cars but it's uh it's the only way we could do it so hopefully it's cool and hopefully you can hear me can you guys hear me okay all right great all right well thanks for coming um i think it's been it's been an incredible year um and uh i'd like to thank you for your

Support uh through uh you know tough times good times it's been great i really appreciate everyone who's put their hard-earned money into tesla and uh you know i think it's worked out pretty well this has been a good year and i think uh there's many good years to come so i'll go through the uh the sort of the shareholder presentation i think fairly quickly because

The the sort of real main event here is battery day so and and really i'm i'm just going through a recap of of what's happened over the past uh year or so um i think starting from uh you know in terms of our ability to create a factory uh the uh you know huge kudos to the tesla shanghai team for being able to go from literally a dirt pile to volume production in in 15 months it's like damn yeah um

So and and i think something that's quite that's really quite noteworthy here is tesla is the only foreign manufacturer to have 100 owned factory in china so this is often uh uh not well understood or not appreciated but to have uh the only 100 owned uh foreign you know foreign factory in china is is a really big deal um and uh it's it's paying huge dividends here so uh we really wouldn't have the results that

We have had this year without the the great efforts of the tesla china team so i'm super appreciative of that um and we'll see the shanghai factory continue to scale uh quite a bit from where it is right now i think we really could expect that to be over time a factory that produces over a million vehicles a year yeah that's cool so let's see so we also reached in the past year volume production of the model y and this was the smoothest launch that

We've ever had so i think we're we're definitely getting better at new vehicle launches and building factories and scaling production i as you've heard me say before it's the hardest thing is scaling production especially over new technology it's insanely difficult uh making a prototype is is relatively easy and if i think like what is the real achievement of tesla in in sort of car company terms it's like it wasn't making sort of

Exciting prototypes it was that tesla was really the first company in about a century in the us the first u.s company in the us to reach volume production uh and be sustainably profitable like the the crazy thing is this has really not happened in a hundred years that's the that's the actual super hard part um and we now have four vehicles in volume production s3 xy so also the toughest joke uh i think maybe ever there was a very

Difficult joke to make so we also introduced the lowest cost solar in the us that's only a dollar forty nine a what um and we really just simplified the whole chain of the whole value chain so reduced sales and advertising um got rid of a bunch of unnecessary costs and really uh are just relying upon the fact that it is it's it's just the lowest cost most efficient solar in the us uh providing both uh retrofit and the solar glass roof

Uh which i think is a really great product a hard product to make work but it will be a major product line in the future and uh we also got four consecutive quarters of of gap profitability which is was was very difficult so and certainly a testament to the the hard work of people at tesla um i mean to to do this in extremely difficult times against a wide range of adverse circumstances uh was uh insanely hard but we got it done

So and i think we've the future is looking like i think very promising uh from uh sort of an annual profitability standpoint so um in in order to achieve in order to to sort of do well financially you really need economies of scale um and you need ideally the best technology and i think we we had the best technology for a while but now we are also achieving economies of scale so and we're also rapidly improving autonomy which is um a massive value add

To each car so you know i think the the value of tesla is going to be like total just on the vehicle side total vehicles produced times the value of autonomy that's that's a way to think about the future value of tesla we also have consistent free cash flow generation uh this is really important for growth and a key element here is tightening up the time from when a car is ordered to when it is built and delivered um so

For a company that is growing rapidly it's extremely important to tighten the supply chain and to to have from when from when parts arrive put it into a car very quickly and deliver the car very quickly to the customer and if if you can do that inside the the sort of your kind of payables timeline then the faster you grow the more cash you have or conversely if you're unable to do it within your your payables timeline

Uh the faster you grow the less money you'll have which is obviously bad um it's for a capital intensive situation so just tightening up and having the parts move very quickly to the factory put in a car get it to a customer makes a massive difference to cash flow generation and i mean that's why it's extremely important to have a factory in each continent because if you don't at least have a factory in the continent it is impossible to achieve this so having a

Factory in china that's able to serve china and then uh you know soon uh many many other countries in the region will be key to us um tightening that uh that total sort of chain of cash flow and and getting it essentially the faster we grow they have more cash this is really important um that's also why it's important to have a gigo berlin complete because then we'll have a factory in china factory factory in the u.s and soon a second

Factory in the u.s and austin um and a factory in europe um and and i mean even if you if for for the for giga texas in austin uh even if we had exactly the same classes in california it would still be advantageous to to do it there because it's roughly two-thirds of the way across the u.s so uh in terms of delivering cars to the central us and to the east coast uh it's far it's just faster cost less um and um it fundamentally improves our

Economics so i think this is also maybe something that's not fully appreciated of just how important it is to have a factory at least on the continent or reasonably close to where the end customers is so you can tighten that that that whole chain uh industry performance uh we've um you know while the rest of industry has gone down uh tesla has gone up um i think this speaks to thanks um and so i'd like to thank all the customers for for taking a chance on tesla and

And buying our product and i really hope you're enjoying it um this is really you know our sales as elle was saying really grow by word of mouth so this is really i think a very pure uh you know it's very pure in the sense that it's like it's it's growing on the basis of existing owners recommending it to other to to new customers this is really i think a good way to grow um so um and then in 2019 we had 50 growth um and i think we'll do really pretty well in 2020 um

Probably somewhere between 30 to 40 growth despite uh a lot of very difficult circumstances um i mean there's so many you know pandemic wildfires it is like a whole bunch of difficult uh production issues um but thanks to the hard work of the tesla team and a lot of innovative approaches to overcoming issues uh we're able to still see significant growth in one of the most difficult in fact i say probably the most difficult year of tesla's existence

So and we also published our extended impact report um tesla we we try very hard to do the right thing um if what i think does not happen is just because we we maybe made a mistake or we're aware of it but we we always try to do the right thing as to the best of our ability and uh and then we published the extended impact report to show you know just a sort of a self-examination of okay what are we doing right what are we

Doing wrong uh what can we do better in the future um you know we're definitely trying to accomplish the most good and so you know if we if we occasionally make a mistake we work quickly to fix it and do the right thing so you know it's worth looking at like the average like average lifestyle emissions in the u.s and just how how much better a tesla is than or an electric car than any other um any kind of gasoline car and uh what we'll talk about in the

Battery day is also just how much the the grids around the world and actually especially in the u.s are greening um it's it's actually much faster than i think people realize uh the us is moving towards sustainable energy and so as we move more and more to sustainable energy then effectively you end up building the the solar factories and the uh the uh car factories themselves with with solar um over time you do or with sustainable energy over time you'll even mine with sustainable energy and eventually it will it will get to

An effective emissions of zero so that's that's that's where things will end up yeah so um we also have safety at the core of our design uh the tesla cars are the safest cars uh ever designed we have the lowest probability of injury of any cars uh ever tested by the us government and that's just passive safety when you add uh active safety into that uh it's even better uh so um you know it's really if if you you know if safety is

Important to you which obviously you know it is uh the the safest car you could drive is a tesla so um you know i think people sometimes some people aren't aware of this but it's really the safety is paramount it is actually the number one design objective when we build the tesla's safety um our factories are also becoming safer and if you look at the sort of accidents per vehicle total vehicle made it's dramatically better than in the past and uh it's already better than industry

Average and we're confident we can get it to the best in the in the auto industry uh autopilot functionality continues to improve um and you can see it in the you know the the the safety report that we publish every quarter um it's just getting better and better uh the u.s average for collisions is um you know at roughly 2.1 per million miles and with autopilot engaged it's 0.3 i mean this is a profound difference really

Massive and this will get even better so uh we're confident that over time we can get the probability of of an accident especially the probability of of injury uh to uh ten times better than than the uh the industry average i can order magnitude better so that's just a lot of life saved and a lot of injuries avoided so that's a you know a huge priority for us um and um you know autopilot front uh i think it's kind of hard for people to judge the progress

Of autopilot um like i i'm i'm driving i as a matter of course i've always done this i drive the the bleeding edge alpha build of autopilot and so so i sort of have insight into what is going on um and um you know previously about a couple years ago we were kind of stuck in a local maximum so we were improving but like the the improvements kind of started tailing off and not and just not getting where where they needed to be

Um we were quite cooler scared still getting trapped in a local maximum and so we had to do a fundamental rewrite of the entire autopilot software stack and and all of the labeling uh software as well so we're now um labeling in 3d uh video so this is hugely different from the previously where we were labeling essentially a bunch of uh single images uh from the eight cameras and they would be labeled um at different times by different

People and some of the the labels you literally can't tell what it is you're labeling um so it basically made it sort of in some cases impossible to label um and the labels had a lot of errors now with our new labeling tools we label it in video so we actually label entire video segments and the system so so you get that basically a surround video uh thing to label and uh with the surround video and and with time so it's now it's now taking all

Amazon cameras simultaneously and and looking at how the images change over time and labeling that um and then the sophistication of the neural nets in the car and the overall logic in the car has improved dramatically um i think we will hopefully release a private beta of of autopilot of the full self-driving version of autopilot in i think a month or so uh and then people will really uh understand just the magnitude of the change it's profound

Um so yeah um anyway so you'll see it's just like a hell of a step change but because we had to rewrite everything labeling software the just the entire code base um it took it took us quite a while um and the the sort of new sort of a call of like 4d in in the sense that it's uh three dimensions plus time um it just it's just taken us a while to rewrite everything um and so you know you'll see what it's

