All right, cheese. One, two, three. There we go. I could do a selfie too, but let's not.
I took one.
I appreciate that. All right. As a reminder, if you haven't voted by proxy or would like to change your vote, you may do so by picking up a ballot at the table. Table's back there, in the corner over there. Once you've completed a ballot, please hand it to Lisa Brenton. Lisa, can you please raise your hand? There's Lisa, she's over by the table over there. Of Computershare. She's our Inspector of Elections. What I'd like to do is first welcome Robyn Denholm, our Chair. She's going to give us some opening remarks.
Thanks, Jonathan. Welcome and good afternoon to everybody joining us here live in the auditorium here, but also online. Thank you. Following the formal part of the presentation, or some might say the more normal or boring part of the presentation, Elon will join us to actually go through a presentation as well, which I'm sure all of you are looking forward to. In addition, I'd like to thank and note several people that are in the audience. Our board is in the audience, or many members of the board are here. I'd also like to mention the number of executives from Tesla are also here in the room as well. I'm sorry. I promised myself I would not do that today. Finally, Kevin Healey from PricewaterhouseCoopers is here. Tesla's independent auditor is in the room today.
After the voting, as I said, Elon will give a presentation about Tesla and answer questions. The Q&A is always a highlight of the stockholders meeting. I would like to start today's meeting by thanking you, our investors, our shareholders, for the tremendous support that you've given Tesla not just over the last 12 months, but also over the last many years. Without you, the progress that we're making as a company towards the mission of moving the world towards sustainable energy would not have happened. When you're changing the world and many industries in the process, you need to have a certain amount of intestinal fortitude as an investor. When I speak to many of you, our shareholders, you have that in spades. Thank you. I am incredibly honored to be your Chair.
When I sit back and look at what the company's achieved, in particular over the last year, with GAAP profitability for the second half of 2018 and over 245,000 vehicles delivered, 245,000. Five years ago, that would have just been a dream. Also, over one gigawatt hour of energy storage deployed in 2018. Breaking ground in Shanghai and many, many other achievements. I also take stock at this time of year to think about what we've achieved together over the last five years and over the last 15 years, that many of you have been part of that journey as well. It's truly astonishing what the company has achieved. It's also easy to lose sight of that on a day-to-day basis. There are many highlights to come, and the opportunity ahead of us as a company over the next five, 10, and 15 years is immense.
I want to thank you all for being resilient shareholders and look forward to speaking to many more of you in the months and years to come. I also want to take this opportunity to thank two of our fabulous board members who are actually not standing for re-election today. They are Brad Buss and Linda Johnson Rice. Linda has served on our board for only two years, but it's been a phenomenal two years for her contribution to us, not just as a member of the board, but also an active member of the Compensation Committee. I'd also like to thank her for amazingly positive attitude and her insights on many topics. Also Brad Buss, who preceded me as the Audit Committee Chair and has been on the board for almost 10 years, and he's done amazing work across that entire time.
His contributions to the board have been many, I can't list them all today, but it's been awesome to work with him, and we will miss them both. Now I'd like to reintroduce Jonathan Chang to go through the formal part of today's meeting. Thank you.
Yeah. Thanks, Robyn. Robyn, our new Chair, has been doing some great, amazing work with our board and our company. Really appreciate all the work, Robyn. I am the General Counsel at Tesla, and this starts now I think Robyn referred to it as the boring part of the meeting. Often in my meetings, she refers to me as the boring part of the meeting. This is it. I'm well suited for it. Okay, let's get started by calling the Tesla's annual meeting of stockholders to order. Please refer to the agenda and the rules of the meeting that were provided for you today.
The time is now 2:39 P.M., and I declare that the polls are now open. We have already received over the past few weeks voting proxies from our stockholders, and that means that almost all of the votes that will be counted were already submitted prior to today, prior to this meeting. However, as I mentioned previously, if you wish to submit a ballot to vote your shares or change your prior vote, please pick one up at the table back in the corner by the last door over there and hand it to Lisa Brenton, who's standing there over by the table, from Computershare or any of the Tesla personnel collecting ballots. There's going to be some folks walking around. If you just raise your hand, you can wave them down with the ballots. I'll give a few seconds while people go around and collect ballots here.
Tesla's board of directors has appointed Lisa Brenton of Computershare to serve as Inspector of Election for this meeting. Lisa has taken and signed an oath as the Inspector of Election. Thanks, Lisa. Computershare has certified that starting on April 30th, 2019, the proxy materials or a notice of internet availability of the proxy materials were mailed or provided to all Tesla stockholders of record as of April 15th, 2019. We have a majority of the outstanding shares represented at the meeting. I declare that there is a quorum present and that we may proceed with the meeting. The items on the agenda are as follows. The first proposal, the election of two Class 3 directors, Ira Ehrenpreis and Kathleen Wilson-Thompson, to serve for a term of three years or if Proposal five of our agenda is approved, two years. Proposal two, to approve Tesla's 2019 Equity Incentive Plan.
Proposal three, to approve Tesla's 2019 Employee Stock Purchase Plan. Proposal four, to approve and adopt amendments to Tesla Certificate of Incorporation and bylaws to eliminate applicable super majority voting requirements. Proposal five, to approve and adopt an amendment to Tesla Certificate of Incorporation to reduce the term length for directors. Proposal six, to ratify the appointment of PricewaterhouseCoopers, LLP, as Tesla's independent registered public accounting firm for the 2019 fiscal year. Tesla's board has recommended that our stockholders vote for each of those director nominees and for each of those proposals that I just listed above. We have also received two stockholder proposals as described in our proxy statement. The first stockholder proposal is an advisory vote to recommend that Tesla establish a Public Policy Committee. Our board has recommended that our stockholders vote against this stockholder proposal.
This stockholder proposal is proposed by Mr. Jing Zhao, who is present today. He is here present with his proposal. Mr. Zhao, can you please identify yourself?
Yeah, yes.
Oh, he is up in the mic.
Hi.
Please, Mr. Zhao.
Yeah.
You have three minutes to present your proposal.
Thank you very much, good afternoon, fellow shareholders. I will make it very simple because today is too hot, so I want everybody to enjoy the meeting. Just one minute. Shareholder proposal number seven. Resolved, shareholders recommend that Tesla establish a public policy committee to oversee the company's policies, including human rights, environmental, domestic governmental regulation, foreign affairs, and the international relations affecting the company's business. Especially thank you, fellow shareholders who voted for my shareholder proposal last year for independent chairman. That's 16%. I expect you to vote for my proposal today again. Thank you very much.
Thank you, Mr. Zhao. I would like to remind our stockholders that Tesla's board has prepared a statement in opposition of this proposal, which appears in our proxy statement. We have also received a stockholder proposal for an advisory vote regarding simple majority voting provisions. As described in our proxy statement, our board has recommended that our stockholders vote against this proposal. This stockholder proposal is proposed by Mr. James McRitchie, who is represented here again by Mr. Jing Zhao to present this proposal. Mr. Zhao, you have three minutes.
