2024 Tesla Shareholder Meeting: Elon's Bit

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[00:01:17] The goal is to give people hope that there is a path to a fully sustainable global economy, that we are on that path, that we are accelerating that path, and that so long as we don't get complacent about it, it will happen.

[00:01:34] This was really the beginning of the end of the Tesla bubble. I actually think the company could go bust. Tesla's Model Y is the world's best-selling car, beating out Toyota's RAV4 and its Corolla models. Regarding FSD version 12, it's profound. The rate of improvement is rapid.

[00:01:51] It might be the biggest asset value appreciation in history when you can do unsupervised full-cell driving. I mean that just sounds like a story stock, an autonomous taxi driving. Can you really balance your checkbook with, you know, sort of pie in the sky predictions like that?

[00:02:08] If you ask the wrong question, the right answer is impossible. My prediction is that a majority of Tesla's long-term value will be optimist, and that prediction I'm very confident of. It's very rare a product comes along that is seemingly impossible,

[00:02:28] that experts said would never be made, and this is one of those times. Finally, the future will look like the future. People say like, why did you make it bulletproof? I'm like, why not? Energy storage deployments, the MegaPak in particular, reached an all-time high

[00:02:46] in Q1, leading to record profitability for the energy business. This is the machine that builds the machine and the factory is the product. And this building is the most advanced car factory that Earth has ever seen.

[00:03:01] If you value Tesla as an auto company, it's just the wrong framework. If somebody doesn't believe Tesla's going to solve autonomy, I think they should not be an investor in the company. But we will, and we are.

[00:03:31] Hello, everyone, and welcome to the Kilowatt, a podcast about electric vehicles, renewable energy, autonomous driving, and much, much more. My name is Bodhi, and I am your host. And today we are going to cover Tesla's 2024 annual shareholder meeting.

[00:03:45] Now, I'm going to tell you right now, this is a long meeting. I listened to it this afternoon. It went from 130 to, I think, just a little after four. I cannot do this entire shareholder meeting in one episode.

[00:04:01] I'm going to need to break this down into three episodes, and here's how we're going to do it. In the first episode, we're going to hear from Elon. So in case you've missed it, Elon did get his pay package approved,

[00:04:12] although there are some things on that that will go more into another episode because it's not guaranteed at this point. But he did get his pay package approved by shareholders. And Tesla is now also moving to Texas. They're going to incorporate in Texas. That was also approved.

[00:04:29] We're going to talk about all of the proposals in a separate episode. So the first episode is going to be Elon talking. The second episode will be question and answers from the Tesla shareholders who were at the event.

[00:04:45] So those shareholders had an opportunity to ask Elon some questions, and a friend of the show, Jessica Kirsch, she was actually able to ask Elon a question. So we'll make sure to put that in there as well. She did a great job.

[00:04:57] And then the third episode, the third installment of this is going to be the actual shareholder meeting where we're going to talk about the proposals. Now it's going to take me a little bit more time to dig into those proposals because what happens is

[00:05:12] this Tesla will set forth their proposals and then shareholders vote on it. And then shareholders have an opportunity to set forth some proposals and Tesla always recommends that you vote against shareholder proposals. And then they give a reason why.

[00:05:30] They don't give a reason why or they don't read out the reason why on their at the shareholder meeting, but they do put it in a proxy statement. So I'm going to have to take some time and then go through those proxy statements and honestly sound intelligent.

[00:05:46] So this episode is going to, I'm recording this at 7.35 PM Arizona time on July 13th. This episode will go out on Friday morning. The question and answer episode will go out on Saturday morning. And then on Tuesday, our regularly scheduled show, that will be the Tesla shareholder meeting,

[00:06:09] which I thought was still really interesting. Don't get me wrong. I'm not saving it for last because it's the most boring. I'm saving it for last because it's the hardest to do. So if I concentrated on doing the shareholder meeting first, what would end up happening is that

[00:06:27] everything would get just pushed later and later and later because like I said, it is going to take me a little bit more time to actually go through that. But before we get to the Elon bit, I do want to thank some Patreon supporters

[00:06:42] and some Acast Plus members. I'm going to start with the free members of our Patreon. Did you know that you could just go and sign up? You don't actually have to pledge any money. And every now and again, I'll release a free episode without ads.

[00:06:58] I'll just release that to you. So here are our free members. I'm going to start. I'm just going to say first names or if you have a code name, I'll use that. We have Liana, we have FallenNC, Eric, Casey, Eric, Brian and Moe Cowbell.

[00:07:19] So thank you folks for taking the time and signing up to the Patreon and becoming free members. There's value in that. There's definitely value in doing that because like I said, every now and again, you get an ad-free experience. All right.

[00:07:33] Let's move on to our Acast Plus supporters. First up, we have Ravi, Sean and GeoHole. And just kind of a heads up in July, July 19th to be more specific. We're going to hear from Sean who's a New Zealander and he's going to give us

[00:07:52] a little bit of a different perspective because obviously I'm from North America. I'm from the United States. A lot of the perspective that you hear on this show is from me. And so we'll get somebody from the Southern Hemisphere and hear what they think about EVs,

[00:08:11] renewable energy and all that good stuff. And it was a good interview. I actually talked with Sean right before recording this. All right. The whole point of this though is to say thank you to everybody. Thank you all for supporting this show. If you didn't hear your name,

[00:08:25] that's because we have a growing number of supporters now and I'm trying not to read everybody's name on one episode because I know it can be a lot. So over the next two episodes, we will get to everyone else and make sure everyone gets a thank you.

[00:08:41] All right. At this point, Elon takes the stage and I'm just going to go through this as if we're watching it together. If there's something that doesn't need to be in this episode, I will make sure to take it out so we save time.

