274 annotations
On the cost question, I guess, from the vehicle side, like as Drew mentioned earlier, we are always trying to engineer our products to be cheaper to make and more efficient to make. That comes obviously on the engineering side as we come up with new innovations but as well on the supply chain side with our partners, we work with them to automate some of their lines, remove their bottlenecks and their high cost as well.
cost discussion
Transcript
2023 Q3
22 Nov 23
So I just can't emphasize again how important cost is. It's not an optional thing for most people. It is a necessary thing.
We have to make our cars more affordable that people can buy it. And I keep harping on this interest thing, but I mean it just raises the cost of the car.
affordable cars
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2023 Q3
22 Nov 23
I think that there's very significant price elasticity. I mean to be totally frank, if our car costs the same as a Rav4, nobody would buy a Rav4, or at least they're very unlikely to. It's worth noting that a lot of these incentives like the tax credit and whatnot, they're actually very difficult for the average person to access because they -- most people do not have $10,000 or even $7,500 burning a hole in their bank account. A lot of -- a large number of people are living paycheck to paycheck and with a lot of debt. They've got credit card debt, mortgage debt.
So yes, it's -- that's reality for most people. It's sometimes difficult for people who have high income, and when I say high, it'd be like someone who's earning over $200,000 a year, to understand what life is like for someone who is earning $50,000 or $60,000 or $70,000 a year, which is most people.
So like, for a lot of people, like, this tax credit just -- they can't front $7,500 for 18 months or even 6 months to -- for the tax credit, and they actually don't, in some case, even have that $7,500 in taxes.
So it's really just the vast regard to people is how much money do they have to pay immediately and how much per month. That's it. They stop right there. And our car is still much more expensive than a Rav4 when you look at it that way.
price elasticity is an issue
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2023 Q3
22 Nov 23
You've taken now about $2,000 out of the average vehicle costs over the past year. Can you give us maybe a sense of the rate of improvement that you see from the changes that you alluded to, the factory changes you alluded to?
2k out of cost per vehicle
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2023 Q3
22 Nov 23
f you try to make -- if we just try to do some copycat vehicle design, of which there are literally 200 models that are slight variations on a theme in the combustion engine world, just distinctions without a difference, then it's really not that hard. But if you want to do something radical and innovative and something really special like the Cybertruck, it is extremely difficult because there's nothing to copy.
You have to invent it, not just the car but the way to make the car.
cybertruck is uique so harder to cost replicate
Transcript
2023 Q3
22 Nov 23
as interest costs in the U.S. have risen substantially, it has required us to adjust the price of our vehicles to keep the monthly cost in parity. We've tried to offset such adjustments via our focus on reducing costs.
However, there is an inherent lag in cost reductions, which in turn impacts margins.
interrest costs up so price down, but cost reductions lag
Transcript
2023 Q3
22 Nov 23
As Elon mentioned, our Q3 operational and financial performance was impacted by planned downturns for our factory upgrades. This was necessary to allow for further factory improvements and production rate increases. Despite those factory shutdowns, our cost per vehicle decreased to approximately $37,500. We saw sequential decreases in material costs and freight. Reducing the cost of our vehicles is our top priority.
cost per vehocle declined, factory shutdowns to improve production
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2023 Q3
22 Nov 23
the energy division is becoming our highest-margin business. Energy and service now contribute over $0.5 billion to quarterly profit.
energy diviision + service =.5bn in Q profit
Transcript
2023 Q3
22 Nov 23
As Elon mentioned, our Q3 operational and financial performance was impacted by planned downturns for our factory upgrades. This was necessary to allow for further factory improvements and production rate increases. Despite those factory shutdowns, our cost per vehicle decreased to approximately $37,500. We saw sequential decreases in material costs and freight. Reducing the cost of our vehicles is our top priority.
cutting cost per vehi cle
Transcript
2023 Q3
22 Nov 23
So I just want to temper expectations for Cybertruck. It's a great product. But financially, it will take, I don't know, a year to 18 months before it is a significant positive cash flow contributor. I wish there was some way for that to be different, but that's my best guess.
cybertruck drain on cf for 12-18 months
Transcript
2023 Q3
22 Nov 23
The Cybertruck, I know a lot of people are excited about Cybertruck, I am too. I've driven the car. It's an amazing product. I do want to emphasize that there will be enormous challenges in reaching volume production with the Cybertruck and then in making a Cybertruck cash flow positive. This is simply normal for -- when you've got a product with a lot of new technology or any new -- brand-new vehicle program, but especially one that is as different and advanced as the Cybertruck, you will have problems proportionate to how many new things you're trying to solve at scale.
So I just want to emphasize that one.
cybertruck will take time to reach FCF+
Transcript
2023 Q3
22 Nov 23
that gives us the ability to be pretty deliberate in the 4680 ramp
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2022 Q1
21 Oct 23
we have sizable cell inventory at the moment
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2022 Q1
21 Oct 23
4680 output is not a risk to achieving 1.5 million vehicles produced this year, but it would become a risk next year if we do not solve volume production by early 2023
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2022 Q1
21 Oct 23
we will be in volume production with 4680 sometime perhaps towards the end of the third quarter and certainly in the fourth quarter
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2022 Q1
21 Oct 23
the 4680 and pack tool installations here at Giga Austin are progressing well with some areas producing first parts
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2021 Q4
21 Oct 23
we believe our first 4680 vehicles will be delivered this quarter
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2021 Q4
21 Oct 23
in Texas, we're building the Model Ys with the structural battery pack and the 4680 cells, and we’ll start delivering after final certification of the vehicle, which should be fairly soon
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2021 Q4
21 Oct 23
If interest rates start coming down, we will accelerate.
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2023 Q3
21 Oct 23
I don't want to be going at top speed into uncertainty
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2023 Q3
21 Oct 23