Thank you very much. Just one minute. Okay. The same thing before. Proposal number eight, simple majority vote. Resolved, Tesla shareholders request that our board take each step necessary so that each voting requirement in our charter and the bylaws that calls for greater than simple majority vote be eliminated and replaced by a requirement for majority of the votes cast for and against the applicable proposals, or a simple majority in compliance with applicable laws. Thank you very much. I make it very simple. Enjoy.
Great. Thank you, Mr. Zhao. I would like to remind our stockholders that Tesla's board has prepared a statement in opposition of this proposal, which appears in our proxy statement. Are there any proxies remaining in the audience that have not been submitted? Keep your hands up, and folks will come around and collect those ballots. Please submit them now if you want them to be counted.
Do you want the microphone?
No. Looks like we have an all clear here. I declare that the polls are now closed. Based on the proxies that we have previously received, I'd like to announce that our stockholders have approved the recommendations of the Tesla board on all agenda items, except item four regarding the elimination of applicable super majority voting requirements in our charter and bylaws, and item five regarding the reduction of our director terms. While over 99% of the shares present and entitled to vote on these two items did so, as recommended by the board, unfortunately, less than two-thirds, or 66 and two-thirds%, less than that of our total outstanding shares, which are required to approve of these items, submitted votes. We will formally announce the results of the voting by filing a Form 8-K within four business days of today's meeting. All right.
That concludes the boring part of this meeting. The official business of today's shareholders' meeting is done, which is now adjourned. I now welcome you to stay for the company presentation, we'll have Elon, our CEO, coming out soon, and then for a stockholder Q&A session with Elon as well. During the course of the session, we may discuss our business outlook and make other forward-looking statements. Such statements are predictions based on our current expectations. Actual events or results could differ materially due to a number of risks and uncertainties, including those disclosed in our most recent Form 10-Q filed with the SEC. Such forward-looking statements represent our views as of today, should not be relied upon thereafter, and we disclaim any obligation to update them after today. With that, please welcome our CEO, your CEO, Elon Musk.
Hey. Hi, everyone. Hello. Hey, thanks for coming. Yeah, I think we've got a lot of interesting news. I think it's going to be well-received. It's been a hell of a year, but a lot of good things are happening, I think it's worth going over those things. Model 3, last four quarters, is actually outselling all competitors combined, in the U.S.
Whoo.
All of them. It's the highest revenue car in the U.S., best-in-class performance. It's actually the best-selling car by revenue, including high-volume cars like the Toyota Camry and Honda Accord. Yeah, I think most people aren't aware of this, but we're about the fourth best-selling by numbers, but the highest-selling by revenue over the past year of any car in the U.S. That's remarkable that an electric vehicle is the best-selling, highest-revenue car in the country. I think 10 years ago, nobody would've believed it. Thanks to the hard work of the Tesla team, this is the result. It's great. As I said, in class, the Model 3 is outselling the Mercedes C-Class, the BMW 3 Series, the Audi A4, S4, and the Lexus combined.
Wow.
That's in units. The difference is higher in dollars. We also have the most energy-efficient cars in the world. This is the EPA miles per kilowatt-hour, and you can see the Model 3 is at around four, then it ranges off to the right. I don't want to pick on the e-tron, but it's There's room for improvement. E-tron. Sorry. If you speak French, that's quite funny. The new Model S is a 370-mile range. We actually did this with MotorTrend. They drove non-stop from Bay Area to L.A. Admittedly, that was downhill, sort of. Not really. It feels downhill, but it's not. On a single charge to go from the Bay Area to L.A. is pretty wild for any car and especially a full-size sedan. The new Model X range is 325 miles, despite it being a large SUV.
It's worth noting that no electric car has exceeded the range of the first Model S that we came out with in 2012. Yeah. Resisting the temptation to pick on competitors, I will not do that. It's a testament to the Tesla engineering team to be able to have made a car seven years ago that has still not been exceeded in range. Now to have a car that's 370 miles, with steady improvements that are likely to occur over the next few years, it won't be long before we have a 400-mile range car.
Yeah.
Yeah. We get this question a lot, and I want to be clear, there is not a demand problem. Okay. Absolutely not. Sales have far exceeded production, and production's been pretty good. We're actually doing well and we have a decent shot at a record quarter on every level. If not, it's going to be very close, but we've got a shot at a record quarter. 90% of orders are coming from non-reservation holders, so these are our new customers. Model 3 market potential when we see trade-ins, 63% of the trade-ins are non-premium cars, which means people are trading up to a Model 3. Yeah, 12% are midsize sedans, 25% other premium vehicles. It's just interesting that a super majority, essentially, of the cars that are being traded in are non-premium. This is a lot of potential.
When people look at total cost of ownership, the actual total cost of ownership, because electricity is so much cheaper than gasoline and the maintenance costs are much less, you don't need an oil change or a filter change. You basically never need to change the brake pads because of regenerative braking. The actual operating costs of an electric car are much less than a gasoline car. It takes a while to educate people on this because the easiest thing to look at is just the lease price or the purchase price. When factoring in fuel and maintenance, buying Model 3 is like buying a Camry or an Accord. It's better from a cost standpoint, yeah. It's a great car. It's a car that is designed for you to have the most fun.
We keep putting gems on it, like the Fart app, of course, that's one of my favorites. Perhaps my finest work. The Autonomy Investor Day, that I think was well-received. The Tesla Full Self-Driving computer is literally 21 times faster than the NVIDIA system that it replaces. We expect to be feature complete with autonomy by the end of this year. You'll still need to supervise the autonomy, but it should be able to go from your garage to your parking space at work without intervention. We'll obviously put on billions of miles of testing, and then I think probably sometime next year, you'll be able to have the car be autonomous without supervision. Sometime thereafter, we'll be able to convince regulators that the autonomy is safe enough that the car could actually go around with no one in it.
The critical elements for that are having billions of miles of testing, ultimately tens of billions of miles. Having a huge fleet, having a very powerful AI inference engine, and that's the Tesla Full Self-Driving computer, and then having the sensors in the car that are necessary for the car to drive. Like having cameras in all directions, radar, ultrasonics, a good IMU, GPS, that kind of thing. I think we've laid the groundwork here for a fleet that essentially every car made since October 2016 is capable of full autonomy, in our view, with a replacement of the computer alone. You just need to switch out the computer. A lot of people were puzzled as to how can I say that we would have a million Robotaxis by the end of next year.