Like it's gonna be it's amazing um yeah it's just it's clearly gonna work um you know tesla core competencies we've got engineering obviously um also manufacturing i think manufacturing is uh underappreciated in general um and uh and the the difficulty of designing the machine that makes the machine is vastly hotter than the machine itself so you know the the designing like making a model three or more or cyber truck prototype is is really quite trivial

Compared to uh designing the factory that makes it especially if you're if it's new technology and you want to use new manufacturing methods um it's just at least 10 to 100 times harder to do the factory than the prototype and that's why you see a lot of companies out there or startups they'll bring out a prototype but they they just can't get it over the hump for um for manufacturing because manufacturing of new technology especially

Is the hardest thing by far you know like basically the prototype is somewhat it is at best ten percent of the difficulty and probably closer to one percent uh and then software tesla is both a hardware and a software company so um a huge percentage of our engineers are actually software engineers and you can think of our car as kind of like a laptop on wheels um and so software is incredibly important and so not just actually not not just in the in the car but also in the in the

Factory so this the factory software is extremely important um just software in general these i mean these are fundamental these are the three critical areas that um are needed to make for an awesome company so yeah so we have now we'll soon have three factor three new factories incremental on well we have one already on three different continents uh shanghai we're expanding the shanghai with the second phase

Berlin is making rapid progress and texas is making even faster progress so um yeah with each factory what we're trying to do is also improve the manufacturing technology so it's um you know in some cases like the model y made made in berlin might look the same but it actually is made in a much more efficient way and uh yeah i'll we'll talk about that later in the battery uh presentation yeah it launched mega pack it's a three megawatt

Hours all-in-one energy storage solution so it's been it's been great overall um yeah all right uh and i think that's basically it right all right thank you all right well uh thanks everyone uh for coming and we're back in a little bit to uh go through the battery stuff and there's a little bit more in addition to the battery stuff we got a little few extras as well so i think you'll really like what we have to say on batteries

The the battery the battery stuff we're going to talk about is is truly revolutionary and essential to uh to tesla's goal the fundamental the fundamental good of tesla it's like if you look back in history and say what what good did tesla do um the good will be to what you know by how many years did we accelerate sustainable energy that's like the true metric of of success um you know it matters if if sustainable energy

Happens faster or slower and and so that's really like how i think about tesla and how we should you know sort of assess our progress you know how by how many years did we accelerate sustainable energy and what we're going to talk about with batteries and a few other things will really explain how we're going to make a step change improvement in the acceleration of sustainable energy thank you hi folks that was great we're going to take a short break before we begin the

Battery day event so stay tuned if you're local and here in the audience today you can feel free to get out of the cars and stretch your legs but try to stay near the cars because we're going to begin promptly in a little bit see you soon all right hello everyone sure thanks elon oh hi i'm drew baglino svp of powertrain and energy engineering at tesla and i'm incredibly excited to talk about what we've been doing at batteries here at tesla

Great um so let's see you've got the clicker yeah okay let's let's yes i'll take it first perhaps sure um so obviously the the issues we're facing are very serious uh you know with the climate change and um we're experiencing these issues on a on a day-to-day basis um it's incredibly important we accelerate the sustainable energy uh time really matters uh this presentation is about accelerating the time to sustainable energy

So the past five years are the hottest on record um we have what looks like a wall for co2 ppm um it's obviously you know this time is not like the past uh it's it's really important that we take action um running this climate experiment is insane so especially when it's just a transitory one anyway yes we're gonna run out of these fossil fuels let's just move to the future and not run this experiment any longer yeah

You got it okay um so anyway the so there is a lot of good news though um uh the what a lot of people may not be aware that that wind and solar comprise 75 percent of new electricity capacity in the us this year so this is a really major um so the greatest the grid is going sustainable uh very very quickly um now it's also worth noting that the length of time the power plants last is

On the order of 25 years so uh even if 100 of energy generation was sustainable it would still take 25 years to convert the grid um and and it's also worth noting that in the past 10 years uh power production from coal has dropped in half so it went from 46 of electricity in 2010 to 23 in 2020. so this is a massive improvement so good things are happening on a lot of levels which need to go faster um so in terms of tesla's contribution

We've delivered over a million electric vehicles 26 billion um electric miles driven uh and uh many gigawatt hours of stationary batteries uh 17 terawatt hours of solar generated so um i think solar is sometimes uh underweighted at tesla but it is a massive part of our future the three parts of a sustainable energy future are sustainable energy generation storage and electric vehicles so we intend to play a significant role in all three uh so to achieve to accelerate

Accelerate the transition to sustainable energy we must produce more uh evs that need to be affordable um and a lot more energy storage uh while building factories faster and with far less investment so goal number one is a terawatt hour scale battery production so terra is the new giga uh and a terawatt is a thousand times more than a gigawatt so uh we used to talk in terms of gigawatts uh in the future we'll be talking in terms of terawatt hours so this is uh

What's needed in order to transition the world to sustainability um yeah and you can see it's a we're talking about 100x growth in batteries for electric vehicles to achieve this mission um and we are going to get there just a matter of how fast and our intention is to accelerate it yeah you basically need on the order of you know roughly 10 terawatt hours a year of battery production uh to transition the the global fleet of of vehicles to electric and the average vehicle lasts 15 years so we're talking

About 150 terawatt hours give or take to transition the whole electric all vehicles of all types uh uh to electric yeah so it's a lot of batteries basically um and um yeah so and then on the grid side uh we have a similar mountain to climb sixteen hundred times growth from today's grid batteries to go 100 renewable on the grid and to take all the existing heating fossil fuel uses in homes and businesses 100 electric yeah and and this this

Number i think i might grow even more depe you know as the world economy uh matures and as uh countries with high populations industrialize uh we could see this number be even more but let's say it's like roughly uh 20 uh to 25 terawatt hours per year sustained uh for 15 to 25 years to transition the world to uh renewable this is a lot yeah so today's batteries can't scale fast enough uh they're just too small for gig in nevada 150 gigawatt hours per

Year is like what we probably expect to to make out of there but this is really pretty small in the grand scheme of things that's only 0.15 terawatt hours and they cost too much so we would need 135 fully built out nevada gigafactories to achieve 20 terawatt hours a year it's not scalable enough of a solution we need a dramatic rethink of the cell manufacturing system to to scale as fast as we can and should yeah and i think we should view this as as more than just a question of money

Money's sort of like an ethereal thing but it's really the amount of effort you have a certain amount of of effort um in terms of people and machines and depending on on how efficient that that effort is um you know for a given amount of effort you you want the most amount of batteries so it's not just a question of like well if we had two trillion dollars you tomorrow you could make this it's it's not that easy um you actually need to organize a

Massive number of people build a lot of machines build the machines that make the machines um and so it's incredibly important to uh have that effort uh yield the most number of batteries so and then go to obviously we need to make more affordable cars um the uh you know i think one of the things that troubles me the most is that we don't yet have a truly affordable car um and that that is something that we will make in the future

Uh but in order to do that um we've got to get the cost of batteries down we've got to make uh and we've got to be better at manufacturing and and we need to do something about this curve this cur the curve of of the cost per kilowatt hour of batteries is not improving fast enough um so we give we've given us a lot of thought over many years uh to say okay how can we radically improve the the cost per kilowatt hour curve um

It's been somewhat flattening out actually in recent years i mean early growth was promising but you can see we're kind of plateauing so that's that's what's motivating us to to rethink how cells are produced and designed yeah exactly so so um yeah and eb marketer is growing but eb's yeah aren't still aren't accessible to all um it's it's and and you can see as jew were saying it's like starting to flatten out a little bit because uh the rate of improvement of

The affordability of cars is just not fast enough so that's why we got battery day yeah to make the best cars in the world we design vehicles and factories from the ground up next yeah and now we do this for batteries as well yeah it's where the the slides don't show up quite right this what shows up on the screen it's not quite what shows up there anyway okay it's a different yeah i think it's because that's yeah that one's current supposed to be

So let's get started we have a plan to have the cost per kilowatt hour and it's not a plan that rests on a single innovation some research project that'll never see the light of day it's a plan that has taken creative engineering and industrialization across every facet of what makes a cell into a battery pack from raw material to the finished thing and we're going to go through that plan with you today step by step and build up how we get to these goals and how we accelerate this transition and make

Our vehicles and our grid batteries more affordable i mean we basically thought through every element of the battery or almost every element there are a few more elements that we won't get to today but we will get to in the future yes so first before we get too far into it let's talk about what is in a battery cell we've got the cap in the and the can negative and positive terminals of the cell when you open that cell you've got a tab connected to those terminals

What we call the jelly roll which is the wound electrodes on the inside you can actually see what this looks like as you unwind it this is over a meter long in a typical 2170 cell so it's quite a long winding process um and and you can see the tab still there um and then what to explain what's actually going on here we've identified we've got anode cathode separator positive and negative terminal watch what happens as we uh there we go discharge the cell got lithium moving from anode to cathode

And then the reverse when we charge the cell anode moving from lithium moving from cathode to anode across the separator this is the basic of what makes all lithium-ion batteries whether they're what no matter what the form factor is and when we look at what what's happened today at least in our products we've moved from the 18650 form factor to the 2170 form factor through great collaboration with our partners panasonic new partners like lg and catal and probably others in the future