[00:08:54] But I really try and treat these annual shareholder meetings as if we're listening or watching them together. So let's go ahead and... Oh, you know what? I had one other thing to say before we get to Elon. The clip I played at the beginning,

[00:09:09] that was not put there to sound inspirational and to get you all excited for this annual shareholder meeting. That was put there because I filmed it kind of gross to be quite honest with you. Like I do not have anything against Elon.

[00:09:24] I do not think he's a horrible person. I don't think he's a great person. He is a human being with lots of flaws and we are all human beings with lots of flaws. And when I look at Elon, I look at him through eyes

[00:09:37] of how I would look at another human being. Like I do not... What I'm trying to get here is when we get to the question and answer section, there's a lot of deification of this guy, of Elon. And that's not great.

[00:09:53] And I don't know how Elon looks at it when everybody kind of talks about how great and wonderful he is. I can tell you right now, as soon as somebody gives me a compliment, I'm immediately going to shut that compliment down. I am very uncomfortable with compliments.

[00:10:11] Elon doesn't seem to be as uncomfortable as he once was. Now I'm not saying he's a narcissist. I'm not saying he's getting off on all of these compliments. It is nice to hear when somebody compliments you. But yeah, I just want to be very careful.

[00:10:25] Like we have a tendency in politics, religion, obviously, and just kind of these tech wars between like Apple and Microsoft or Apple and Google and Elon and OpenAI. We have a tendency to deify one group or whoever you identify with and then vilify the other group.

[00:10:49] And I don't think that's healthy for us as humans. So I kind of thought what they did there was put Elon into this little bit of a savior type of position, like put him upon a pedestal as if he's saving the world, saving the planet,

[00:11:04] saving this, saving that. And he's done great things. I don't want to take anything away from that. But we shouldn't be deifying people. Like they're people. They're just really rich people in this case. So that's why I put that in there. If you have differing thoughts on this,

[00:11:24] I'm more than happy to discuss this with you. You can email me. It's bode, B-O-D-I-E at 918digital.com. But I just wanted to put that out there because I clearly have a... I don't know if it's a bias, but I clearly have a problem with this.

[00:11:39] It happens a lot. Elon does it himself sometimes when he says, well, I'm the only one that can solve this problem. If I don't do it, no one else will. And I think that that's dangerous thinking and dangerous talk. Like there are plenty of people out there

[00:11:53] who are doing things just not the way that Elon is. And it doesn't mean that they're doing things wrong. Maybe they are. Maybe they'll get there sooner. Maybe they'll get there after. Elon, who cares? The problem is there's not one person...

[00:12:07] The problem that I have, I should say, is there's not one person who can solve this problem. Tesla has 140,000 employees. Elon is not making things happen at Tesla. He is definitely... He is definitely making them happen faster or trying to find new ways that sometimes they're successful,

[00:12:28] sometimes they're not. He is unlike most CEOs in some ways, but he is not the savior. All right. With all of that, let's welcome our lord and savior, Elon, to the stage. Hey guys. Welcome to the stage. Hey guys. Welcome. Welcome to the Tesla shareholder meeting.

[00:13:03] And I just want to start off by saying, hot damn, I love you guys. Yeah. We have the most awesome shareholder base. I mean, it's just incredible. Any public company, it's incredible. Wow. How do you think that greeting would have gone had Elon not gotten his pay package?

[00:13:26] I don't think it would be the same. He might have come out and actually did the whole presentation that he's about to give us, but would it have been... You guys are the greatest? Maybe not. I don't know. It's worth thinking about. All right.

[00:13:42] Next up, Elon is going to talk a little bit about Optimus. He did... I skipped over some parts, but he did make a statement in one of the parts that I skipped over that he's very optimistic and he's often late in delivering things like you talked about Cybertruck

[00:13:57] at one point in the presentation where people thought it was never going to come out, and it did. And I think he's 100% correct on that. When people were telling me that thing will never see the light of day, I think that is... I think that notion was foolish.

[00:14:16] I was starting to get a little worried, though, towards the end there, but Elon and the team do deliver eventually. So I do believe that one of the things I skipped over was RoboTaxi. I do believe one day RoboTaxi will be a thing.

[00:14:31] I just don't think it's going to be a thing when Elon thinks it's going to be a thing. I think it's going to be much later. But really, I know I was very down in the beginning on Elon and Tesla and the whole savior thing,

[00:14:43] so I just wanted to give a little credit where credit is due because Tesla in 2018, when Elon's pay package was approved originally, Tesla wasn't guaranteed to be around. They still thought that they might go out of business. It was a pretty optimistic set of goals

[00:15:03] and Elon achieved those goals. Now whether or not I think it was worth $56 or $48 billion is irrelevant because I'm not a shareholder, but we'll get into that more later. I'm getting ahead of myself. Let's go ahead and get back into Elon's presentation.

[00:15:20] With that, let me get into the presentation. I think it might be worth us just putting a word limit on future shareholder Tesla proposals. It's like you can't have a novel length. You can't have a whole novel as a Tesla proposal.

[00:15:55] So I gave Elon a compliment a second ago. Now I'm going to say something I think is distasteful. I think this is distasteful. I do not, I'm not a Tesla shareholder, but I do follow Tesla on X and constantly I am getting notifications from Tesla

[00:16:16] in my notifications tab, I guess, where they're like, hey, make sure to vote. Elon might leave if you don't vote for his pay package. Hey, did you know what? You got to vote. These shareholders don't have the megaphone that Tesla has.