If you sum up the vehicles made since October 2016 and essentially switch out the computers for the ones that were made after the Full Self-Driving computer a few months ago, we will have a million cars that are capable of self-driving. We'll still need regulatory approval, but the capability will be there. This massively increases the value of the car. In fact, I think it's basically financially insane to buy anything except an electric car that is upgradeable to autonomy. It's just nuts. You can see one country after another is putting dates on banning gasoline and diesel cars, and the environmental pressure to move away from fossil fuels is getting stronger and stronger. It's just basically mad to buy a fossil fuel-powered car at this point, because its long-term resale value will be less and less.
It's also important to buy a car that is upgradeable, at least to Full Self-Driving, because a car that cannot do self-driving will also be not worth very much. I've made this comment before. Essentially, if you buy a gasoline car that's not Full Self-Driving, this is like riding a horse and using a flip phone. I'm like, hello? It's not wise. It takes us a bit of time to educate consumers about this, but I think people are starting to get it. A car is a major investment for most people. It's often their most valuable asset. If you're going to make a choice about your most valuable asset, you want to look towards the future and say, where are we headed? Clearly, we're headed towards electrification. Clearly, we're headed towards autonomy. That's the kind of car you want to get.
I think people are starting to realize this. With the Model Y, the biggest segment of vehicles in the world is the midsize SUV. It's two and a half times bigger than the Model 3 market. We think probably demand for the Model Y will be greater than the Model S, Model 3, and Model X combined. We've put a lot of effort into the efficiency of the car, getting incredibly low drag coefficient. I think we might be able to get the drag coefficient actually lower than the Model 3, which will be quite unusual. The car has a lot of room inside. I think a good sense of design or a good design principle is if the car looks bigger, it feels bigger on the inside than it looks on the outside, that is a good design.
This car is actually quite big on the inside. We expect to hit volume production towards the end of next year. Internally, we're aiming for sooner than that, but we want to have some margin on that timing. Yeah. I still find it crazy that we have this Gigafactory. That used to be just rocks. Rocks and bushes. I remember it was JB and Drew. Hey, guys. Actually, do you guys want to come up and join for a sec? Yeah, I think it'd be good, maybe you talk about the Gigafactory and I remember when we were doing the calculations for battery capacity and we're like, "We need more batteries than all of Earth is currently producing." Unless we build this thing, it's not going to happen. Yeah, maybe you tell the story.
Sure.
Yeah.
Good to see everyone. Hello.
Yeah.
It was a pretty crazy story. Elon and I were just talking about it recently. It's sort of amazing how some really simple kind of napkin math could lead to such a kind of outrageous result. As you just said, we basically did the quick math and looked at, we're going to build so many 100,000 cars per year and this many kilowatt hours per car, therefore 35 gigawatt hours of cells per year. That's a huge number. It was actually more than the entire world was producing for all applications, cell phones, computers, cars, everything, just a few years before that. That was what kind of shocked us and said, wow, this isn't going to work unless we build an entire new facility to solve this ourselves.
We'll probably have to get all the battery factories in the world. We better build this. The crazy thing is this was basically I think five slides, and we showed a picture of a factory in the hills, and said to investors, "We need money to build this thing," and they gave us money, which was cool.
We built it.
Yeah, we built it.
It happened.
There it is right there. It's really giant. It's getting bigger. We have about 35 gigawatt hours of capacity potential at Gigafactory right now. Then we're about sort of 70% or 80% of that capacity has been realized. I think there was a bit of confusion earlier this year because Panasonic said there was 35, it's technically yes, but it's not 35 at max capacity yet. It will be, probably, I don't know, end of this year or early next. Then, it's also the lowest cost per kilowatt hour. It's half of all global EV battery production. If you add up all the EVs, all electric vehicles in the world, all the batteries that they use, that's approximately equal to what we make at the Gigafactory.
Wow.
Yeah.
maybe just a quick shout-out to the whole team out there and the team that's made that happen.
Absolutely.
It's been such an epic project. As you said, starting with dirt, literally dirt.
Yeah
in the desert, to now the biggest battery factory in the world, and it took thousands and thousands of people to do it. Kevin had a huge part in that, sitting there. Yeah, it's pretty amazing watching that happen, and I feel super proud to be part of that team.
Yeah. Yeah. We're making good progress on the Gigafactory in Shanghai. If you've watched the progress online, it gets followed with an excruciating detail. I think the number of drones flying over the factory is pretty nutty. We need air traffic control. The shell of the building is basically done at this point. It's the fastest large factory construction that I've ever seen. Maybe there's something faster, but I'm not aware of it, because this is amazing. We're already installing a lot of the factory equipment, the stamping machines. We'll begin installing the paint shop, and the factory module lines and that kind of thing. This will be obviously extremely important to our future because China is the largest electric car market in the world.
To date, we have had to pay import duties, sometimes quite significant ones, ranging from 15%-40%. We did not have access to local incentives because those are only if you make the car in China. The local incentives are going away, I think approximately when our factory starts. I think this is a coincidence, but at least we will not have the cost of the import duties, and it will cost less to make the car in China, so we'll be able to have a more affordable car for the China market. This is extremely important to Tesla's future. Gigafactory Europe. As you can see, we've made great progress here. We just put this picture in literally five minutes ago. This is deep planning here. This is not the actual place that it'll be. This is a generic picture of Europe.
People are going to try and reverse engineer exactly where that picture-
I'm sure people can figure it out.
Beautiful scene.
Yeah, lovely.
Great factory there.
I think it may be near Hamburg or something. We're still looking at what the right place is to put Gigafactory Europe. Hopefully we'll make that decision towards the end of this year. It also makes sense to have a car factory at least on each continent. This is a wise move. We'll continue to expand, I think, our activity in the U.S., but having to not pay tariffs and have a really long delivery chain and high transport costs will make the cars a lot more affordable to people in Europe and in China. Yeah, we're looking forward to making a decision on this, hopefully towards the end of this year. Tesla Energy, we're looking at probably at least doubling energy storage growth for Powerwall and Powerpack compared to 2018.
Internally, we have a bigger goal than that, but I think we can at least double it. It would be at least on the order of two, maybe approaching three gigawatt hours. We're installing the Solar Roof in eight states. We're about to complete version 3 of the Solar Roof. This is actually quite a hard technology problem to have an integrated solar panel or solar cell with a roof tile and have it look good and last for 30 years. Roofs have to last a long time. The amount of testing that one has to do and do accelerated life testing to say, "How can we predict how this will perform if we just spend six months of testing and project that out to 30 years?" It's quite a hard problem, and then making it easy to install, getting the costs low.
I'm really excited about version 3 of Solar Roof. I don't want to be overconfident on this. I think that we have a shot at being equal to a comp shingle roof plus someone's utility costs or being maybe lower than that. That's one of the cheapest roofs available. You can have potentially a great roof with better economics than a normal, fairly cheap roof and your utility bill. If you can have basically a better product at a lower price, that obviously will take off like crazy. It is a hard problem to solve. Many other companies have tried to solve this problem and they've not succeeded. I'm feeling pretty good about this. You guys want to say anything about that, or?