Yeah actually so a slight note on on why is the one called 18650 although not on the slide versus the 2170 is that the the first two digits refer to the diameter and the second two digits refer to the length so that that helps explain why these weird what about what's up with these weird numbers but like nobody could explain to me why there was an extra zero um so i so i said like okay well we're deleting the zero that nobody can explain in future form factors so that's why it's technically

It's like the 18650 bizarrely but going forward it's the 2170 because we just got rid of the extra zero because it's pointless um and this was this was a evolutionary step going from 1865 to 2170 bringing 50 more energy into the cell but when we look to the ideal cell design if we were to do it ourselves uh we need to go beyond just um what we're looking at us in front of us and and study the full the full spectrum of options

So as you can see we we kind of swept the key figures of merit how much we can reduce the cost and how much vehicle range increases as we change the outer diameter of the cell we found a sweet spot somewhere around 46 meters millimeters but it's not just about a bigger form factor like anybody could make a bigger form factor any fool any fool could make a bigger form factor there are we not any fool exactly there are problems as you make cells larger in fact supercharging and thermals in general

Become really challenging as you make bigger cells and this was the challenge that our team uh set our sights on to overcome and we did we came up with this tablets architecture that maybe you've heard about that that basically removes the thermal problem from the equation and allows us to go to the absolute lowest cost form factor um and the simplest manufacturing process

And this is what this is what we mean when we when we talk about tablets it's kind of a beautiful thing uh yeah that's what these that's what these t-shirts mean but it's very esoteric it's like nobody could figure it out but yeah we basically took the existing foils laser-powdered them and enabled dozens of connections into the active material through this shingled spiral you can see with simpler manufacturing fewer parts 50 50 millimeter versus 250 millimeter electrical path length which is how we

Get all the thermal benefits yeah this is important to appreciate like basically the the the distance that that electron has to travel you know it's just much less so uh you actually have a shorter path length in a large table a large tablet cell than you have in the smaller cell with tabs this is a big deal so even though the cell is bigger it actually has uh more power the power to weight ratio is actually better than the smallest cell with with

With halves this is uh you know again like this is quite quite hard to do so it said you know nobody's done it before um so uh and it really took a tremendous amount of effort uh within tesla engineering to figure out how do we make a freaking tablet cell and have it actually work and and then connect that to the top cap and it's uh there's a whole bunch of things that we're you know keeping a little secret source here that we're not telling

Everything um but uh sometimes what's elegant and simple is still hard and we it took us a lot of trials but we're we're happy where we ended up yeah i mean everything's simple in recollection you know after you like everything it's hard until it's discovered and then it's simple um so anyway it's there's a there's a lot of really cool things going on uh that that enable uh tablets and um it's really you know due to a really great engineering team drew and the rest of the team have done

Amazing work in achieving this tablet's construction um and it sounds i think it may sort of sound a bit silly to some people but this was this is like for people that really know cells this is a massive breakthrough for cylindricals to be able to to get rid of the tabs dramatically simplifies winding and coding yeah and has an awesome thermal and performance benefit yeah just to elaborate on that a bit it's like when the cell is

Is going going through the system the system it it has to keep stopping where all the tabs are yes so you can't do a contain you can't do continuous motion uh production uh if you have tabs you have to keep stopping and then there's a rate at which you can start and stop and accelerate again and and really slows down the the rate of production and then sometimes you get the tabs wrong um and you also get lose a little bit of

Of active area it's it's it's really huge pain in the ass to have tabs um from a production standpoint yes um and so when we put it all together and go to our new 80 millimeter length 4680 we call this new cell design we get five times the energy with six times the power and enable 16 range increase just form factor alone uh yeah so these it's pretty great and just just to clarify that when we see these um plus six 16 or whatever the

Percentage ratio increases these are the amounts due just to that particular innovation yes so we'll list a whole bunch of innovations and then when you add them up you get a total of improvement in energy density and cost but these numbers are are what refer to just this thing yeah and i want to stress this is not just a concept or a rendering we are starting to ramp up manufacturing of these cells at our pilot

10 gigawatt-hour production facility just around the corner yeah so yeah it's a video of uh some of what's going on in the plan um now i mean to be clear it will take about a year to reach the 10 gigawatt hour capacity uh so this is important to appreciate like when you build a factory there's a certain capacity that you design to and then it takes some period of time to actually achieve that capacity so i would say

It's probably about a year before we get to the 10 gigawatt hour annualized rate uh with the with the pilot plant and this is just a pilot plant uh the the actual production plants will be more on the order of uh you know maybe 200 gigawatt hours maybe more over time and thank you um but but let's stack up everything we just saw at the cell level so just the cell form factor change enables a 14 dollar per kilowatt hour reduction just

That cell form factor change and now that you've been teased on this factory we're going to go on and walk step by step through that factory and and discuss a series of of innovations there when thinking about the ideal cell factory we have inspirations uh behind us in the paper and bottling industry where from humble beginnings over a century of innovation has enabled mass scale continuous motion unbelievably low manufacturing cost and when we think about the lithium ion

Industry which is really only in its third decade of high volume production it has so far to go to to achieve similar scale and simplicity and that that was the inspiration that we set out to the team as we thought about how to marry cell design and manufacturing in the best possible factory and let's talk a little bit about what's in a cell factory first there's an electrode process where the active materials are coated into films onto foils then those foil

Coated foils are wound in the in the winding process we just talked about where if you do have tabs you have to start and stop a lot then the the jelly roll is assembled into the can sealed filled with electrolyte and then sent to formation where the cell is charged for the first time and and where the sort of the electrochemistry is set and the quality of the cell is verified and we set out at every step of this process

To try to take that inspiration we just showed and and think about how we make those processes fundamentally better and more scalable and one of the most important processes is where it all begins the wet process of the of the electrode coating and just to give you all sense of scale i'm gonna walk through what's in that wet process you've got mixing where the the powders are mixed with either a water or a solvent

Solvents for for the cathode that mix then goes into a large coat and dry oven where the slurry is coated onto the foil you know huge ovens tens of meters long dried and that solvent then has to be recovered you can see the solvent recovery system and then finally the coated foil is compressed to the final density and when you're looking at this you're like wow that's a lot of equipment for one step

Especially when you consider that little speck next to the coating oven is a person this is serious serious iron involved in making batteries wouldn't it be great if we could skip that solvent step which is one of those dig a ditch and then fill it kind of things where you put the solvent in and then take it out and recycle it and just go straight to dry mix to coat and that's what the dry process really is about

And in the most basic form you can see it here on a bench top literally powder in into film as simple as that i mean it's hard actually just to be clear uh so you know if this was easy everyone would do it so the it's not like uh dry coating electrode is is actually uh easy it's it's it's it's actually very hard to do what appears to be a simple thing um and it's it's worth noting like um you know we did acquire maxwell as like a little over a year ago i guess

Um and you know it's certainly a good company and everything but the the the dry coating they had was like it's like sort of i was called proof of concept uh since the acquisition we've we've actually uh revved the the machine that does dry coding four times so we're in revision for post acquisition of the machine and there's still a lot of work to do so i would not say this is like completely in the bag it's still a lot of work to do

And you know as you go as you scale go from like bench top to lab to uh pilot to volume production uh there are actually major issues that you encounter it at every level it's not like you know you make something work on your on your bench and bingo now you can make a brazilian of it it's absolutely it's insanely difficult to scale up um yeah yeah but if you do scale it up yeah what what you saw before becomes this yeah so you can see the motivation a 10

Times reduction in footprint a 10 times reduction in energy and a massive reduction in investment um but as elon was saying simple is hard yeah um yeah i mean to be clear i would like to not say that right now it's just totally working it's it's it's close to working but it's not even now it at the pilot plant level it is close to working well i see okay like it's fair to say it probably it does work but with not a good not a high yield yeah so we're still

Ironing out the kinks but we've made tens of thousands of cells thousands of kilometers of electrode i mean we are on the fourth generation of the equipment so we've learned a lot along along the way yeah i mean it is super demanding because every atom has its place if you want to deliver the energy density and the cycle life and the supercharging yeah but we're but we're we're confident that we will get there but it will be a lot of work along the way there's a clear path to success but a

Ton of work between here and there yeah so but this is a really profound improvement again for people that know battery uh manufacturing this is a this is gigantic um we'll probably be on on machine revision six or seven by the time we do large scale production um the rate at which the machines are being improved is extremely rapid like literally every three or four months is a new rev yeah and beyond the electrode we we continue to innovate on every other process step so let's talk a little bit about

Assembly which is next the key to a high performing assembly line is accomplishing processes while in motion continuous motion uh and thinking of the line as a highway max velocity down the highway no start and stop no city driving exactly no stop lights and traffic lights or anything you want the highway i want the highway yeah and together with our internal design team that makes this equipment and designs this equipment we coupled

Thinking about how to make the best sell with thinking about how to make the best equipment so that we could accomplish the fastest parts per minute rates on all of these tools um and through all of that development we were able to get to the point where we can uh implement assembly lines one line 20 gigawatt hours seven times increase in output per line and when you're thinking about scalability and pure effort having one line be 7x the

Capability is just effort multiplying yeah so yeah you can sort of think about like the sort of the fundamental physics of a factory or something like um i think it's actually quite a lot like the rocket equation uh where uh you've got basically the equations you've got your exhaust velocity and then the log of the start end masses so it's basically saying you know how fast are things going and what percentage of your