[00:16:34] So this is their opportunity to explain it to other shareholders. They don't have that one to many communication pathway that Tesla has. Now, if Tesla's like, hey, we're going to have, let's say a little interview show and we will interview each person setting up or proposing a proposal

[00:16:56] and they'll get to speak their mind and then at the actual shareholder vote, they give a short little synopsis of that. I think that's fine. But most people may or may not, I shouldn't say that. We'll say people may or may not read the proposals

[00:17:16] and then people may or may not read Tesla's counter to that proposal. So I think it's okay that these folks get to speak their mind. I think it's okay that these folks get to be a little bit wordy because as a person who is not a Tesla shareholder,

[00:17:34] I saw an awful lot of my Tesla feeds telling me to make sure to vote my shares, which I don't have any, and why Elon is leading the company. And it doesn't have anything to do with the fact that I do this show.

[00:17:50] It just has to do with the fact that I follow Elon and I follow Tesla. So yeah, these people did not have the reach that Tesla and Elon have. So I think this is in poor taste, especially when you consider that a lot

[00:18:06] of these places that are putting forth these proposals are own millions of shares of Tesla. These are not people who are holding one or two shares of Tesla. Even then, they should be heard. But yeah, I think this is tasteful on Elon's part.

[00:18:27] You know, as you can see, our impact is accelerating. We're starting to make a real noticeable dent in carbon emissions. So we're really making a lot of progress towards achieving our goal of sustainability. And one of the effects of autonomy

[00:18:45] is actually is going to be an even greater effect on carbon emissions because I suspect that we'll go from passenger cars having about 10 hours of usage per week, about an hour and a half per day, to probably a third of the hours in the week,

[00:19:01] maybe 50, 55 hours, which means the same car will be used five times more often. So you need a certain amount of resources to make the car that'll have five times the usage, in my opinion. I think that's quite likely, which will be an even more dramatic impact

[00:19:20] on carbon emissions. So we care a lot about sustainable manufacturing. Our factories are beautiful. You walk around the factory. Contrary to what you read in the press, it's like a good vibe in the factory. People are smiling and happy. It's nice. So yeah.

[00:19:58] We actually do care a lot, at Tesla, about doing the right thing. And we're not going to be perfect, but we do care a lot about doing the right thing. So our vehicles are water efficient, energy efficient. We're never possible to use renewables for powering the factory.

[00:20:17] And we do our best to do the right thing. Now, when I listened to this, I had a thought back, and this is all on me. This is not on Elon or Tesla. But have you ever worked at a place where maybe you work at a remote location

[00:20:32] and then the big bosses are coming into town and all of a sudden, all of the garbage cans are emptied. Everybody's wearing a collared shirt when most of the time people are just wearing pajamas to work. Just because those big bosses are coming into town

[00:20:46] and everybody is minding their P's and Q's. I would imagine that's a lot like what it is like when Elon shows up. Now, those people could all still be having a good time. I've had jobs where everybody straightens up and flies right while the bosses are there

[00:21:02] and then go back to your regular way of doing business and enjoying yourself. That doesn't mean it's miserable, but I'm curious as to how much of a real insight that Elon has as to people's experiences on the line. Now, he's on the line more than most CEOs,

[00:21:26] so he might see things. I genuinely don't know. I do believe that Elon and Tesla want to do the best in terms of the environment. I don't think Elon wants to make his employees' life miserable, although I would say that shutting down an entire team, a supercharger team,

[00:21:49] and then reassigning much of those same duties to another group in the energy department of your company is not caring about their workload because you just give them a bunch of work. At the level of a person who is trying to take advantage of their employees

[00:22:14] versus a person who is more oblivious, isn't the right word, but doesn't consider what they're doing to their employees on that level, I would say Elon's probably in the latter and not the former. But yeah, let's go ahead and move on to the battery update.

[00:22:35] Our batteries are lasting longer. Batteries are lasting longer, which is good. Safety is good in the factory. We're improving the affordability of EVs. Model Y is comparable to BMW X3, but its actual cost of ownership on a monthly basis is much lower.

[00:23:05] We were number one in EVs globally last year. So let's see. Congrats to the Tesla team on making 6 million vehicles all time. The Tesla fleet is really becoming very substantial. It's going to be 7 million vehicles by the end of this year. Over 7 million vehicles.

[00:23:51] Our factory in Fremont is currently the highest volume auto factory in North America, and we broke the prior production record from when it was new me. So it's actually pretty wild. We have a giant car factory in the San Francisco Bay area.

[00:24:08] It's not exactly the cheapest place to have a car factory. It's like that in the Swiss Alps or something. But we still managed to make great cars at high volume, and that's a testament to the great team we've got in Fremont. So congrats to the Fremont team.

[00:24:35] A lot of people were saying the Cybertruck is fake, it's never going to come out. Now we're shipping a lot of Cybertrucks. We hit a weekly record of 1,300. And I think with the Cybertruck, it really is something special. People sometimes have different opinions on the Cybertruck,

[00:25:06] but if you really want to know if something is cool, if it's a great product, show it to a kid. No filter. The kids got no filter, like a 5-year-old, 6-year-old, something like that, or even 3-year-old, and say, which car do you like? Cybertruck. You know what?

[00:25:30] Anecdotally, when I showed the Cybertruck to my kids, they were 7 at the time, that maybe 6 at the time the Cybertruck was announced. Let's see. This came out in 2019. Yeah, so they were 6 or 7 at the time. Both of my kids did not like it.

[00:25:52] And my wife definitely doesn't like it. But both of my kids still don't like the Cybertruck. They are now 11. They have not gotten used to it. They were very happy when I chose to buy a Model Y over the Cybertruck. So not every single case is that.