I would just say that the team is super motivated by that goal-
Yeah
We think we can achieve it. We are laser focused on achieving it.
Yeah, true. I've had a number of meetings with Drew. I bang the table, "Damn it, we've got to achieve this.
It can be done.
It can be done.
Intention, intelligence, and invention.
Yeah
Make it happen.
Awesome.
Maybe we should actually introduce Drew properly.
Yeah, actually. Sure.
Sorry, we kind of forgot to do that. Drew, this is your 14th year at Tesla.
Yeah.
Drew's not exactly a stranger. Drew joined my team when it was a tiny team. There were five or 10 of us or something, a couple of years after the company got started, and he's been kind of my right-hand person, involved in almost every key initiative that I've done at the company through that whole tenure, and I think you're super amazing.
I agree.
I-
You think that about me?
I do think you guys should see more of Drew and you've been involved in a lot of stuff and are still leading a lot of key initiatives for us. Anyway, introduction to Drew.
Thank you, JB. Super glad to be here to talk about a lot of our core technology areas that we've been focused on over the years. Just thanks for introducing me, JB. Yeah.
You're welcome.
Yeah, Drew and his team have been really key to a lot of the powertrain innovations, battery innovations, and Solar Roof and a number of other things. It's always a pleasure having those engineering discussions, I have to say.
Mutually. The feeling is mutual.
All right.
Yeah.
Cool. Love you too, bro. We've got the version 3 Supercharger. The scope of technology that is advancing at Tesla is really massive on many fronts. As I mentioned, we've got version 3 of the Solar Roof coming out soon. We've got version 3 of the Supercharger that's being deployed around the world. This is a 75 miles in five minutes capability, a 250-kilowatt system. I'm sure a lot of you have used the Superchargers before, and they've typically been anywhere from 75 kilowatts to, if you've used one recently, you might have gotten up to 140 kilowatts. That's the version 2, then version 3 is at 250 kilowatts. When 250 kilowatts are charging a really efficient car, the miles per minute is super good.
In fact, I think there was recently a test, I'm not sure who it was, tested what car could charge the most number of miles in half an hour. It was the Model 3. Yeah. We'll be publishing new maps for the Supercharger deployment. We're finally going to get the Trans-Canada Highway for example.
Alaska.
We're going to go to Alaska, too. Yeah, actually, this map doesn't even include all of the locations. Really, the two critical factors we've found for sales in any given region, and they're really obvious, actually, are is there a service center within reasonable distance? Are there Superchargers on all the routes that you'd like to take? You don't want to have 80% of the routes because then like, oh, geez, what about that one trip that you can't do now? You really want to have the Superchargers and service centers are the absolute key to sales. Really, we can map our sales to Basically, people are just sensible. They're like, "Oh, okay, you need to service your car, and you need to be able to travel conveniently on long-distance routes." Where we've got that, our sales are good.
We also have to have good consumer financing and make sure pricing is competitive, but as soon as people see that, they buy the cars. It's pretty straightforward. We'll be expanding the Supercharger network quite substantially over time. Also enabling Tesla to use other high-speed charging networks, so we have adapters for that. The key is when you buy a car, you're buying freedom to travel. You must have the Superchargers, you must have high-speed charging, and then if the car breaks, it must be fixed quickly. I'm actually really excited about our mobile service. We have mobile service vans that will come fix your car as soon as it breaks down. We'll immediately send a note to Tesla mobile service, and it will be on its way to fix the car.
We trialed it in the Bay Area, and now we've extended it to the L.A. area and a number of others for tire repair. The van will arrive, give you a new tire in half an hour, and you're on your way. It makes a huge difference. We're adding things like bumper repair and minor collision repair. If I look at the things that most trouble customers, it's things like collision repair taking an eternity. A third-party body shop charging an arm and a leg after taking an eternity. We're moving a lot of the body repair in-house at Tesla, and then even providing it on mobile service. We just did our first bumper replacement from a mobile service van. Typically, collision repair can take weeks or months. In this case, it took less than an hour. That's right.
Cybertruck. The product roadmap for Tesla is incredibly exciting, and with obviously Model Y coming fairly soon, about a year or so. The pickup truck, which we hope to unveil, hopefully this summer. We spent a lot of time on designing the pickup truck, so I think it's going to be great. I think it's the coolest car I've ever seen, to be frank. Not everyone may share that opinion, but worst-case scenario, we build a normal-looking truck. No problem. We know what those look like. This is something that'll, if you're driving it down a road, just look like it came out of a sci-fi movie. It'll be really cool, we think. The Semi, which we look forward to getting into production, hopefully towards the end of next year.
A lot of this also is dependent on our ability to manufacture a lot of cells and make a lot of battery packs. There's not much point in adding product complexity if we don't have enough batteries, then there's complexity, but without gain. We're matching the product rollout according to the scaling of battery production. That's really the main limiting factor. As we scale battery production to very high levels, we actually have to look further down the supply chain. We might get into the mining business, I don't know. Maybe a little bit at least. We'll do whatever we have to ensure that we can scale at the fastest rate possible. To this point, we are going to have a battery and powertrain investor day. That's hopefully this summer, before the end of the year, for sure.
Thank you. I think if I were an outside investor, I would really focus on two things. What is the timeline to Full Self-Driving, and what is your plan to scale battery production and get the cost per kilowatt hour lower? Those are basically battery cells and Full Self-Driving. Those are the two strategic things that are of most importance. Haha, exactly. These are questions that were asked online and then up voted. They're actually really smart questions. Been really impressed with the, I think it's say.com or say something, Say Anything. Yeah. This is a key question, is we've got to scale battery production and match that to vehicle demand. Do you guys want to say anything about that? We don't want to let the cat out of the bag too much, but still in the bag.
I think it's right on. Those are exactly the right problems that we need to solve to scale, and they have been for some time, but it's more obvious now than I think it ever was that we need a large-scale solution to cell production.
Yes. Get the cost per kilowatt hour lower and energy density higher.
Yeah. We're not sitting
Yeah
idly by. We're taking all the moves required to be masters of our own destiny here, technologically and otherwise. I think through all the experience we've developed with partners and otherwise, we have solutions in place.
Yeah. Good question. What aspects of battery production will integration Maxwell have? I think this is really quite strategic, but we'll leave the details of this to the battery and powertrain investor day. There's some very important technologies there that I think will have a big effect on the cost and scaling of cell production, both reducing the cost and reducing the capital required to scale cell production. Anyone want to add to it?
No. Right on. Absolutely.
Yeah. I'm sometimes a little optimistic about time frames. It's time you knew. Yeah. Yeah. Optimism. Would I be doing this if I wasn't optimistic? Jeez. We do actually have Advanced Summon out in early access right now. We're making steady improvements to it. It's close to being amazing. It's not quite there. It's close. There's a lot of complexity in parking lots, it turns out. It'd be very easy if you were on open ground and you summon the car and it just drive to you, that's no problem. If you've got to navigate through a parking lot and you're effectively going through a maze with a lot of obstacles and people moving and cars moving, that's quite tricky. It's close to being magical. I feel good about this going to wide release fairly soon. Yeah.