The factory volume is doing useful work and conveyance does not count as useful work so only the value added steps yeah if you if you break the factory down into uh cubic meter sections um and say uh or smaller could be like one you know one liter sections and say uh is a majority of this volume doing useful work you would be astounded at how bad most factories are they're like maybe two or three percent including a factory in fremont

Um so i i think it is possible to get to at least uh 10 times that of volumetric efficiency uh so more like you know 30 percent uh ish maybe more um and be 10x better which means the factory can be 10 times smaller and then the other thing is how fast are things going through through the factory it's like speed and density um the the the faster you go like if a factory that's moving at say twice the speed of another factory is equivalent to two factories

Basically and the the company that will be successful uh is the company that with one factory can accomplish what other companies take two or three or four factories to do so this is what we're trying to do here is say okay how do we uh whether with one factory achieve what maybe five or even ten factories would normally be required to achieve and and the vertical integration with the machine design teams at you know groman and and and high bar

And others allows us to really accomplish that because we don't have any of these edge conditions between one piece of equipment and another we can design the entire machine to be one machine and remove all these unnecessary steps yeah i mean basically tesla uh is aiming to be the best at manufacturing of any company on earth uh this is the thing that's actually most important in the long run i think um you know just from a company standpoint and from

Basically um achieving sustainability as fast as possible but i think also for long-term competitiveness um eventually every every car company will have long-range electric cars um i you know eventually every company will have autonomy i think but not every company will be great at manufacturing uh tesla will be absolutely head and shoulders above anyone else in manufacturing that is our goal manufacturing is hard and hard problems are fun to solve

Okay now let's talk about formation in a in a typical cell factory formation represents 25 percent of the investment and what is formation it's it's charging and discharging cells and verifying the quality of the cell turns out we've charged and discharged billions and billions of cells in our vehicle so we know a thing or two about that the typical formation setup is you charge and discharge each cell individually in our car we charge thousands of cells at once and we took our

Principle and our power electronics leveraging power wall vehicle battery management systems and others to dramatically improve the the formation equipment uh cost effectiveness and density 86 reduction in formation investment 75 reduction in footprint so you want to take this one uh sure so essentially what this translates to based on what we know today is about a 75 reduction uh in the investment per kilowatt hour uh okay what hour

It's it's just uh basically four times better than the current state of the art to the best of our knowledge uh and uh i think there's probably room to improve even beyond that definitely definitely yeah um so uh we're able to from a volume standpoint actually get what um in in a smaller form factor than gigan nevada uh we were able to get uh many times the the uh cell output so uh you can see like basically we can get a terawatt hour in in less space than it took to make a

Gigawatt hour uh you know 150 gigawatt hours so this is pretty profound you know it's like i would actually not have thought this was possible uh several years ago um that we could actually get to terawatt our scale in less in less space than uh what we currently envision for doing 150 gigawatt hours yes simpler accelerates terawatt hour scale and that's what we need to do to accelerate our mission um and you know as elon said we're going to try to even

Improve on this as we push towards our goals which are yeah so this this is just for uh this is just talking about uh tesla internal cell production um as i tweeted out earlier we will continue to uh use our cell suppliers the panasonic and uh lg and catl um and so this is a hundred gigawatt hours supplemental to uh what we buy from suppliers um and uh yeah essentially this this does like

Reduce our weighted average cost of a cell because uh if it but it does it allows us to make a lot more cars and a lot more stationary storage and um and then long term we're uh expecting to make on the order of uh 3000 gigawatt hours or or three terawatt hours per year um i think we can we i think we've got a good chance of achieving this actually before 2030. but i highly confident that we could do it by by 2030. when you look at the size of that factory on the previous page

It really shows how enabling all these advancements are in achieving a three terawatt hour goal by 2030. and not only is all of that manufacturing innovation fantastic for enabling scale it's also an additional 18 reduction in dollar per kilowatt hour at the battery pack level but wait there's more but wait there's more yeah so we have a manufacturing system we've got a cell design what are the active materials we're gonna put in that cell design

Let's talk about the anode first let's talk about silicon why is silicon awesome it's awesome because it's the most abundant element in the earth's crust after oxygen which means it's everywhere it's sand yeah um sand is silicon dioxide yeah and it happens to store nine times more lithium than graphite which is the typical anode material in lithium ion batteries today so why isn't everybody using it the main reason is because the challenge with silicon is that it

Expands 4x when fully charged with lithium and basically all of that expansion stress on the particle the particles start cracking they start electrically isolating you lose capacity the energy retention of the battery starts to fade and it also gums up with a passivation layer that has to keep reforming as the particles expand yeah basically with silicon the cookie crumbles and gets gooey that's basically what happens good analogy yeah um and

Current approaches to solve this which exist i mean we have silicon in in the cars that you're all in right now are involved highly engineered expensive materials uh in in the scheme of things now they're still great and they enable some of the benefits of silicon they just don't enable all of it and they're not scalable enough and you can see some of the things that that maybe you've heard of sio silicon with with carbon or silicon nanowires you know that's kind of the space right

Now what we're proposing is a step change in capability and a step changing cost and what that really is is to just go to the raw metallurgical silicon itself don't engineer the base metal just start with that and design for it to expand in how you think of the the particle in the electrode design and how you you code it yeah i'm not sure if you saw those basically a dollar kilowatt hours basically if you if you use simple silicon it's dramatically less

Than even the silicon that is currently used in the batteries that are made today um and you can use a lot more of it the anode would cost yeah with this silicon and the anode costs a dollar and 20 cents a kilowatt hour yeah um and how does it work start with raw metallurgical silicon stabilize the surface with an elastic ion conducting polymer coating that is applied through a very scalable approach um no no no like chemical vapor

Deposition no highly engineered high capac solutions and then integrated in the electrode through a robust network formed out of a highly elastic binder um and in the end by leveraging this silicon to its potential we can increase the range of our vehicles by an additional 20 just this improvement yeah it gets cheaper and longer range yeah and and when we take that anode cost reduction we're looking at another five percent dollar per kilo kilowatt hour reduction at the battery

Pack level and there's more let's talk about cathodes what is a battery cathode cathodes are like bookshelves where the metal you know the nickel the cobalt the manganese or aluminum is like the shelf and the lithium is the book and really what sets apart these different metals is how many books of lithium they can fit on the shelves and how sturdy the shelves are cobalt is a pretty sorry actually like it's it's tough to exactly figure out what the right

Analogy is to explain uh cathode and anode but a bookshelf is probably a pretty good one um in the sense that um you you need you need a stable structure uh to contain the islands um so you want a structure that does not uh crumble or get gooey or basically that that holds its shape in both the cathode and the anode um as you're moving these ions ions back and forth uh you it needs to retain its structure uh so uh if it doesn't retain a structure then you lose cycle life and

Your battery capacity drops very quickly absolutely um yeah i totally agree and and i think people are always talking about like oh what's the cathode going to be is it nca or whatever you know the thing to consider is just fundamentally what the nickel the the metals are capable of and that's what we have on the chart here dollar per kilowatt hour cathode of just the metal using just lme you know london metal exchange prices

Um versus the energy density of just the cathode and you can see nickel is the cheapest and the highest energy density and that's why increasing nickel is a goal of ours and really everybody's in the energy in in the battery industry um but one of the reasons why cobalt has even used it all is because it is a very stable bookshelf and the challenge with going to pure nickel is stabilizing that bookshelf with only nickel and that's what we've been working on

With our high nickel cathode development which has zero cobalt in it leveraging novel coatings and novel coatings and dopants uh we can get a 15 reduction in cathode dollar per kilowatt hour yeah it's a big deal it's not just about nickel you want to yeah sure um so in order to scale uh we really need to make sure that we're not constrained by total nickel availability um i actually spoke with the ceos of the biggest mining companies in the world

And said please make more nickel it's very important um and so i think they are going to make more nickel but there's also uh you know i think we need to have a kind of a three-tiered approach to to batteries um so starting with iron that's kind of like a medium range and then nickel manganese as sort of a medium plus uh intermediate and then high nickel for long range applications like cyber truck uh the semi um if something like like a

Semi truck it's extremely important to have a high energy density in order to get long range so um and and just to give sort of iron a bit um more time like the uh although the you know if you look at the uh white house kilogram at the cathode level of um of iron uh it looks like nickels twice as good uh but when you fully considered at the pack level everything else taken into account uh nickel is about maybe 50 or 60

Percent better than uh than iron so i iron is not is a little better than it would seem when you when you look at it at the uh the pack level fully considered um it's not as good as nickel and it goes like 50 to 60 better uh but it's still it's actually pretty good um and so you know good for stationary storage and for uh medium range applications uh where energy density is not paramount and then like i said for intermediate it's kind of a nickel manganese

And it's relatively straightforward to do a cathode that's uh two-thirds nickel one-third manganese which would then allow of us to make 50 more cell volume uh with the same amount of nickel and with very little energy trade-off yeah just enough to to to have you still want to use 100 nickel for something like a semi truck but but really not much of a sacrifice yeah um and you know beyond the metals

Because a lot of people spend time talking about the metals actually the cathode process itself is a big target 35 percent of the cathode dollar per kilowatt hour is just in transferring it into its final form and so we see that as a big target and we decided to take that on um here's a view of the traditional cathode process effectively if you start at the left and you have the metal from the the mine the first thing that happens is the metal from the mine is changed into