[00:26:08] I wish it were, but it's just not. And we launched the upgraded 3, which is actually a fantastic car. I recommend trying it out. It's really a great car. And it's only $216 after a gas savings. Total cost of ownership is basically $200 something when compared to a gasoline car.

[00:26:29] It's similar to a gasoline car. So it's really a great deal and a fun car. And the performance, Model 3 performance is, it's fast in a Porsche 911. It's just a great, great car. So yeah. And of course, Model Y became the best selling vehicle globally.

[00:27:05] And this is something that we predicted. So I think I said in 2022, Model Y would be the biggest car in the world by dollar volume sales. And at 2023 it would be the biggest in unit volume. And it was.

[00:27:23] And again, this year it will be the best selling car on earth. So yeah. And we got the Tesla semi. We're in low volume production of the Tesla semi. And just last week I approved the plans for volume production of the Tesla semi.

[00:28:04] So we're going to make a lot of semi trucks. We're going to start off with, yeah. I think it will actually move the needle financially. It's not like a, it's not a small thing. And the thing about commercial vehicles is that companies that use them are super objective.

[00:28:25] It's not like, it's actually, I mean, obviously we're going to make it have cool style and be an awesome car. But for commercial vehicles, the companies that make the buying decisions, they just look at it and say, what are the numbers?

[00:28:38] Is this cost less to transport or cost more to transport than say a diesel truck? And the thing is that the economics are much better than diesel truck. It's kind of basically a no brainer. If you're a transport company, you don't use an electric

[00:28:53] that Tesla electric semi, you're just losing money. Why would you do that? Do you not like money? Okay. Okay. But if you do like money, then I recommend using the Tesla semi. So I think this is really going to actually sell at a scale that

[00:29:20] people will be surprised at and will actually move the needle financially and do a lot of good. And also for CO2 and sustainability because semis are driven all the time, actually even at much smaller numbers, they have a very big effect on total carbon emissions solved.

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[00:30:44] Everybody knows backup and disaster recovery are huge concerns for IT professionals. But what if your current solution isn't providing the protection you think it is? On June 20th, Cove Data Protection from Enable is partnering with Microsoft to show you the ways traditional backup and disaster recovery

[00:31:00] are leaving you vulnerable to ransomware and how a more modern cloud-first approach can close those gaps. This webinar will change the way you see disaster recovery, so don't miss it. Visit gocove.com slash microsoft to register.

[00:31:14] There's never been a faster or easier way to start your weight loss journey than with Plushcare. Plushcare accepts most insurance plans and gives you online access to board certified physicians who can prescribe FDA approved weight loss medications like Wigovia and ZepBound for those who qualify.

[00:31:30] Take charge of your health and speak with a board certified physician about a weight loss plan that's right for you. Get started today at plushcare.com slash weight loss. That's plushcare.com slash weight loss. Plushcare.com slash weight loss. I'm actually really excited about the Tesla Semi.

[00:31:52] I think that as a person who drives a big dirty diesel fire truck, I would much rather have an electric fire truck. I know that that is not a popular statement in the fire service. However, it is becoming more popular.

[00:32:10] There's a couple of departments in the valley here who have electric fire trucks. I think Mesa has an E1, Gilbert has a Pierce, and the... Let's see. I thought somebody else maybe had a Rosenbauer. Maybe that was Clark County fire truck.

[00:32:30] But anyway, I want more of these trucks as a person who's been working around them for 20 plus years. They are gross. If I ever get cancer, that's probably one of the leading contributors because they just belch out a lot of nasty exhaust.

[00:32:51] Even if you don't believe in climate change, we can all agree that that black smoke that these semi trucks and other big diesel trucks are belching out is not good. It's not good for us and our health. If you don't believe in climate change and you're like,

[00:33:07] ah, the environment's just going through its natural cycle, okay, cool. But I think we can still come to an agreement that that nasty smoke that's coming out isn't good for our health. Our supercharger network is continuing to grow. Rumors of the death of a supercharger are greatly exaggerated.

[00:33:28] We are in fact continuing to grow the supercharger network significantly. In fact, this year, I think we'll deploy more superchargers this year that are actually working than the rest of industry combined. Just FYI. We are going to be more careful about the capital efficiency

[00:33:56] of where we deploy superchargers, but for sure any place that has congestion, any sort of missing parts of the map that we're missing, we're going to put the superchargers there. So even for the remainder of the year, we expect to spend about half a billion dollars

[00:34:13] on supercharger deployment. So it's very significant and it will be a well spent half a billion. So this is a lot. This is actually not showing a bunch of new markets that will be opening up later this year and next.

[00:34:31] So we want Tesla to be worldwide and there's still a lot of countries that we have zero to very few Teslas and we want Tesla everywhere. So there are a lot of new markets that we're going to open up later this year and next.

[00:34:50] We're also opening the superchargers to other companies with the, that's the adapter to the old somewhat clunky connector. But our goal is to be helpful to other car companies. So any other car companies that are going electric,

[00:35:11] we do want to be helpful to them with our supercharger network. So we're providing them with adapters and enabling them to have access to the Tesla supercharging network because we think it's better to do that than to create a walled garden that inhibits EV growth.

[00:35:27] And I agree with that. I'm curious, does this ease your concerns when it comes to the supercharger network or not? I know we have a lot of people who listen to this show who own different types of EVs.

[00:35:39] Some of those are going to be new Chevy Silverado EV owners here shortly. We have some F-150 Lightning owners. We have some Rivian owners. Does this ease your concern with the Tesla supercharger network? I think it does mine a little bit, but I'm curious. What are your thoughts?