You want it to be good.
Yeah.
That's the simplest answer. It's got to be awesome.
It's got to be awesome and super safe. We don't want to run anyone over. That would be bad. It's tricky. If you make the car really sensitive, then it just grows paranoid and then doesn't move. You don't want to make it too aggressive. That's bad, too. Really, the threshold is it more convenient to summon your car or walk to your car? If it's more convenient to walk to your car, summon is not that useful. It has to move reasonably fast, certainly faster than you could just walk there. What? Status of Tesla insurance. We're pretty close to being able to release that. We have a small acquisition that we need to complete, and a bit of software to write, but it won't be long before we release that.
Yes, pickup truck event probably sometime towards the end of summer would be my guess. We're trying to create something here that is really new and not just derivative of all the other vehicles on the road. We try to create something new, and it's not just basically a copy of the form factor of everything else. You still want it to be great. It's very hard. This is a very hard thing. Our goal here is to have something that's more functional than an F-150, which is a great truck, and top-selling vehicle in the U.S. Also a better sports car than a basic 911. That's a hard one. It's physically possible, so I think we can do it. Yeah. Do you think Tesla could rely on SpaceX or Starlink?
I think we would have to have a different antenna for Starlink because the Starlink antenna is, I think it's actually probably the most advanced phased array antenna in the world, including military. It's about the size of a medium pizza. It'd be fine for trucks and RVs and airplanes, and any kind of like a house or a business or something like that, but it would look a little odd on the roof of a sedan. We could make a smaller antenna and maybe use it. I think most likely we would continue to rely on the cellular networks. The value of Starlink, the main value of Starlink, is providing low latency, high bandwidth access to sparse and moderately sparse, relatively low density areas. If you're basically rural or semi-rural areas, places that don't have connectivity right now.
I think it's quite a great system. It's probably able to serve like 3%-5% of people in the world. That's a lot of people because of all the people in the world, but it's actually not ideal for high-density cities. It's really to serve the unserved or poorly served is what Starlink's about. We're going to have tiny wipers. I think actually probably just applying some hydrophobic coatings will most likely solve this problem. We had this issue with the front radar, where you can accumulate ice and snow on the front and then the radar can be obscured. If we apply just a thin hydrophobic coating, sort of water repellent coating, that usually solves the problem. Probably something like that. Or we'll just let you know, please clean the snow off the camera. We feel good about demand.
That's I think not a major issue. Profitability is always challenging if you're a fast-growing company. I think that the scale at which Tesla is growing is hard to appreciate. Last year, we doubled our fleet. We made as many cars last year as we had in our entire history. This year, it's going to be pretty similar, at least sort of 60%-80% growth of the total vehicle fleet, maybe more than that. It's hard to be profitable with that level of growth. We could slow down, that would not be good for sustainability and the cause of electric vehicles and solar and storage and all that. I think we can be cash flow positive despite having a very high growth rate. Yeah. What about an update for ride-share?
I guess we could kind of practice a ride-share fleet with people and that would be good for figuring out things for the Robotaxi fleet in the future. This might make sense. We'll probably do something like this. Probably makes sense. Yeah. Sort of a supervised Robotaxi. Yeah, we're happy to take questions from the audience. Wow. Okay.
Grab the water behind you.
Yeah.
Can you pose for a picture?
Sure.
Wait, I didn't get it. Do it again.
All right. Yeah. Not sure which side we're starting with, but I don't know, the right side? Sure.
Thanks for taking my question. My name is Brian Campbell. I have been a shareholder of Tesla for a couple of years now. I try to buy more shares as often as I can afford to. I really believe in this company, its product, its mission, its leadership. I feel privileged to be able to cast my lot in with you, and I want to thank you and the whole Tesla team for all of your hard work and dedication. My question pertains to Tesla Energy. I have read several analyses concluding that significant hurdles along the path towards sustainable energy is transmission of electricity over long distances. Since renewable energy production and capacity is concentrated in certain regions, being able to efficiently transmit that electricity to other regions seems to be an important part of the equation.
I was hoping that you might share some of your thoughts about this part of the equation and if it might make sense for Tesla to someday get involved in electricity transmission. Thank you.
Yeah. I think a big part of the value of Solar Roof or retrofit solar on the roofs of your houses and businesses and whatnot, is that so you can have localized power generation. Then if you have a battery storage, that is also very helpful for stabilizing the grid. You can sort of overproduce energy during the day, and then release it at night and actually use the Powerwall and Powerpack as a massive network for grid stabilization and for providing energy, essentially flowing it back into the grid. That will make a big difference to reducing the need for long-distance power lines. I think very few people want more long-distance power lines. They are generally don't look great, sort of slightly unnerving to drive under them and that kind of thing.
You want localized power generation, and then you don't need to build more substations and long-distance power lines. I think that is the answer.
Storage is a really great way to improve the utilization of the existing transmission grid. The transmission grid is like the highway system. It is very rarely busy.
Yeah.
What storage can do is make it busy all the time, so you get a lot more utilization out of the existing infrastructure.
Yeah. In fact, one of the things I think could be pretty interesting is for utilities. We have done a lot of large-scale utility battery installations, most notably the one in South Australia, which has significantly outperformed their expectations. We are going to be doing a number of other projects in Australia and around the world. We have done some very big projects in California. I think energy storage, as Drew is pointing out, is actually extremely important. You could actually probably locally put Powerpacks in the substation. If you all know what a substation is, sort of like where the high power lines come in and then it gets dropped from, let us say, 11,000 volts to 400 volts or 500 volts, and then it gets distributed to a community.
If you see a bunch of weird-looking electrical equipment with high power lines coming into it, that is called a substation. You could, in that same footprint, fit a number of Powerpacks. Then to Drew's point, when power usage is low, such as at night, it drops considerably. Then you could charge up the Powerpacks and then discharge them during the day. Then you would not need to build extra substations and power lines, which are very disruptive to communities.
That's exactly what the Southern California Edison project was. It was at a substation doing exactly that.
Yeah.
It's a good existence proof.
Yeah.
Tony Mezzapelli, shareholder. China is a place where there's a lot of car action right now. There's a lot of volume over there, a lot of growth markets, and they have 60% of the EVs. I want to ask you about the Giga 3 project and its goal. The building that you're building is a Fremont-scale operation, maybe a little bit bigger, and last year, you said it was 500,000 units per year target. That seems a little bit low to me because-
Okay. Sure. I think it probably-
For a company, for a country like China, that would give us like 29% if the other players, providers, product sellers stay still, which they won't. If we're at volume, going to higher volume, we learn more, get the cost down. That's a good thing. We connect up with the supply chain, which is very powerful over there. Advanced car electronics, batteries, Panasonic, CATL, Samsung, LG, people like that. On the demand side, with no import fees, our cars compare very well to all the other products.