An intermediate thing called a metal sulfate because that's just happened to be what chemists wanted a long time ago and then you and then when you're making the cathode you have to take this intermediate thing called metal sulfate add chemicals add a whole bunch of water a whole bunch of stuff happens in the middle and at the end you get that little bit of cathode and a whole bunch of wastewater and byproducts yeah it's insanely complicated uh if you if you look at the

Total like if you're just like you know it's a small world journey of uh i am a nickel atom what happens to me and it's like it is crazy like you're going around the world three times it's there's like the moral equivalent of like digging in the ditch filling the ditch and digging the ditch again uh it's total madness basically um and these things just grew up as just they're just kind of like legacy things that it's like how it was done before and then they connected the dots

But really didn't think of the whole thing from like a first principle standpoint saying how do we get from uh the nickel oreo in the ground to the finished nickel product for a battery uh and so we've looked at the entire value chain and said how can we make this as simple as possible and that's what we're proposing here with our process as you can see a whole less a whole lot less is going on here we get rid of the intermediate metal water final profit product cathode

Recirculate the water no waste water at all and when you summa summarize all of that is to 66 reduction in capex investment a 76 reduction in process cost and zero wastewater much more scalable solution yeah and then when you think about the fact that now we're actually just directly consuming the raw metal nickel powder it dramatically simplifies the metal refining part of the whole process so we can eliminate billions in battery grade

Nickel intermediate production it's not needed at all yeah um and uh we can also use that same process we showed on the previous page to directly consume the metal powder coming out of recycled electric vehicle and grid storage batteries so this process enables both simpler mining and simpler recycling um and now that we have this process obviously we're going to go and start building our own cathode facility in north america and leveraging

All of the north american resources that exist for nickel and lithium and just doing that just localizing our cathode supply chain and production we can reduce miles traveled by all the materials that end up in the cathode by 80 percent which is huge for cost yeah i mean to be clear cathode production would be part of our the tesla cell production plant so just be you know basically you know uh raw

Materials coming from the mine and from raw materials in mind outcomes of battery and on that note the way the lithium ends up in the cell is through the cathode so then we should obviously on-site lithium conversion as well which is what we will do using a new process that we're going to pioneer that's a sulfate-free process again skip the intermediate 33 reduction in lithium cost 100 electric facility co-located with the cathode plant

Yeah so it's important to note that there is a massive amount of lithium on earth so lithium is not like oil there's a massive amount of it pretty much everywhere so in fact there's there's enough lithium in the united states to convert the entire united states fleet to electric like the all the cars in the united st every vehicle united states can be converted to electric using only lithium that is available in the united states discovered today yeah what we already

Know is exactly people really haven't even been looking yeah people haven't been trying because it's just like widely available so um but it is important to say like okay what is the smartest way to take the ore and extract the lithium and and do so in an environmentally friendly way um and we actually discovered a again looking at sort of first principles physics standpoint um instead of just the way it's always been done um is we found that we can actually use table

Salt uh sodium chloride uh to uh basically extract the lithium from the ore um and uh this is nobody's done this before to the best of our knowledge nobody's done this um and it's a sort of you know all the elements are reusable it's a very sustainable way of of obtaining lithium um and we actually uh we we we actually got uh rights to a lithium clay deposit in nevada over 10 000 acres over 10 000 acres um

And then the the nature of the mining is actually i think also very environmentally uh sensitive in that we sort of take a chunk of dirt out of the ground or remove the lithium and then put the chunk of dirt back where it was so it will look pretty much the same as before and it will not look like terrible and yeah it'll be nice nice so simply mix clay with salt put it in water salt comes out with the lithium done yeah it's pretty crazy yeah

So we're really excited about this and and there really is enough lithium in nevada alone to electrify the entire us fleet yeah that's true actually just what's in nevada that's uh that's basically so much damn lithium on earth it's crazy it's one of the most common elements on the planet um and eventually as we said at the beginning when we get to this steady state 20 terawatt hours per year of production we will transfer the entire

Non-renewable fleet of both power plants home heating and and battery and industry heating and and vehicles to electric and at that point we have an awesome resource in those batteries to recycle to make new batteries so we don't need to do any more mining at that point and you can see why the the the difference in the the value of the of the material coming back from the vehicle versus the ground you'd always

Go to the vehicle and we recycle 100 of our vehicle batteries today and actually we are starting our pilot full-scale recycling production uh at gigafactory reno next quarter to to continue to develop this process as as our recycling returns great yeah i mean to date it's been done by third parties but uh we think we can we can recycle the batteries more effectively especially since uh you know we know our batteries we're making the same battery as the thing we're recycling so uh

Whereas like third-party recyclers have to consider batteries of all kinds yeah and and just to think about what this actually means the recycling resource is always 10 or greater years delayed because batteries last a really long time but eventually it is the way that that all resources will be made available and that's why we're investing in this recycling facility in nevada yeah long-term new batteries will come from old

Batteries uh once the fleet reaches steady state right okay so we just talked about scaling cathode and recycling all of the benefits that you just saw are added to this benefit of a 12 reduction in dollars per kilowatt hour at the battery pack level almost at our have the cost goal but there's one more section take it away elon so um there's an architecture that um we've been wanting to do tesla for a long time and we're finally we finally figured it

Out um and i think it's it's the way that all electric cars in the future will ultimately be made uh it's the right way right way to do things um so it starts with uh having a single piece casting or a single piece casting for the front body and the rear buddy um and uh in order to do this we uh commissioned the the largest casting machine that has ever been made and it's currently working just uh over the road at our uh fremont plant uh

We have the the it's pretty sweet um making the uh entire currently making the entire uh rear section of the car in as a single piece high pressure die cast aluminum and in order to do this we actually had to develop our own alloy because we wanted a high strength casting alloy that did not require coatings or heat treatment this is a big deal for for castings especially with a large casting if you heat tweet it

Afterwards it tends to deform it kind of like does this like potato chip thing so it's very hard to keep a large casting uh to have its shape so in order to achieve this there was no alloy that existed that could do this so we developed our own alloy a special alloy of aluminum that has high strength without heat treat and and is very castable uh so that's a you know a great achievement of our materials team

In fact in general we've got a lot of advanced materials coming for for tesla that new alloys and materials that have never existed before so uh so you're basically making the the front and rear of the car as a single piece um and then that that that then interfaces to uh what we call it the structural battery where the battery for the first time will have dual use uh the battery will both have the use as an energy device and as structure this this is absolutely

The way things are done in in the early days of of aircraft they would carry the fuel tanks as cargo so the fuel tanks um actually had were quite difficult to carry they were like basically worse than cargo you had to kind of bolt them down um it was very difficult and then somebody said hey what if we just make the wing tanks what if we just make the fuel tank in wing shape so all modern airplanes the fuel tank your wing is just a a fuel tank in wing shape this is

Absolutely the way to do it um and then the the fuel tank serves as dual structure and it's not it's no longer cargo it's fundamental to the structure of the aircraft this was a major breakthrough um we're doing the same for cars so so this is really quite profound uh the effectively the the non-cell portion of the battery has negative mass so we save so much mass in the rest of the vehicle we save more mass than the rest of

Vehicle than the non-cell portion of the battery so it's like well how do you really minimize the mass of a battery make it negative make the battery non-cell portion of battery pack negative um so it also allows us to pack the cells more densely because we do not have uh intermediate structure in the battery pack so instead of having these like uh supports and stabilizers and stringers and structural elements in the battery we now have a lot more space in the battery because the pack

Itself is structural um the and what we do is essentially um like what we like we instead of having just um a filler that is a flame retardant which is currently what is is in the three in y battery packs we have a filler that is a a structural adhesive um as well as flame retardant so it effectively glues the cells to the top and bottom sheet and this allows you to do shear transfer between upper and lower sheet just like if you have like a formula one

Uh craft or like a racing boat and you have carbon fiber face sheets and say aluminum honeycomb between them uh this uh gives you incredible stiffness um and it's really the way that any super fast thing works is uh you you create a um basically a a honeycomb sandwich with with two face sheets uh this is actually even better than what aircraft do because aircraft do not do this um they can't do this because fuel is liquid so

In our case the batteries are solid so we can actually use the the steel shell case of the battery to transfer uh shear from the upper and lower face sheet which makes for an incredibly stiff structure even stiffer than a regular car yeah in fact if this was if if this was an in a in a like a a convertible uh that had no upper structure it would be stiffer then that converter will be stiffer than a regular car so this is it's just really how it's a

Pro really major um so it proves the mass efficiency of the battery um and then those castings also quite important because you want to transfer load into the structural battery pack uh in a very smooth continuous way um so you don't um put arbitrary point loads into the battery um so you kind of have to you want to sort of feather the load out from the front and rear into the structural battery um it also allows us to

Uh use uh to move the the cells uh closer to the center of the of the car um because we don't have the the the in the top one we've got that sort of all the supports and stuff so the volumetric efficiency of the structural pack is is much better than a non-structural pack and we actually bring the cells closer to the center um and uh because they're closer to the center it reduces the probability of of a side impact uh potentially contacting the cells because they have

It has to go in any kind of side impact has to go further in order to reach the cells uh it also proves uh what's called the polar moment of inertia uh which is that you think of like when there's a like a ice skater uh arms outer arms in arms in you rotate faster so if you can uh bring things closer to the center you reduce the problem of inertia and that means you can the car maneuvers better it just feels better you don't know why but it just it just feels more agile so it's really

Cool this is really major um like i said so 10 mass reduction in the body of the car 14 range increase uh 370 fewer parts so i mean i really think that that long term and any cars that do not uh take this architecture will not be competitive and it's not just at the product level a better product but in the factory it's a massive simplification you saw the part removal um you know it's casting machines it's