[00:36:00] Go ahead and email me. It's bodei at 918digital.com and let me know what you're thinking. And we're also innovating a lot in battery production with the 4680 that's built right here. And it is, it's a hard problem. There are entire companies that just make battery cells.

[00:36:19] That's all they do. But we're making good progress. All the Cybertrucks that you see use the Tesla 4680 cell. And we have a clear path to the 4680 being, we think, probably the most competitive cell from a manufacturing efficiency standpoint.

[00:36:41] And so it's, but it is a hard problem, I have to say. There's quite a lot of brain damage required to be good at cell manufacturing. It's like a brain damage high.

[00:36:54] But I think it does give Tesla resilience in the face of, if there are changes in the, I don't know, geopolitical situation somehow. But like it's good to have some independence in cell manufacturing. So yeah, we're making steady progress and we also have the cathode refinery,

[00:37:20] which you can see behind the main factory. So you can sort of see it in the picture there. That's a cathode refinery and then we've got the lithium refinery in south Texas. And so we're just making sure we've kind of got the piece of the puzzle.

[00:37:36] And I mean, if you were to look at sort of a video of how Tesla does, say, cathode and lithium refining and how the rest of industry does it, it's night and day. I mean, you can sort of eat off the floor in the Tesla refinery and

[00:37:51] I would not recommend doing so in the others. So, you know, it's really, we're definitely going very vertical here. But I think this is a wise investment that will pay off more than people realize.

[00:38:09] This is one of the areas that I really admire Elon and the Tesla team is when they're like, you know what? The supplier is not doing it right. We'll take seats, for example, for a little while. They were building their own seats and then they went for,

[00:38:24] I think it was for the Model 3. They went outside to an outside company and those seats weren't as good. And they're like, you know what? We build them better. Same thing with lithium. They're like, you know what? We think we can refine lithium more efficiently.

[00:38:36] We're going to do it. And it's this vertical integration. And I think they do a really good job at it. And I don't know enough to know about business and manufacturing on whether they do it better than anybody else.

[00:38:48] But based on all of the earnings calls that we listen to and the other shareholders' meetings from other companies that we listen to, Tesla seems to do it differently. And I admire that about the company.

[00:39:02] So this year we're also on track to complete a massive number of energy deployments. So that is a gigantic increase in deployment capability. So we seem to be tracking to sort of a 200 to 300% year-over-year growth in energy storage deployment and stationary pack. So it's giant.

[00:39:31] And the limiting factor really is being able to build more mega packs and build more power walls. So we're ramping up production of the Powerwall 3, which is really a game changer at the personal level. It usually takes about three iterations of any given technology to really

[00:39:52] for it to be something where it's like, okay, now we're really hitting the sweet spot. So Powerwall 3 is an epic product. The Mega Pack is also I'd call it iteration two of the Mega Pack is also an epic product.

[00:40:10] With the Mega Pack 3, which is probably a couple years away, we'll start actually absorbing more and more of the substation of the sort of power electronics. So I sort of think you want to get to the point with the Mega Pack where you

[00:40:28] can literally just take the high voltage power lines and plug them in. There's no substation. We just plug them in. Just drop it down and plug it in. Now it works. Which is like mind blowing for the utility industry, by the way. They're like what? Yeah.

[00:40:49] You just plug the wires in and it will work. For very high voltage. So that I think is actually going to be a major. So this is yeah, this is great. Excellent work by the energy storage team.

[00:41:06] This is another area where I think Tesla excels in terms of the energy storage. There's a new Tesla Mega Pack battery farm. I think it's in Avondale. It's somewhere in the West Valley and it's supposed to be able to replace like peaker plants and stuff like that.

[00:41:25] Now, I haven't seen it. I don't know much about it. I just read about it, but I want to see more of these. The only thing that concerns me and it's not a huge concern, to be honest with you, it's a little concern.

[00:41:36] The only thing that concerns me is what happens when these things catch on fire? Because it is not. It can happen. There was some battery storage systems and surprise that caught on fire and three surprise firefighters were actually caught when the battery exploded and they ended up being

[00:41:57] injured by severely injured. They're not dead, but they got burnt pretty bad. It didn't explode. The battery off gassed and they opened up the container because they didn't know what they're doing. This is early on. I think this was in 2018, 2017.

[00:42:15] They opened up the container and those gases met with oxygen and heat and all that other stuff and they just went up and these guys got burned pretty bad. I'm from a consumer standpoint, I'm really excited to see these go in.

[00:42:30] From a public service standpoint or emergency services standpoint, I like to see the companies coming in and giving a lot more training because the way that we work in the Phoenix area is we're all a bunch of different fire departments.

[00:42:46] You have Phoenix is the biggest and then we have all these other fire departments surrounding Phoenix and we have no borders. I could be miles and miles away from my first due on a call just because they needed a ladder truck.

[00:43:05] We were the next available ladder truck based on how our system dispatches were all on GPS. If we roll into one of these places, and I'm sure there's other places in Arizona or

[00:43:20] in this area that have these big battery farms, if we roll into one I'd really like to know what to expect, how we're supposed to handle it. I know if we go into a substation we're not supposed to put any water on anything.

[00:43:33] We actually just stay out until the utility tells us to go in and maybe that's what will happen with these battery locations. It does concern me a little bit. I think it's really neat but it does concern me a little bit about just taking high

[00:43:48] voltage wires and just sticking it into a mega pack and that's all you got to do and eliminate the substation. Substations are definitely dangerous but there's going to be some learning that needs to occur on the emergency services side hopefully before they start doing this at

[00:44:08] any scale because we're kind of aware of what we need to do for a substation. We've all had that training or most of us have. I've not had much training on these mega packs and I'd like to see Tesla get more involved

[00:44:25] in training the departments in the area where they're installing these. Tesla's obviously way more than a car company. We do a lot of software at Tesla. About roughly half or a very huge percentage of the engineering we do is actually software engineering.