Yes.
The Chinese like Tesla style, luxury, quality, range. Plus, they need help getting rid of smog in their cities. Maybe we could even export from that factory to other Asian factories. Why was the target set at 500? Do you think in China we are being aggressive enough?
Oh, man. Have you seen how fast that China factory's been built?
Yes.
I mean, I have never seen.
Two months or less.
I've never seen anything built so fast in my life. It is pretty epic. Nothing has ever been built so fast in history.
Why not two?
Yeah. Okay. Okay. We can't spend money too fast, we'll run out of it. Yeah. I think long term, that factory will probably do more than 500,000. That's sort of like an interim goal. Maybe it does a million or more long term. Probably we should look at maybe. Like China is pretty big geographically. It may make sense to have factories in other parts of China, in order to reduce logistics costs. A very big impact on the capital efficiency of any company is the time from when you receive raw materials to building the product and then getting the product to the end customer.
If you can compress that time to where ideally, I mean, in the ideal circumstance, you receive the payment for the car before you have to pay for all of the ingredients of the car, then the faster you grow, the more capital you have. It is very important to localize the product production, and have the supply chain be close by and for everything to move really fast. Then you can actually scale, and the faster you scale, the more cash you have. Whereas the counterpoint is if you have to pay for all of the ingredients long before you get paid for the car, which is currently true for cars that are outside the U.S., because we have to put them on a boat, go through customs, then transport them within Europe and China.
Our non-U.S. production is challenging from a cash flow standpoint, because we have to pay for everything long before we get paid for the car. A big advantage of the local production in China and Europe will be solving for that cash flow gap.
Daniel Andy. I'm in the public real estate investment industry. Given the continued need for Supercharger expansion, I think there's an opportunity to partner with a publicly traded real estate company to buy the land Tesla wants for Superchargers or even to buy land Tesla currently owns for Superchargers, structure a lease to just initially cover the cost of holding the land. Through my experience in public real estate, I think there would be huge demand to invest in the necessary infrastructure for EV charging, which effectively for Tesla would finance and aggressively speed up Supercharger expansion while preserving Tesla's capital. Would that be of interest?
Well, most of our Supercharger locations are actually either free or leased at a low rate.
I-.
Actually, sometimes they pay us.
From what I think, though, you provide the capital for the equipment, correct? Even when you get it for free.
Yes.
I'm not sure if it's a lease or not, but even cell tower REITs, they have leases on the land, and then they lease the equipment. Even your equipment could be financed, I think, through a publicly traded real estate company.
Okay. I think that's essentially like adding Superchargers to the asset-backed line. It's a little tricky. When dealing with finance companies, they will generally say, "What's the resale value of that in a worst-case scenario?" Then it's sort of tricky to say, "Who would we sell it to?" That, I think, tends to be their objection. Generally, I think our capital efficiency of Superchargers is quite good, and getting better.
I work in the industry. If you have any questions, I'd love to
All right, thank you.
Hi, my name's Dennis McAvoy. I've been a happy Model 3 and Model S owner since 2012. I believe I'm representative of the vast majority of Tesla owners who are super happy with the company and the product, we think that the next car we're going to get is going to be another Tesla. That's not what we read in the mainstream media.
Yeah.
If that was your only source of information on Tesla, you'd think it was shoddy quality, cars that spontaneously combust-
Yeah
That the-
It is nutty.
That the company is on the verge of bankruptcy.
Right.
We know that's not true.
This is not true.
It's not true.
Yes
I think it's hurting Tesla because I have intelligent friends that are holding off purchasing Tesla cars because of their concern about the future of the company.
Yeah.
The company's done a fantastic job at solving the big issues that confronted them in manufacturing and engineering, and my question is, what's the plan to put more energy behind the marketing communications, and take this issue head on so that the true great American success story gets told?
Yeah. No, it's true what you say. It's very distressing, makes me sad. I'm not sure what to do about it. We do provide a rebuttal, but that is then typically buried like seven paragraphs down, if it's there at all. Some of these things are just incredibly crazy. It's at least 10 times more likely for a gasoline car or a combustion engine car, it's in the name. I mean, come on. It has highly flammable fluid. It's designed to burn. There's about 200,000 gasoline car fires per year in the U.S. alone. It's extremely rare for a Tesla car to catch fire. If it does, it's just incredibly rare, and it's usually some extenuating circumstances. It's very slow, and it's almost never harmful. Would you rather have a gasoline-powered cell phone or a battery-powered cell phone?
I mean, it's like a no-brainer.
I think that if-
So-
You were to put the same kind of energy towards solving this problem that you put towards solving the battery module production problem, you could do it. You could change the narrative.
We're really trying our best. I'm at somewhat of a loss. It's not like we don't respond or anything.
Make a documentary.
Make a documentary. Yeah. It's the most crazy disinformation campaign.
Yes
seen.
Yes.
Yeah.
I'll just say I appreciate your optimism and your passion for the company, and I think that is probably the best asset that all of you bring to the table, and if you can share that with everybody you know and give them the personal experience that you've had in whatever way that you can, that's really our best defense. Please continue to do so, as it seems like you are.
Yeah. I think safety especially, it is paramount for us. It is like the absolute primary thing is to maximize the safety of the car. This bears out in the statistics. It's really hard to have a serious injury in a Tesla. It's quite rare. When you do look at objective numbers, like the NHTSA probability of injury, which is on the internet, the Teslas have the lowest probability of injury of any car I've tested. If it was possible to have a six-star, we would have a six-star. It's absurdly safe. Yeah, there's just a lot of forces that are kind of arrayed against Tesla. Yeah. There's a lot of forces. If you take the contacts, we'll help spread. Okay, sounds good.
Yeah.
We'll give you the information and then you can sort of spread it around. The reason our sales are good is really because of you guys, and it's sort of customer testimonies and referral is the key to our sales. That's why it's good. Yeah.
Thanks, Elon. My name is Steve. I've been a shareholder since 2012, and I've owned your vehicle since 2013, and I've enjoyed both rides.
It's a bit of a rollercoaster.
That's true, but I actually enjoyed it coming in in 2012.
Okay. Yeah.
Just to that last gentleman's comment, it's obviously on your mind, many people's minds, I'm just going to sneak in a little suggestion. You're right, the constructive response is so challenging.
Maybe one little opening would be there are some people, such as Michael Bloomberg, who is both obviously a titan in the media industry and also very publicly expresses his care about the environment.
Perhaps not a debate, a joint discussion to talk about climate change, public awareness, I think you get the point at where I'm trying to go with that.
Yeah.
Have it be something public. There might be other people. I know last year, Arianna Huffington expressed her concerns for your well-being.