The structural battery pack so we're looking at over 50 reduction in investment per gigawatt hour 35 percent reduction in floor space and we'll continue to improve that as we make the vehicle factory of the future yeah so is major improvements on on all fronts from the cell all the way to the the vehicle um and in addition to the improvements we just said on enabling additional range and improving the structural performance of the vehicle it is worth another seven percent dollar per kilowatt hour reduction at the

Battery pack level bringing our total reductions now to 56 dollars per kilowatt yeah all right so stacking it up we're not just talking about uh cost or range we've got to look at all the facets so range increase we're unlocking up to 54 increase in range for our vehicles and energy density for our energy products 56 reduction in dollars per kilowatt hour at the battery pack level and a 69 reduction in investment per gigawatt hour which is the true enabler

When we talk back about how do we achieve this scale problem here yeah uh and yeah so um i think it's pretty nice that investment per kilowatt for gigawatt hour reduction is 69 i mean who would have thought yeah just happened to happen out that way i mean point four two zero percent of course um yeah so what what this uh enables uh us to do is achieve a new trajectory in the reduction of of uh cell cost and um now to be clear it will take us probably

A year to 18 months to start realizing these uh these advantages and probably to fully realize the advantages probably it's about three years or thereabouts so um you know it's it's not like uh if we could do this instantly we would um but it's it's really um i think what this bodes for it's just really bodes well for the future and means that the long-term scaling of of tesla and and and uh the sustainable energy products that we make will be

Uh massively increased so uh you know what tends to happen as companies get bigger as things tend to slow down um well actually they're going to speed up and they have to speed up if we're going to accelerate the transition to sustainable energy yeah i mean long term we want to try to replace about you know uh at least one percent of the total vehicle fleet on earth which is about 2 billion vehicles so long term we want to try to make about 20 million vehicles a year

But i think it's important to point out that when we talked about three terawatt hours by 2030 the problem is a 20 terawatt hour problem so everybody needs to be uh accelerating their efforts to accomplish these objectives doesn't matter where you are in the value chain there is a ton to do you need to rethink from first principles how you do it so that you can scale to meet all of our objectives yep anyone uh sure what does this mean what does it mean for what does this what does this mean for our future

Products uh so uh we're confident that long term we can design and manufacture a a compelling 25 000 electric vehicle um so you know this this this has always been our dream from the beginning of the company i even like wrote a blog piece about it um because um you know our first car was was an expensive sports car and then then then there's like slightly less expensive sedan and then finally it's sort of a i don't

Know mass market premium but you know like the model 3 and model y um but it really it was always our goal to try to make an affordable electric car and um i think probably uh like i said about about three years from now uh we're confident we can make a very calm uh very compelling 25 000 electric vehicle uh that's also fully autonomous and when you think about the 25 000 price point you have to consider how much

How much less expensive it is to own an electric vehicle yeah so actually it it it becomes even more affordable at that 25 000 price point yeah so we have and extreme performance and range um and uh we should probably talk about the you know model s plaid yeah what about that yeah so uh yeah anyway we we took the latest plaid out to laguna seca on sunday got um a minute thirty um and uh we think

Probably there's another three seconds or more to take off that time uh so uh we're confident the model s plaid will achieve the uh the best track time of any production vehicle ever of any kind two-door or otherwise um and you can order it now uh and it's available uh uh basically end of next year so and now we'll move to q a absolutely so which invite we'll invite

A few people on stage come on up team this is just a small portion of the team but uh it would be great to you know show you some more of the team and um and when we do q a we can like you know give various people different questions to answer sounds great actually i don't know how we're getting the questions actually i don't know either you can maybe get out of the car for two seconds and yell it at us i don't know hey how do we get any questions

Oh they're mics okay wait for them they're mics okay great great all right okay we'll definitely need to give people mics because otherwise there's no way um sorry okay all right we're gonna pass some mics out uh we don't have a name for the 25 000 car yet it's a great question though uh yes uh we will be manufacturing uh sales in berlin yep thermal management system for homes oh oh you mean like the home hvac um

Yeah that i mean that's a pet project that i'd love to get going on um i don't know maybe we'll start start working on that next year um because i just think this man you could really make a way better home hvac system that's really quiet and super efficient and uh yeah super energy efficient and also has like a you know a way better filter uh you know for particles and um uh yeah just and it works uh very reliably

And and we've already developed that for the car like so the the heat pump uh in the model y uh is really pretty spectacular i mean it's tiny it's efficient it it has to last for 15 years uh it's got to work in all kinds of conditions from you know the coldest winter to the hottest summer um so we've actually already done a massive amount of the work necessary for a really kick-ass home hvac and they could also like stack them so if you want to

Say depending upon the size your house or whatever how much you need you can just you can just basically stack them and yeah just have a very compelling super efficient home hvac and then you can also uh communicate with the car and it'll it'll know when you're coming home so it's like oh i don't need to keep the house cold all day i just you know cool it down because i know you're coming home um so the pack can communicate with the car and just like really dial it into when you actually need cooling and

Heating it'd be great fun product yeah who's next hello hey guys eli here uh from test learners club my tesla adventure uh just quick question so i'm a huge fan of car camping in my tesla with my dream case like my all-time favorite activity is it going to be possible to get climate control to the back of the cyber truck because that would be the ultimate camping machine if we can get all night climate control uh we'll try to do that yeah i agree that would be

That'd be really cool yeah all right who's next hello uh long-time fan a great guy uh just a question how does the ice industry look like for uh in the future uh well i don't think there will be an ice industry long term yeah i mean well i guess there might be like a few things that are like it's a like curious thing like i mean there's still like some steam engines made somewhere uh but like they're just

Basically sort of quirky collector's items i mean that will be the future of the internal combustion engine car hi elon to your left here in the white model y ryan mccaffrey from the from the ride the lightning tesla podcast curious about cybertruck it was interesting to see where you had it in on the battery technology front i'm sort of curious what you see for it in the production front is its volume you know trucks are so popular in america do you see its volume equaling the three

Or the y in the future and also is the uh did you do were you able to get tesla is able to legally be sold in texas as part of the gigatexas deal um well it's hard to say what the volume exactly would be for the cyber truck the the orders are gigantic so and we have like i don't know well over half a million orders i think maybe six or six hundred thousand that's a lot basically we start counting um so i i think there's probably room for i

Don't know at least like a unit volume of like 250 to 300 000 a year maybe more um so uh now we are designing the cybertruck to meet the american spec because if you try to design a car to meet the global that's the superset of all global requirements it basically you can't make the cyber truck it's impossible um so uh it really is designed for the american market but this is the biggest market or north american market is the biggest market for pickup trucks by far or

Large pickup trucks and then i think for uh we'll probably make an international version of of the cyber truck that'll be kind of smaller you know kind of like a tight wolverine package um it'll still be cooler but it'll be it'll be smaller because you just can't make a giant truck like that for most markets um so yeah but it's gonna be great uh and i i don't know i think probably we'll be able to sell directly in texas um we do pretty well right now uh but it is a bit weird not being able to

Actually conclude a transaction in texas but it's got to be like you know a click on a server based in california so um but really we can do leasing in texas we're not selling but i hopefully that will get cleared up in the future elon great job with everything that you're doing thrust gerber from gerber kawasaki your team's amazing what i'm most curious about these innovations are incredible but on my drive up here fully on autopilot for 400

Miles the entire state is brown and this is ultimately about climate has there been some analysis done if all these things are achieved what will its direct impact be on climate uh well i mean i think we'll have a very significant impact because it will stop the um the co2 ppm from growing as it is every year um and i mean i should say like you know um you know i try to view the whole climate thing for you know as a science question

As much as possible you know science you always question your hypothesis is it true is not true or assign a probability to a given hypothesis and i should say that my my original interest in electric vehicles uh predates the climate issue um like just when i was in high school is like i thought man if we don't figure out electric cars the whole economy is going to collapse when we run out of oil so it's like we better figure out electric cars and sustainable energy or civilization is going to crumble

And then uh it was only kind of later that the uh significance of the climate risk uh became apparent um and uh we were also able uh using tracking and other types of technology to access a lot more fossil fuels than previously thought um which is you know uh helpful for lowering the cost of gasoline but it's pretty bad for uh the total uh tonnage of co2 that you could put in the atmosphere it's not greatly beyond what people previously thought so

Um but this is you know as we were just going through this presentation it's like it is a absolutely monumental task to accelerate uh the advent of sustainable energy um i mean the entire global economy is still you know more than 99 percent dependent on or roughly 99 dependent on fossil fuels so although electric cars can get a lot of press right now they they're still and and there's still very few as a percentage of the total global fleet is practically nothing

It's i'd say yes less than one percent of the global fleet is electric right now um you know because of two billion cars and trucks and we're not in use so so there's a massive uh amount of work ahead just it's just insane like hard to comprehend how much work is ahead to get the new vehicle production to be sustainable to massively increase the amount of stationary storage which is critical because uh renewable energy is is intermittent

Wind and solar is is intermittent sometimes the wind doesn't blow and this obviously sun doesn't shine at night so you got to have batteries um a massive massive number of batteries so it's yeah it's hard to measure in direct impact but it's it's an experiment that we shouldn't be performing and the sooner we can sort of end the experiment the sooner we can kind of move on in a fully sustainable way that is actually lower cost i mean i think the thing that