[00:44:49] Tesla's as much a software company as it is a hardware company. This is a very big deal because car companies are not software companies normally so this matters a lot. Things like our order bit of software for energy storage, all the software that

[00:45:04] controls the cars, the mega packs, the power walls, the solar. Obviously for AI and full self driving are a big deal. Insurance, service and collision. Tesla also writes a lot of software internally that helps, we call it the Tesla operating system internally.

[00:45:27] That is head and shoulders above what any other company has. I think probably better than any Fortune 500 company. The internal software is just way better. So it's just far more than what people normally think of as a car company. And Tesla's also the leader in real world AI.

[00:45:53] So there's really, this is a big deal. Tesla is ahead of Google, anyone on real world software actually taking in video and making decisions based on video. No one is even close. And it's getting better I say with each passing month if not each passing week. So yeah.

[00:46:22] And it's also worth noting that Tesla is actually pretty good at chip design. So the AI inference chip that was designed by Tesla that's in cars, we had sort of our hardware 3 AI inference. Cars made over the past year have the hardware 4.

[00:46:55] We've just completed design on hardware 5 which we're now calling AI 5. Because it's really is, Tesla actually is not a chip from Nvidia or from, and I have a lot of respect for Nvidia, from any company that we would prefer to put in our car that

[00:47:16] is better than what we have in the car. So we started from scratch in chip design. It says we started from scratch in AI software and have the best real world AI software and the best AI inference chip in the world from nothing.

[00:47:41] So this is a big deal. And the capability of the chips in the car is dramatic. Right now all the cars are actually training, we have hardware 4 run hardware 3 in emulation mode. So we'll continue to make significant progress on hardware 3 but later this year

[00:48:11] we'll actually bifurcate continue working on hardware 3, train on hardware 3 but then do separate training on hardware 4. That will be the training cluster that we're building at the south side of the gigafactory and that will be dedicated hardware 4 video and inference.

[00:48:33] And so the hardware 4 has cameras that have about four or five times better resolution and depending on how you count the hardware 4 it's about anywhere from three to eight times better than hardware 3.

[00:48:51] But everything you're seeing thus far is just hardware 3 and we still have a long way to go before we reach the limits of hardware 3. So hardware 3 I think will still do amazing things but hardware 4 I think will probably do about five times better.

[00:49:07] Then hardware 5 which comes out in about 18 months or so is ten times more capable than hardware 4. It's like a, if you know Nvidia hardware it's sort of a B200 class computer. So you know that's, so what we'll just progressively do is improve how many nines

[00:49:34] of reliability the car gets. And then of course that will go into optimus as well. So the same chip will go into, you know, hardware 4 will go into, it is an optimus. Hardware 5, AI5 which we're switching from hardware 5 to AI5 will be an optimus in all

[00:49:56] cars in about 18 months. And it's really just a staggering amount of compute and it's very power efficient compute. So it's got to be, because if you're in a mobile application like a humanoid robot or a car

[00:50:11] you can't just be sucking down 10 kilowatts like you can in a data center. So you've got to be very power efficient. So the, you know, sort of hardware 3 and 4 are only a few hundred watts. Yeah, yeah, this is hard.

[00:50:37] Now hardware 5 will be able to go probably up to about seven or eight hundred watts but it will power fluctuate contingent upon the complexity of the scene that it is in. So if it is in a parking lot stationary, it's like, you know, don't have to think

[00:50:55] very much just like a person. Like if you're in a complicated traffic scenario you've got to think a lot more than if you're just cruising along on an empty road. But something that I think is potentially interesting down the road is like at some

[00:51:12] point the Tesla fleet I think will probably be, you know, over a hundred million vehicles. And if each vehicle has a kilowatt of efficient inference compute, I think there's a, I think there's sort of an Amazon Web Services AWS type opportunity

[00:51:32] because if you've got a hundred million vehicles with a kilowatt of efficient inference compute, you've got a hundred gigawatts of compute. Like a hundred gigawatts of compute is a lot and it's distributed all over the world.

[00:51:46] So even, so when the car is not in autonomous mode, which I think probably is, you know, doing robot taxi work maybe 50, 60 hours a week but about a hundred hours a week it's not, it's probably stationary.

[00:52:02] So there's a hundred hours of a hundred gigawatts of inference compute which I think we should use. Why not? I mean, I don't know. I'm just going to throw this out here because I paid for my car and I don't want you to.

[00:52:18] Like unless you're going to pay me, I give you, you know, $79 a year or whatever the cost for the cell services. I connect my car to my Wi-Fi. You can't use that compute unless you pay me for it. And that's why not.

[00:52:37] That would be, unless I don't want you to do it. Elon's mentioned this a couple of times in the past and that always gets me. It's a little bit irritating. Like it's not your car, it's my car. I paid a significant amount of money for it.

[00:52:54] It's my car. I don't want you to. You pay me money and not like, oh, we'll throw you a couple of pennies here and there and you pay me what I want to get paid then you're welcome to use it.

[00:53:04] If you don't pay me what I want to get paid, you're not welcome to use it. That's why. We also are no longer compute constrained for training. So I check in with the team.