Sure.
I think your well-being.
Yeah
would be best served. I think really the biggest issue with the media, and I shouldn't say issue, the biggest challenge, is there doesn't seem to be anybody in the media who's pointing out what other parties in the media are doing. Effectively, utterly false narratives receive a police escort to the public.
Nobody is speaking up about it. That's why I suggest people like Bloomberg or Arianna Huffington.
Sure. That's a good idea. Yeah. Weirdly, there's been quite a few negative articles in Bloomberg.
Yes, there have.
Perhaps talking to Michael Bloomberg would be helpful. I agree we need to take action here. We'll definitely provide people with clear rebuttals of the disinformation. That's a good idea. Because we've done it piecemeal, but there's not really a page that just debunks the myths. You kind of have to put it together from a number of comments that we've made over time. We could put it all together on one page and sort of debunk the myth. This would be pretty good.
Exactly.
Hello, Elon. I'm John from Irvine. With seeing the Model 3 being so successful and the solar facet of your business coming up, I was wondering where you see Tesla is on their mission to accelerate the advent of sustainable transport and what hindrances or facilitators you see in the future in that mission?
I think we've really helped convince the auto industry to move towards electrification. When we first started out, to be clear, I've always felt like electric cars and solar were important from when I was in freshman in college. I just always thought that it would just happen because it's just obviously the right thing from a physics standpoint. This is not guaranteed. I kind of trace Tesla back to 2003 with JB and I having lunch in El Segundo. It was with Rosen. Harold Rosen? Yeah.
Harold, yeah.
Yeah, that was a good conversation.
I think we've made pretty amazing progress since then.
Yeah.
We didn't exactly envision how this would unfold and exactly being here and standing here, at least I didn't.
I thought we just for sure would fail.
It needed to be done. It was clearly something that was worth doing, even if the odds of becoming where we are today or even 10% of that or 1% of that were slim. It was still worth doing. It's pretty awesome to see EVs driving around on every road.
Yeah
all over the place. It's incredible. It's still 1%. While it's rewarding and it's awesome to see where we've come, there's still a long way to go. I feel mixed emotions that we shouldn't pat ourselves on the back too much.
Definitely not. Back in 2003, 2004, there was people thought electric cars were the stupidest thing ever and definitely not going to work and were bad in every way, and were like a milk float or something, or like a golf cart.
Golf cart.
They would not look good or go far or go fast or just they would be just bad in every way. They kind of were. They generally were. Talk about the media situation today, which is very negative, but it's pretty much always been negative, actually. This is unchanged from 2003. You can go way back, 15 years, and it's just like, "Oh, Tesla's the dumbest thing ever. It's never going to succeed." Then it's like, well, I do think there's a good chance we won't succeed, but it's worth trying. All right. Thank you. Now, I think almost every car company has announced electric cars, and some have announced that all of their cars will go electric sometime in the next decade. This is a good thing.
On the energy side, to complete the picture, I guess I would just briefly say 100% renewable grids were in a similar situation, I would say, in 2003, now both Tesla and a number of other partners in this effort are succeeding in taking entire islands, parts of nations, 100% renewable. That shows the growth on that other key aspect of the mission, and that's been personally very rewarding. I know for JB as well, because in 2003, he was the TA of a class I was in, talking all about this.
Yeah, it goes back a while. Exactly. Solar and battery storage, that was also laughed at pretty much. Still kind of is. Obviously, the key to a sustainable future is, I think, primarily solar, obviously with wind and geothermal, but things that are sustainable long-term. You have to have battery storage because generally sustainable energy, like the sun, it doesn't shine 24 hours a day, so you have to have batteries. The three elements of a sustainable energy future are electric cars, solar, and battery storage. We're trying to advance that as quickly as possible, and then I think when we show that it can be done, then other companies try to do it as well, and that's great.
Hi, everyone. My name is Jessica Heiss. As I know, I work in media relations, I'd love to help change the negative narrative. First, Elon, I just wanted to congratulate you on the Stephen Hawking Medal for Science Communication.
Thanks.
My question for you is, as a horse owner, I'm wondering what the towing capacity for the truck is.
Sure. I didn't mean to insult horses earlier, by the way.
No, it's fine.
Horses are cool. It's designed to meet or exceed an F-150. If an F-150 can tow it, the Tesla pickup truck should be able to do it.
Thank you.
Thank you.
Elon, we're at about 90 minutes. Do you want to take one more question from each side?
Yeah. We can do a few more questions.
Okay.
That's fine.
Hi, Elon. My name's Caleb Elson. I recently got my Model 3, and I'm happy it has Hardware 3 in it. I watched the Investor Day for autonomy, and you talked a lot about the FSD chip, the neural network, but you didn't talk much about the gap between Navigate on Autopilot today to the end of 2019. I was wondering if you could geek out a little bit where we're going to go from now till December, January, February, feature wise. Is that already running in your cars, like the demo, and we're going to cherry-pick it? Or what gives you the confidence that feature complete, not hands-off, but feature complete.
Yeah
is possible, can you excite us a little bit about what that's going to be like? Thank you.
Yeah. When I drive the latest development version of the software, it can take me from my house to the office, but there are interventions at times. It doesn't perfectly deal with every intersection or every turn. I think it's possible to, one could obviously just game the system and just make it perfect for a particular route, but then that's just going to work on that route, and then if that route changes or there's construction, then it won't work. It's very hard to come up with a general solution. When one reads about these other self-driving car companies, the issue is that they have very specific solutions, but they're brittle. They rely on very high-resolution maps, a lot of LiDAR, a high-precision, really expensive GPS and inertial measurement. Even then, it's just not a general solution.
If they go off the route that they're used to, they don't work. When we release something, we're releasing it to 500,000 cars and all over the world. It has to be a general solution. Our progress may appear slower than it actually is relative to others that are developing self-driving technology. In fact, I think it is quite a lot more advanced, because any element that we release is a general solution.
There's also like a plateau that you will reach.
Yeah
the alternative approach that, just having experienced with the team, a lot of the work ahead of the investor day, the trajectory is crazy, especially with the advanced compute capability that we have. That's my personal comment on it, I guess.
We learn a lot of in terms of what should we train the neural net to do? Once we discover, okay, we need a net that's going to really effectively recognize curves, for example. Previously, we trained the nets on free space. Free space is just anything you can drive on that's not going to destroy the car. This is not comfortable if you're just driving on dirt or the car just drives over the grass. Technically yes, but this is going to be disturbing. Road edge and curb are two training nets that we are developing right now to say this is independent of drivable free space.
You want to know what drivable free space is for an emergency, so if you need to go on the shoulder of the road to avoid something, then okay, free space is important, but then you also need to know where does true road space end? Because it's undesirable to go past true road space. Especially for parking lots and tight corners, just recognizing curbs. These little details, they're very important. I have most of this working in the development version that's on my car. I have actually two dev branches. One for enhanced summon and one for Full Self-Driving and two different cars. It would not be good to release that to the general public, I think, quite yet.