People haven't fully internalized is once we do get to the 25k car the ownership cost of that car is incredibly lower than the prior car and then on the solar side and wind with the cost of solar and wind coming down and with batteries coming down with them the actual cost of energy on the grid is going down so we're sort of moving towards towards a sustainable lower cost future so there's not really a sacrifice that's true it is a false dichotomy to

Say that it's like it's either prosperity or sustainability uh this is often used you know by oil and gas to say like oh well do you want people to lose their jobs do you want to have you want lower people's standards standards of living do you want to you know make all these economic sacrifices uh really in order to have sustainability and the reality as drew is saying is that a sustainable energy is going to be lower cost not higher cost than fossil fuels

Um quick question for you um right here in front first uh thanks for having everyone and is telling a friend the one company to go work for that's going to have the biggest structural impact over the next 10 years of scale it's probably tesla so kudos to everyone at tesla for what they've done to this point in going forward the two questions for you as you've looked at the auto and the storage markets i know you've talked about it at kind of 50 50 long term

But it seems like a lot of the battery cost curve achievements that you're seeing presented today really make some of these storage opportunities much more feasible over the next five years and so i guess the first part of the question is does your calculus upon learning and improving these things change on that 50 50 mix or is there a role where storage becomes bigger and then the second part of the question with with all these huge grand visions who's going to be with tesla from a corporate perspective

Accomplishing these things obviously tesla can't do it alone but when you look at some of the traditional auto industry or power etcetera i don't see a lot of other teslas um well actually so there's a lot of companies in china that i think are doing great work with electric vehicles and also with stationary storage although we don't see that much in the us yet but i think probably we will in the future um i don't know i mean obviously we're

Doing everything we can to encourage uh other companies to move to uh sustainable transport um and also you know make stationary storage batteries you know we opened up made our patents freely available you know we really try to tell these companies hey you really need to do this or you won't exist in the future but they don't believe it you know so i mean we've we've talked until we're blue in the face what are we supposed to do um

But we really are hopeful that other companies will also do what we're doing and that will make the a sustainable future come sooner from a fundamental market size perspective like we did the first like ground up work to show the size of the of the market in terawatt hours and they are roughly 50 50. 10 terawatt hours for transportation 10 terawatt hours for the grid um and part of that is because the grid batteries

Because when you're making a power plant you're making a large investment um our 25-year assets are greater you know if they were if the grid batteries were 10-year kind of things the grid market would be bigger but because it's a longer duration asset they're roughly the same size thinking long-term um is there any other segments that this new battery will be able to disrupt or electrify um beyond just the initial model 2 or cheaper sedan like a boat boring company luke plane where

Are you golly are you there what's up right here okay great it's like it's like ventriloquism here you know it's like we just get the sound out of the speaker it can't tell where the heck is coming from yeah any hands or is the model 2 such a big deal because it decreases the cost of transportation that that is really the disruption or should we get hyped that this new cost curve opens up different vehicle categories like a high passenger density bus

Boring loop boat plane um well i mean there's there are batteries in limited production right now that do exceed 400 uh wattage per kilogram which i think is about the number you need for a decent range medium range uh aircraft um and uh i think our batteries will over time start to approach the 400 watts per kilogram range as well um so uh yeah i mean i think over time we'll see all modes of transport uh with the ironic exception of rockets uh

Transition to sustainability uh or to to electric basically um on the on the rocket front uh what we're planning to do is uh like about eighty percent of starship is oxi is liquid oxygen um and uh we're actually already uh running a power line to be able to use wind power to create the liquid oxygen so we're making you know some decent progress on uh sustainability on the rocket front but there's just no way to have an electric rocket

And it's important for the future of uh life and consciousness that we become a multi-planet species so i got to keep doing that hi elon hello josh phillips here retail investor i have a question in regards to the lithium and nickel industries and the likely price spikes and shortages of high grade materials the ev industry is likely to see if they don't act fast to address future supply tesla have clearly made the right moves that are necessary

But there's a real worry that the potential supply issues and price spikes will create a drag on the rest of the uv industry and therefore a drag on global ev adoption what advice would you give to the ev and mining industries to quickly solve this looming hurdles because for a sustainable energy future the spice must flow thank you yeah indeed the spice must flow the new spice um i don't know i think the you know the i i'm not sure i guess

We can try to like basically uh overdo it in cell production and perhaps supply cells to others um but we do see the fundamental fundamental constraint as total cell production that's why we're putting so much effort into making sales and kind of reinventing uh trying to reinvent every aspect of cell production from uh mining the ore to a complete battery pack um because it's the fundamental constraint it's no we're not getting into the cell business because

We uh you know it's for the hell of it it's because it's the fundamental constraint it's the thing that is the limiting factor for uh rapid growth um but we could certainly try to overdo it on sale sell production and perhaps uh sell sells to others um although we are going at absolute top speed so it's like it's not like we're holding it back um but i think like just making really efficient cars and uh you know there have lower drag coefficient

Um low loading resist rolling resistance uh efficient powertrains um i mean that's kind of what we've done in order to make uh iron phosphate uh still have a a good range um so the iron prices face high space lower energy density a solution but there's um you know while there are some limitations on the total amount of nickel produced every year there's really no limit on the iron there's so much iron

It's ridiculous so you can really scale up uh iron phosphate um you know at a raw materials basis faster more than you can nickel but yeah and just just to point out you know when we were walking through this presentation we intentionally separated all the different aspects the benefits of structural battery apply to a iron-based cathode in the same way they apply to a nickel based cathode so you get longer range iron

Based vehicles and also the silicon benefit can apply to the iron-based vehicles as well so there's we can do a lot to extend the range of an iron-based vehicle which is why it's a key part of the roadmap going forward and then i invited turner up here to talk about what the mining industry can do yeah um diversification on the cathode side is obviously massive and evs are all about efficiency and so for the ev industry for the vehicle industry

We need to see powertrain efficiency really increase at all other companies matching tesla powertrain efficiency so that everyone can have that diversified cathode approach where lfp is used in medium range and and even really make a 300 mile vehicle with lfp um and really the goal that we were trying to present here was a model for vertical integration strategic vertical integration that a lot of different people can do what we need to see is

Vertical integration that shortens the f the process path from mine to cathode and you know what we're doing here is is is novel and we're trying to push the industry in that direction so you know we're presenting a model here that that anyone can can follow yeah in fact if there's anything that that you guys want to comment on uh feel free to step forward and say something i i think the key is to be smart about your chemistry choices your materials choices

Yeah if you're smart about your materials choices um the spice will continue to flow you don't you don't need to use the same kind everywhere and if you it's about strategically planning it out and and for miners i think we are incentivizing them quite a bit to ramp up their production yeah and actually we had good calls like they're all motivated i think i think that they they've been sort of sitting back being like are you gonna grow like crazy and we're like yeah we're going to grow

Like crazy and then i think this indicates we're going to grow like crazy and that's what the miners want to hear and then they'll go make the investments hello elon uh this is ben olympic i'm a musician i was wondering does tesla have any um future plans to make partnerships with music companies like it is done with 10 cent games or things like that for you guys to actually kind of expand your services um for artists and other types of creative people to get involved in you know producing content

That can be part of the tesla ecosystem or so other people that do creative things can get involved with you guys um well we don't uh we haven't really thought about that much but i suppose it's probably something we should think about um we will be providing a title on tesla's so you know we're providing music more music sources that people can choose from and uh just generally trying to improve the entertainment experience in the cars and i think actually as we go to a more

Autonomous future uh the the importance of entertainment um and productivity will become greater and greater um i mean to agree that if if you're just basically sitting in your car the car is fully autonomous and driving somewhere it's kind of like being in a i think you know the car is essentially your chauffeur and and then uh the things that become important are okay well let's uh let's have good entertainment and uh you know if you want to do some productivity stuff

Then that actually starts to become much more important because you're no longer spending your attention driving the car so it'll be extremely important in the future should we do some of the questions okay should we do the second one uh yeah the first one i think we already answered like if we're if we have um if we're able to make enough sales we which we'll try to do or we will supply other companies uh it's definitely not an intentional effort to keep the sales to ourselves uh if we can make enough for other

Companies we'll we will supply them and we're trying to do you know the right thing for advancing the sustainable energy whatever that that that is so vehicle degraded we get asked that a lot i think one thing that's important to note is the vehicle to grid uh it doesn't unless you have a power cut off like you need to cut off your main supply to the grid otherwise if you're if you lose the power in your house

You'll basically just backflow uh energy to the grid so just having a reversal in the in the power flow does not actually uh keep the lights on um you need a whole separate system to cut off power to the grid and i think there's also the case that people really want the freedom to be able to drive and to uh charge at their house and it's obviously very problematic if uh you know you get to morning and your car

Instead of being charged it it discharged into the house and then you sort of okay now i can either drive or not use the battery to power my house uh i think it's actually going to be better or for people's freedom of action to have a power wall um and a car separate um and then you then it's uh you know everything works the the you know and you add that you basically combine that with solar

Either solar retrofit a solar glass solar glass roof um and a local battery storage so you basically become your own utility um and then the the car is you know can be charged also with solar um i i think that's like the stuff that works uh you know that said like we can certainly do vehicle to grid um and i think we could like we could basically enable that with software in europe or something right uh yeah um we are future generations of power electronics we will be able to do

