Xinhua / Ding Ting via Getty Images
On Wednesday afternoon, Tesla CEO Elon Musk answered questions from investors following the release of the company’s latest quarterly results. The main news is that Tesla has chosen Texas as the site for its next factory. When asked how many cars this new auto plant could build, Musk replied, “In the long run, a lot,” with a smile.
Musk declined to be carried away by specific details about new Tesla EVs beyond what we already know. “It is reasonable to assume that we would make a compact vehicle … at some point,” he said, noting that the company has a long way to go with the 3 and Y models.
The largest asset value increase in history.
Musk still believes that the introduction of a fully autonomous driving system will be a game changer for Tesla, and predicted that it would lead to a five-fold increase in the value of a car thanks to much higher utilization. Regarding that program, the “main milestone is the transition from the autonomy system, or automobile AI, from thinking about 2.5D, doing image recognition, partially correlated over time, to 4D. What we’ve been doing up to now it’s really 2D and not well correlated in time. It’s hard to convey how much better a full 4D system would work, “said Musk.
This architectural change has yet to be implemented in customers’ cars, but Musk predicted it would happen later this year. “Then it will be a long march of nines,” he said, referring to the quest to improve the safety margin from (for example) 99.999 percent to 99.999999 percent. “How much better than humans does it need to be?” he asked, adding that “every order of magnitude is very expensive.” Later, Musk said that we should be concerned about the direction that AI research was headed and that “smart people can’t imagine a computer being much smarter than they are.”
By the time Tesla’s robotaxi service is available, Tesla will provide commercial insurance coverage.
Building cars more efficiently
Tesla is becoming “much better” in car manufacturing, Musk said when asked about the “alien battleship.” However, he noted that there is “10,000 percent more engineering required to build a factory than the product itself.” Production in Shanghai is more efficient than in the United States, a trend that would accelerate with the company’s third factory in Germany. Getting there will require making cars that can look the same as those made in the US or China, but Musk said they would be very different under the skin to facilitate production. “The architecture of the Model Y built in Berlin will be fundamentally different,” he revealed.
Other redesigns to existing vehicles could emerge due to Tesla’s experiment as an insurer. Citing the high costs of accident repair, she said that in the future, “we can adjust the design of the car and how the repair is done.” (Other insurance data included a future UX vehicle that could warn drivers not to accelerate unless they want their premium to increase and Tesla’s desire to hire “high-energy actuaries, revolutionary actuaries.”)
Current supply chain efficiency, or lack thereof, also increased when Musk was asked about current demand for Tesla’s electric vehicles. “The costs were related to having to use planes to move parts,” he said, adding that short-term improvements include changes to the Model Y rear body frame at the California factory, from two parts to one. . “Demand exceeds supply right now,” said Musk.
Making each factory more efficient requires sourcing more components locally. At the Shanghai Gigafactory, he said that local content has increased 5-10 percent per month and that “it should be 80 percent by the end of the year.” And the Berlin Gigafactory is well located: “A ton of our suppliers are within a few hundred kilometers of the factory,” he said. In addition, the battery cells for Berlin will be produced locally.
Finally, Musk had some ideas for European lawmakers. “Job mobility in Europe is low. I would recommend changing it. Someone wants to leave and join another company; they have to go six months without doing anything, that’s called a gardening license,” he said.
Iron phosphate versus nickel-based cells?
Some of the most interesting information about the call followed a question about the Tesla Semi. Production of this heavy-duty battery EV is still slated for this year, and Tesla will use the first production Semis internally to transport batteries from the Nevada Gigafactory to its automobile plant in Fremont, California. And to have enough energy-dense cells for the Semi (and other vehicles), Tesla will switch to the use of cheaper iron phosphate cell chemistry in vehicles made in China.
“It is very important to have a long-range package and mass efficiency” for the Semi, Musk said. “What we are seeing with passenger vehicles, our total vehicle efficiency has become good enough to be comfortable with an iron phosphate battery pack [in Chinese Model 3s]”In fact, no other company can match Tesla when it comes to the efficiency of electric motors. The Chinese chemical change will happen in 2020, and Musk predicted those vehicles would have a range of” nearly 300 miles. The new normal range in terms of the US EPA. [for a new BEV] It will be approximately 300 miles, call it approximately 500 km, “he said.
Musk asked for more raw materials for battery production. “Any mining company out there, please mine more nickel,” he asked enthusiastically, adding that it must be mined efficiently and in an environmentally sensitive manner.
Tesla’s future
In the long term, Tesla’s power will be the same size as the auto business, Musk predicted. “Tesla’s mission is to promote sustainable energy. Both battery and solar will be huge, and they must be for us to have a sustainable future. The true limitation of Tesla’s growth is the production of cells at an affordable price,” he said. . calling that the company’s “fundamental scale constraint”. Lithium-ion batteries are already cheaper than ever, but the price is still high enough that 300-mile BEVs are still more expensive to produce than their conventionally powered cousins.
“Anywhere from mining to refining cathode and anode formation, cell formation, whatever the term, will set the growth rate. We look forward to expanding business with CATL and LG, there is much more to say. battery day, “he said, referring to an event Tesla is holding in mid-September.
Musk was asked about balancing cost-effectiveness versus making cars more affordable as a way to drive EV adoption. “We can go beyond the margins of the industry and still have the car within the reach of almost everyone,” he said. “There is good value for money, and then it is affordable. If people don’t have enough money in their bank account, then you have an amazing thing that no one can buy,” he explained, adding that “our cars don’t they’re affordable enough: we need to fix that. We’re making progress on that. We need to not go bankrupt, obviously, but we’re not trying to be too profitable. One or 2 percent, it’s not too crazy. A little profitable and maximize growth, making the cars as affordable as possible, “said Musk.