Thank you.
All right.
Hi, Elon. Hi, JB, Tesla team, and Tesla board. Huge fan. Best wishes and lots of love from India.
Oh, thank you. Are you from Let me guess.
You guys have a great team, and you guys are the problem solvers. Thanks for persevering all the way through the financial, intellectual, business problems. Elon, you are such a visionary and a leader. Thank you so much. It puts a smile on my face when I hear Gwynne Shotwell point out to Mars as it's the fixer-upper of a planet.
Oh, it's true.
You instill those values into your employees and every fanboy out there. Thank you so much for all that.
Okay.
To ask a question, what do you ask this team, which has put a Roadster up in freaking space, right?
Yeah, that's true.
Actually, I'm out of questions on that part. I thought to myself, any more things? No. I've always felt bad for Nikola Tesla, who has been a great inventor of our time. For a genius that he has been, he was always constrained by funds to run his experiments. As a result, world lost so much more. Did history repeat itself? I don't know. Maybe. It's up to us not to repeat the same mistakes and find this Tesla, this time, to make impossible a reality. As Uncle Ben rightly said, "With great power comes great responsibility." People and organizations with excellent balance sheets, you have the power to invest and make a difference, and hence you have the responsibility to do so. It's time big companies unite when it comes to welfare of the planet and sustainability of the generations to come.
Speaking of great companies, who knows better than Berkshire Hathaway of picking a great company. As the market paradigm has now shifted from buying profitable companies to buying companies who are innovating and changing the world for the better, I request Berkshire management to consider investing in Tesla for the long term. Why? Because you want insurance, they have it. You want automobiles, they have it. Electrification, they have it. Utility, they have it. Robotaxis, they have it. What do you want? They have it. Because there has never been a better opportunity for the world, and there has never been a better buy price for Tesla in 2019 than right now. Lastly, congratulations to all the Tesla shareholders in advance, who sooner or later are going to be part owners of this trillion, multi-trillion dollar behemoth.
To Elon and team, thank you so very much from all of us and the future generations, who will want to thank you and your team for all the great work you did, you do, and you will do. Cheers.
Oh, thanks. Cool. Thank you. Much appreciated.
Elon, when can I sell it down to India?
I thought that question may be asked. I hope soon. The rules for importing to India are kind of complicated. Yeah. We definitely want to come to India. There are complicated rules around the tariffs for importing and then what you're allowed to do for sales and service. We're currently able to sell as many cars as we can make. Adding additional complexity is not required right now. I think we really want to come to India as soon as we can. I think I'll be really surprised if we're not there by next year.
Whoo.
At least next year, I think. Yeah.
Whoo.
All right.
Hello.
Right.
Hello. Good afternoon. My name is Jennifer Bear, and I'm here on behalf of PETA, People for the Ethical-
Okay
Treatment of Animals. Hi.
The steering wheel.
Hi. Yes, the steering wheel. You got it. During last year's annual shareholder meeting, you assured us that the Model Y, quote, "Would not have any leather in it, including in the steering wheel, if it does have a steering wheel," end quote. We have tried confirming this privately, but have been met with silence, and the website does not specify. It's also our understanding that all current Tesla models come standard with a leather steering wheel and need to be special ordered to be vegan.
That's true, currently.
As you know, the United Nations reports that animal agriculture, which includes the leather industry, is responsible for more greenhouse gas emissions than all of the world's transportation combined. The Higg Index has found that in terms of water scarcity, climate change.
No, okay, I totally agree. I actually asked this question of my team earlier this week, I believe we're close to having a non-heated steering wheel that's not leather. There are some challenges when we heat the non-leather material and also how well it wears over time. A steering wheel, it actually really needs to be very hardy because there's a lot of, basically oil and sweat and stuff on our hands. It gets kind of nasty if you don't have the right surface treatments on the material.
It's an easier proposition to solve it for seats than it is for the steering wheel. It's actually a remarkable amount of effort to solve for the steering wheel. It is a thing that we're working on and hope to release soon.
That's fantastic. Can you confirm the Model Y will be vegan as promised?
Yes, it will.
That all of Tesla's models will be free of animal products by next year's shareholder meeting?
There might be the tiniest bit left, but I'm not sure. Model Y, Model 3, I think I'm confident about that. We have a lot of things to solve. I think we can for sure the Model Y and the Model 3 soon. Then you can also special order for the S and X.
Thank you very much.
Thank you. All right. Next. Over here.
Yeah. Hi, I'm Dan Houck. I just have a quick question, that is, you've expressed your frustration. I think we're all frustrated with the media narrative around Tesla, you've expressed your frustration in refuting some of the false information out there. There's another alternative to that, which is to proactively advertise. My question to you is, are there any thoughts to revisiting the advertising decision? Thank you.
Sure. Well, as I was saying, currently, we are selling more cars than we can make. Spending money on advertising would make things worse financially. Sure, it would probably increase demand, but we're selling more cars than we can make. It's not a thing that's necessary right now. We're trying to make as many cars as possible. Yeah. I think advertising, generally, I have had an aversion to advertising because there's just too much trickery in advertising. There's a lot of false association where they'll have a bad product and then put it in a nice environment with good-looking people and then trick you into buying it. It is common. Then some of the advertising can be quite strident. It just tends to be sort of bad. I don't like advertising for that reason.
We could have advertising as information to refute some of these issues.
Yes, yes.
It's tricky, though, because if you have an ad that says, "Look, our cars don't catch on fire." This is BS. People might think, "Are your cars actually catching on fire? What's going on?" Because there's so much trickery in advertising. Maybe the opposite thing is happening. I wouldn't say that we're against advertising forever. It hasn't been necessary thus far. Yeah.
What about a short film or documentary contest and then the filmmakers spend their dimes to make this as a contest, a challenge, a film challenge?
Sure, that could be cool. Absolutely. Yeah. We'll definitely give this some thought. These are some good suggestions. Thank you. I'll do one last question.
One last question?
Yeah, last question.
Okay.
Hi, everyone. I'm Lux Feela Day. I have a really exciting question. Will Tesla make aquatic cars, and if so, when?
Do you mean like a quad bike or something? What do you mean quad car?
Aquatic car as in-
Oh, aquatic
boat or submarine car.
Oh, R, I see. Okay. You mean a car that can go in the water, basically.
On or under or both, the water.
It's funny you should mention that. We do actually have a design for a submarine car like the one from "The Spy Who Loved Me," the Lotus that turns into a sub. I thought that was the coolest thing I'd seen in a movie, so I actually have that, the ones from the movie. That one cannot actually transform because it has fins where the wheels are. It's obviously not going to work. If you make it a bit bigger, then you can actually have a submarine car. It's technically possible. I think the market for this will be small