[00:53:15] It's like, is there anything we can do to improve the pace of progress with respect to training and inference? And currently that is not the limiting factor. In fact, the limiting factor right now is that the amount of miles between interventions

[00:53:30] is so long that it takes quite a while to figure out which version is better than the other version because none of them are requiring any interventions. So it's like, you know, if you start getting to like thousands of miles

[00:53:43] between interventions or you're like 10,000 miles to get an intervention, then like, well, the average person only drives about 10,000 miles in a year. And if it's in an urban environment and the average speed is 20 miles an hour, I mean, so our professional test drivers get pretty bored, frankly.

[00:54:02] You know, they're like, okay, I drove all week and there was no intervention. Like the highlight of the week would be like, yes, an intervention finally. It's like getting to that point. So this is where actually having a giant fleet is extremely important because we can deploy

[00:54:21] a new FSD model and run it in shadow mode and see how well it performs. Compare how the human drives the car versus the new self-driving build. And then analyze that delta in shadow mode like the shadow knows or doesn't know, as the case may be.

[00:54:42] And then be able to assess by getting billions of miles very quickly with the giant fleet. Like basically that data engine is incredibly helpful. Like actually it's not possible to solve the self-driving problem without having millions of vehicles on the road.

[00:55:02] So that's actually the, it's like figuring out clever ways to test which, how good the next build, FSD build is, is actually a limiting factor right now. And then of course, like I said, we are building another training data center

[00:55:22] right here which will be dedicated to hardware four training. So we'll bifurcate hardware three and hardware four training later this year. We'll keep, I think most people here have tried out version 12. We did say unsupervised full self-driving would be version 12.

[00:55:45] So we are actually just keeping the version arbitrarily at 12. And then like calling it 12.4, 12.3, 12.4, 12.5. But it's actually really like version 13, version 14. But anyway, this is an arbitrary designation. So 12.4 is actually like a whole different version than 12.3. And 12.5 is a whole different version of 12.4.

[00:56:12] So you'll see really giant improvements. I think sometimes factor of 10 improvements between successive versions. And then as I mentioned, the way it will work for the existing fleet is we'll be able to add or subtract your car to the fleet as you'd like.

[00:56:31] And there will also be Tesla-owned cars. So it will be a combination of Uber plus Airbnb. But it will be pretty wild that there will be a software update and then the whole fleet suddenly becomes accessible. It's like suddenly you've got seven million, 10 million cars

[00:56:52] that can ultimately, tens of millions of cars that can do autonomous driving. And instead of being used 10 hours a week, it can be used 50 or 60 hours a week. All right. I think that full self-driving is amazing. I'm going to put that out there.

[00:57:11] I think what Tesla's done is amazing. However, I am not seeing what Elon is seeing. And I know that Elon has seen future builds that I have not seen yet. So I get that. However, the build that I was currently on for my beta or my trial drive

[00:57:28] was a build that Elon said it was amazing and it wasn't. It was amazing in that the car can do amazing things. It was not amazing in that it did not live up to Elon's descriptions of what the car can do.

[00:57:42] There were times when I would be on the freeway and it would come up to I need to get off on the exit. And between the freeway and the exit is the gore point and it would get confused.

[00:57:50] There's cars on the road and they don't know what I'm doing, but they see my car just like pausing back or just slowing down and being indecisive. That's not a good feeling by the way.

[00:58:03] I had a time right before the trial ended where I needed to turn left. And in the area that I live in, we have two lanes and attorney lanes. So two lanes each way and attorney lanes. So that's five lanes. Sometimes there's even more than that.

[00:58:20] And I needed to turn left at a light and the car was approaching the light and it didn't know which lane to get into to make the left turn. So there was an inside attorney lane and an outside attorney lane

[00:58:33] and it just kind of shuttered and it was in between going straight or making the turning into the outside attorney lane, which is the one that it needed to get to where I was going. So again, this is great, great technology. This is a huge achievement.

[00:58:52] It would not be here without Tesla. We wouldn't even be close in terms of what we can do with the cars currently. We will eventually get there, I do believe, but I think Tesla's definitely leading the fight in this regard or leading the way in this regard.

[00:59:11] But my experience was not as good as Elon made it out to seem. I made it out to be. Now, I've had some people be like, well, maybe there's just not very many Teslas in your area. There are a ton of Teslas in my area.

[00:59:27] I live in an area that is surrounded by rich people. I am not rich myself. My wife and I were able to buy this house because it was a little bit of a dip market,

[00:59:39] a little bit of a down market, and we got it at a really good price. It still wasn't cheap, to be honest with you, but we got it at a really good price. There are people in my community that have money. When I say my community,

[00:59:51] I'm not talking about specifically my neighborhood, but there are multi-million dollar houses just to the south of me and just to the west of me. There's a lot of money in this area. I can't say that it's ritzy because it's not,

[01:00:10] but there's a lot of money for sure. We have a ton of Teslas. We have a ton of Teslas in my neighborhood. We don't live that far from Scottsdale. There are a ton of Teslas in Scottsdale. There are a ton of Teslas in Gilbert.

[01:00:23] There are a ton of Teslas in Chandler. We are saturated in Teslas. It isn't because the Tesla just drove that path, drove up onto that intersection the first time. It's just not the way that it works here.

[01:00:37] There's just a lot of vehicles in a lot of Teslas in this area. I don't know why it's doing it. Quite frankly, I don't care. It's just not there yet everywhere. I know that some of you have experiences that are way more positive than what I'm describing,

[01:00:55] and I think that's great. However, I do think that there are people out there experiencing what you're experiencing and people out there experiencing what I'm experiencing. On July 9th is when my trial went away. I did not even have, oh man, I really got to pay

[01:01:15] the $99 a month for this. I was like, nah, that's good. I'm fine. If it ever drops down to $25 a month, it's a no brainer. If it drops down to $50 a month, I'd have to think about it before I turned it on

[01:01:28] because I don't know if I'm willing to pay $600 a year right now for what it can and can't do. Now having said that, I just want to reiterate what it can do is pretty amazing. It's really impressive. So it's pretty wild to just be in Palo Alto

[01:01:47] with a bunch of cubes and then a humanoid robot just walks past. We've made a massive amount of progress with Optimus in a short period of time, from someone pretending to be a robot dancing in a suit to a pretty hodgepodgey robot

[01:02:06] to a robot that is actually doing useful tasks in the factory today. So we have two Optimus robots in our Fremont factory that are doing basically this task, which is taking cells off the end of the line and placing them in a shipping container.