This more or less everywhere from a like energy market participation perspective but but yeah from a backing up the house and it just so happens that the way the north american connectors are on all the cars in north america it doesn't matter whether it's the tesla connector or the the connector that the other vehicles have doesn't actually support powering your home it's unfortunate so you need an additional hardware to do that

Um but but yeah in the future all versions of our vehicles will be able to at least do bi-directional power flow for the purposes of energy market participation but even for that it's important to remember that your car isn't plugged in 24 7. so it's kind of an unpredictable uh resource for the grid it'll have a value but it's not the same as a stationary battery pack yeah honestly a vehicle to grid uh sounds good but i think actually has a much lower utility than people think um

I i think very very few people would actually use biblical grid and we actually had with the original roadster we had vehicle to grid capabilities nobody used it yep how do we find the engineers to do everything we're saying how do we find the engineers to do all these things uh well uh i i guess we recruit we recruit a lot of engineers from all parts of the world you know i think tesla has a good reputation for doing exciting engineering

And that tends to attract the a lot of the top engineers in the world because they know that their efforts at tesla will really uh serve the greater good um and and we're super hardcore about engineering um you know tesla is like first and foremost in an engineering company it's like hardcore engineering is what we do um like the sheer amount of hardcore engineering done tesla is insane um and if you look at uh say uh there's various surveys done of engineering schools uh

Where do you want to go um like what's your top choices and actually the top two choices um last you know last few years have been uh tesla and spacex so sometimes it's tesla first sometimes spacex first but those are the two top ones yeah i mean if you are motivated to solve some of these problems which are the hardest problems in the world to solve that really fundamentally enable the future we all need uh please reach out yeah and help us work on these problems

Absolutely like you said the battle is far from over um you know less than one percent of the global automotive fleet has been converted to electric and uh and even maybe 0.1 less than 0.1 percent of stationary storage has been done so stationary storage has barely begun converting the global vehicle fleet to electric has barely begun um so there's still a massive amount of engineering work to be done at tesla and other companies to accelerate this

Transition to sustainability can you guys hear me yeah uh this is jordan from mark asset management um so you've talked about the importance of the factory and you've mentioned the ground-up design process and a lot of the new things that you're going to be doing or started to do in shanghai berlin and austin can you just maybe help us understand and quantify like how financially meaningful all of those improvements will be and then given what you're trying to accomplish

As a company is it fair to assume that the vast majority of improvement will be given back to the customer in the form of lower prices um yeah i mean it's it i think certainly uh we will try to give back as much as possible to the customers it's not like you know it's like tesla's profitability is crazy high you know our average profitability for last four quarters of like maybe one percent so uh just be clear it's not like you know we're minting money uh our evaluation makes it seem like we

Are but we're not um so we we do want to try to make the price as as competitive as we can without like losing money and if you lose money then you you know keep doing if you keep losing money you'll just die so we have to uh this thing called profit is just like we need to bring in more money than we spend otherwise we're dead so but affordability is key to how we scale right like the demand goes non-linear as you reduce the

The price of the car yeah i mean it's important to sort of separate the difference between affordability and value for money uh or desirability of the product so uh you know for a lot of people they want to buy a tesla they simply don't have enough money we could make the car infinitely desirable but if somebody does not have enough money they can't buy it um sometimes you know if people you know kind of forget this it's like it's it's not it's like somebody people have to have enough

Money to buy the car um and and just making a car super desirable but expensive does not mean they can afford it so it's absolutely important that critical that we make cars that people can that people can actually afford yeah um so when do you expect tesla vehicles to beat ice vehicles on initial purchase price i think a way to answer that question is in the classes of vehicles we sell today we're already doing that yeah we're already pretty you know pretty close

Um and then factoring in total cost of ownership um the fact that electric wheels vehicles require much less servicing um and are way cheaper to run uh when you when you look at like you know total cost of ownership and you can also lease a car so if you just like lease a car or or get a loan for a car you've got your sort of monthly payment and then your cost for either gasoline or electricity and your cost of servicing and the fully considered cost of an

Electric car is uh much less than a gasoline car of the same nominal purchase price you know uh i mean that said and like maybe on the order of you know three years when we can do um a lower cost like a 25 000 car um you know i think that will be basically on par maybe slightly better than a comparable gasoline car so i think maybe it's it's on the order of three years ish however the technology advancements and increased vertical integration of

Battery manufacturing influence your ability to improve the environmental and social impact of the supply chain and i think yeah i think we've sort of have said that already yeah do you have some ability to scroll through this i just scroll away are we covered recycling yeah let's just scroll until we've got stuff that we haven't covered well we've definitely covered that topic one of the things we've already answered covered that that one i think we literally just answered that

Oh i saw a cathode durability question let's go to that one go down go down go down good technical question keep going ah how are you going to address the cathode durability and cost environmental impact trifecta is this something you're going to leave the enviro upstream supply chain to solve now i think we tried to answer that directly i mean we really are looking at not just what happens in the cathode facility but like currently outside the cathode

Facility that should really be inside and removing processes that shouldn't have been there in the first place and uh the use of reagents that add are just costly and not necessary and removing a bunch of white wastewater from the process guys are there anything is anything you you want to add to every like uh go through everyone like maybe say what you're doing and you know say a few words i don't know uh sure um i just want to reiterate the fact that this is a massive problem massive problem and it seems like

Tesla's on its way and ahead um but we need everybody's help um because it's uh it's everybody's planet and we're not going to get to 20 terror hours by ourselves so please think about this carefully um as it affects everybody so let's get on it yeah and and obviously if you care about uh solving sustainability uh and doing hardcore engineering uh definitely come work tesla yeah we you know we went through a

Couple of the manufacturing improvements uh and you know it kind of looks easy when you put together a nice slide deck but the challenges are like this it's super challenging when you take materials out of the process when you integrate processes together uh you have to do a lot of things at once and that's that's like this immense engineering challenge uh and so like you know to appreciate that like you need

Like to get through this we need like the best engineers we've got and we've got this awesome team i just want to shout out also to all of our team watching like you guys are awesome like you absolutely kicked us putting this together and yeah yes thank you thank you tesla team totally agree yeah that's it like yeah yeah rodney westmoreland uh managing the construction here at tesla what i would like to say is uh one shout out to the team the team has been

Working effortlessly a very very tough um project here for 24 hours a day it seems like around the clock to have this complete the thing that sets us apart from a lot of other construction yeah we have a construction company here the thing that sets us apart is that we're integrated in the manufacturing process so every detail that comes from drew's mouth is directly implicated into the system that we're that we're building um that way it what would typically take three or four months to create a

Specification our design team is working right with the manufacturing team uh to allow us to speed that process up tremendously so yeah it's definitely a a important part of the vertically integrated approach is to be able to design the factory around the equipment in fact together with the equipment so that you can build the factory at lower cost and and more quickly yeah i'm scott i focus on cell design i i think it's hard to put into words how inspiring this is i've been out of a

Long time with tesla and um yeah i really hope others do join us since when scott it's 2005. yes with many of you um but thank you um you know it yeah you're before drew but who's keeping track um but i i'm really stoked what the team's been able to accomplish over the last you know short period of time about a year it's been really an incredible transformation i mean hopefully what we've shown you inspires you to join us or join somebody else in the effort

Um and uh i couldn't think of a greater more intelligent more hardworking team to be working on with this problem hi peter um i lead the manufacturing uh improvement team and i i guess the point that i would like to make is um manufacturing improvements is like the accelerator so like you think about the execution that rodney talked about in terms of how fast we've been able to put together this factory which is amazing and something that's been really

Incredible to be a part of that's not enough what we need to do is improve the manufacturing technology that's the real accelerator and that's what we're really focused on elon talks about it all the time that really going and improving that system is what will enable us to get to the scale and the cost that we need and then the other point that i would make is on the recruiting side like it doesn't matter if you know about batteries if you come from any industry you can you can do something fantastic

In the in the work that we're doing um we talk to people from industries that you wouldn't imagine like i talked to a guy from who makes golf balls and he has stuff which is really impactful for what we're doing so you know if you're in any industry and you want to be uh you know impactful here like come join us it'd be great hi um excuse me hi i'm tony i've been working in um lithium and cathode materials for almost 23 years now

And this is the most growth i've seen in a company i've been here a little over a year and a half we're hiring amazing people that are allowing us to leverage technology that most of the industry is struggling to to achieve so to answer the question how are we going to do this we are really advancing the materials manufacturing for cathodes and for lithium beyond uh what has been accomplished in the previous 20 years it's exciting

Yeah my name is turner um worked closely with the team i've worked a lot with with everyone here and um on the on the cathode and upstream materials side it's it's really important that everyone understand that this growth is coming this this growth is real we are going to make all of these batteries and everyone needs to grow with us the entire supply chain needs to grow with us and if you have an idea that simplifies anything in the supply chain come talk

To us come work with us and let's do it any any existing specification is wrong any existing manufacturing method is wrong process equipment it's wrong it's just a question of how wrong yes quote elon musk yes exactly we're wrong just the question of how wrong try to be less wrong so tell us how we're wrong and how we could do it better so that we can accelerate and improve as fast as possible all right well i guess uh thank you

Everyone for coming i hope you liked the presentation uh very exciting future ahead um you know uh we're going to work our damn desk to transition the world's sustainable energy as quickly as possible um and your support and help is is key to that success so uh thanks again uh super appreciated um and look forward to the next event thank you thank you foreign

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