[01:02:24] Yeah, we actually have quite a few of these cruising around our offices in Palo Alto. And I think we've got kind of like one major hardware revision, which should be done by end of this year or early next and then we'll move into a limited production

[01:02:47] next year of Optimus, the limited production for use in our factories where we'll test out the product, kind of, you know, as I said, sort of eat our own dog food or whatever the electronic equivalent of that is. So, but I think like next year,

[01:03:06] my prediction is next year we'll have over a thousand, maybe a few thousand Optimus robots working at Tesla. And things are gonna scale up very rapidly from there. So, we'll iron out the bugs. It'll, like the degree of autonomy will be radically better.

[01:03:37] You'll just literally be able to talk to it and say please do this task or I'm gonna show you something. Now do that the thing that I'm showing you. And, you know, get to the point where it can watch a video of something like a person

[01:03:52] and then learn just by looking at that video and do that task. So, yeah. So really it's gonna be quite something. And I'm confident of the prediction that there will be more, like the ratio of humanoid robots to humans will be greater than one to one.

[01:04:19] So that there'll be more than 10 billion humanoid robots in the world. Probably 20 or more. And Tesla's gonna be by far the leader in that. You're seeing a lot of robot startups. But I think it's actually very challenging to do Optimus as a robot startup

[01:04:41] because what we found to make Optimus work, we've had to design from first principles, from scratch every part of the robot. So the motors, the gear box, the sensors, the power electronics, the communication system, everything had to be done from scratch. We found that there's basically nothing,

[01:05:04] there's no supply chain. So even though there are many electric motors made in the world, there's no supply chain for the types of motors and sensors and gear boxes that are needed for a humanoid robot. I mean what you're seeing here is our current generation

[01:05:22] hand and arm, which has 11 degrees of freedom. Our next generation has 22 degrees of freedom. It will be able to play the piano. So it's really like wow. Now of course, like I said, we need to make sure you don't have the terminator scenario. That's very important.

[01:05:42] So safety of the humanoid robot will be very important. But because it requires so much ground up design, designing every motor, gear box, sensor, power electronics from scratch, it's very hard for a startup to, if not impossible, for a startup to replicate that. But at Tesla we have

[01:06:01] the world's best electrical engineering. I think we've got the world's best mechanical engineering for gear boxes and for electric motors, power electronics. So we have the resources to do that. It applies quite well. And then you also have to have the brain.

[01:06:22] You need a power efficient inference computer which we've got for the car and will be using an optimist. You need AI, you need to be the best in real world AI and Tesla's the best in real world AI. So you need all of these,

[01:06:38] you need a very strong hand of cards in order to make a compelling robot. And then you also need to be very good at scale manufacturing. So in order to have the robot not cost like hundreds of thousands of dollars, in order to make it cost like 10 or $20,000,

[01:06:56] you actually need to design for manufacturing and be very good at manufacturing. And what, in my experience, prototypes are easy compared to volume manufacturing. Prototypes are easy, production is hard, relatively speaking. So Tesla has the production capability, it has the engineering capability

[01:07:16] and it has the AI hardware and software capability. And even the most optimistic estimates that I've seen for optimists, the optimist, optimist, I think under count the magnitude of what this robot will be able to do. As I said at the beginning of the presentation,

[01:07:48] I agree with the ARK Invest analysis that autonomous transport is called sort of a five to seven trillion dollar market cap situation. Optimist, I think is a 25, literally 25 trillion dollar market cap situation. Now I don't want to trivialize what's necessary to get there.

[01:08:18] I mean it's an immense amount of work that is required to get there, like super difficult. But we are moving very fast down that road and we're gonna make it happen. So thank you. And I want that to happen. I've said this a dozen or more times,

[01:08:39] I genuinely hate cleaning bathrooms. I'm not a huge fan of vacuuming but I hate walking on things on the floor more than I'm not a fan of vacuuming. So I spend a significant portion of my day vacuuming up stuff. We have robot vacuums as well

[01:08:58] but sometimes it's more efficient just to vacuum it up yourself. Yeah, if this thing would be like, hey I would be happy to do your laundry. I'd be happy to wash your dishes and vacuum and it can walk up and down stairs

[01:09:15] because I got a lot of stairs in my house and it could go outside and it can move the drip lines for watering the trees which I had to do today in the 108 degree temperatures, which wasn't hard. But when it comes to summertime and the heat here,

[01:09:29] I am a real baby about it. So having Optimus go out and take care of all that stuff would be great. All right, that was our last clip. So I'm gonna go ahead and end this here because we're a little bit over an hour.

[01:09:44] I hope you all enjoyed the first part of this presentation, I guess of the Tesla Shareholder Meeting. Tomorrow I'm gonna sit down and go through the user submitted questions or net user submitted the shareholder questions. Sorry about that. We'll make sure to talk about that.

[01:10:05] That portion went over an hour so I'm gonna do a better job at cutting that down into something that's more manageable but we got some good questions for sure. All right everybody, I will talk to you tomorrow. Everybody knows backup and disaster recovery

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