Big focus for Tesla over recent history is expansion and globalization of Model Y program
Investor Day will be broken up into 5 parts
“What does it take to to convert Earth to sustainable energy generation and use”
Master Plan: Part 3 (Elon Musk & Drew Baglino)
Tesla’s big goal is to show that there is a clear path to sustainable energy on Earth without destroying ourselves or the planet
Detailed white paper will be published with their assumptions and calculations
Over 80% of global energy comes from fossil fuels
Half problem statement of fossil fuel economy
240TWh of battery energy storage to achieve that (combination of EVs and stationary storage)
8:1 ratio assumed meaning for 30TW of power we need 240TWh of energy storage
This is not a big number relative to the global economy
Electric economy will mine less ore than with fossil fuel economy
All forms transportation (minus rockets) will go electric once energy battery production ramps enough
All cars will go autonomous and electric, only a matter of time
Conservative estimate based on assumptions around fleet size
In reality fewer vehicles will be needed thanks to autonomy
Heading rapidly towards autonomous & electric future
Model 3 can go one mile on the same amount of energy it takes to boil a pot of water for pasta, and another to cook the pasta
Modern EVs are extremely efficient
Heatpumps are air conditioners in reverse that will be used to displace fossil fuel heat sources in homes
At some point they might make heat pumps for homes
Hydrogen could replace coal for things like steel production
Needed for industrial processes
Shipping accounts for 3% of global CO2 emissions
Even w/ LFP long haul ships can be electrified
Short haul planes easily doable, long haul flights will be in reach soon enough
Long haul ships & planes need to be redesigned and switched to a different architecture to take advantage of electrified fuel source
450wh/kg is needed to convert long haul planes & ships to electrification and it already exists
Tesla wants to produce 1TWh of energy per year as soon as they can
Building a sustainable energy economy is less than sustaining existing fossil fuel economy
Only requires 0.2% of available land
Switching would dramatically reduce impact to environment
68 Gigatons of ore every year with fossil fuel economy
Greatly reduced with switch to sustainable economy
As we extract resources, we find more
As Tesla has continued to grow, more core resources have become available
Vast majority of heavy lifting in terms of electrified transport can be achieved by lithium iron phosphate batteries
Only long range vehicles need nickel-based Lithium batteries
Recycling efforts will make this ramp require less and less mined ore over time
Vehicle Design (Franz von Holzhausen & Lars Moravy)
Today Tesla produces cars differently than they did 10 years ago
Starting building cars around the following process: Design -> Engineering -> Manufacturing
Able to combine design, engineering, manufacturing process with the Model 3
Things didn’t go as planned which resulted in production hell
Model 3 is the best selling EV ever, Model Y fast approaching
With Cybertruck they changed the game by starting with manufacturing process which then fed into the design process
Stainless steel opens up many doors for Tesla since they don’t have to paint them, panels don’t need to be stamped, etc.
Product Development Process now looks like this:
Everything rolls up in one organization in Tesla
This process was first created by Ford over a hundred years ago
Very clunky for example doors are attached, removed, and then re-added once interior and glass is installed during the production process
With Model Y structural pack they began dramatically simplifying production by about 10%
Final process will look something like this
Only paint sides and parts that need it
Refer to this as the unboxed process
New process results in 40% reduction in footprint
Faster, less capex, more units per dollar
Can reduce costs as much as 50%
Next gen platform will be unveiled at a later date
Powertrain (Colin Campbell)
Plaid is faster than a Porsche, more efficient then a Prius
Model Y has most efficient EV SUV powertrain on market
Tesla was able to do this by designing entire vehicle and factory under one roof
Tesla’s homegrown charging package can handle 2x as much heat as anything available on the market today
Tesla was able to cut costs and mass of charging package from original Model S in half thanks to advancements & expertise in high powered electronics
Tesla wrote their own motor simulation software which allowed them to quickly iterate through millions of drive unit designs
Engineer who designs components are always in same room as people responsible for manufacturing them
Tesla has figured out how to use 75% less Silicon carbide transistors
Nobody close from a cost perspective for drive units
Next powertrain factrory will be 50% smaller with same output as current
No rare earth materials at all required for new drive units (permanent magnet)
Electronic Architecture (Pete Bannon & David Lau)
Over 300 low voltage devices (glovebox lights, airbags, etc.)
Wiring harnesses present a lot of problems especially during initial development
Reduced wiring harnesses by 17kg from Model S -> Model 3
Combined controllers to reduce wait and ease manufacturing
Model 3 controllers were enhanced and added to Model Y and then reintroduced back to Model 3
Same controllers were updated and leveraged in refresh Model S & X
Tesla designs 85% of controllers in Cybertruck and will give them advantage in supply chain-constrained world
Control includes control over software and features nobody thought of originally
In 2017 they deleted relays & fuses from car in favor of E-Fuses
E-fuses replace moving parts with solid state transistors that provide fine grained control of power system to software & allow software to do advanced things like load shedding in adverse conditions
Software controlled hardware is fundamentally about being able to side step tradeoffs with a particular piece of hardware
“More of everything”
Expect Li-Ion low voltage battery to last the life of the car
Eliminates a major source of failures for Tesla
Use a new tool-less connector which makes easier to service
Includes software that allows validation that connector has been installed after a service event
Been able to dramatically improve the 3 & Y center display:
Cost has been reduced 24%
Weight reduced by 12%
Reduced power by 33%
Increased brightness by 50% while also improving color accuracy
Demand for in-car power is substantial at around 200A meaning thick wiring harnesses to achieve this with 12V architecture
With Cybertruck and future platforms Tesla will be moving to 48V which reduces current factor by 4
16X reduction in lost power, small wires, smaller e-fusers, smaller heatsinks (or removed completely), etc
48V is future for low voltage design at Tesla and rest of industry
Amount of wiring in cars is driven by number of endpoints
With Cybertruck, Tesla is moving to a local controller where the wire is connected to nearest controller and controllers are connected via ethernet
Design has eliminated most of cross car wires in Cybertruck and with next gen platform they all will be eliminated
Consolidated vehicle network allows Tesla to make some pretty clever changes on the fly without redesign
You can see the entire vehicle with this architecture
Software (David Lau)
OTA updates and data insights gives Tesla ability to iterate quickly & maximize impact per iteration
Example: Monitor usage of sunroofs and eliminate them based on that
Have ability to harvest real world crash data and make vehicles safer
Everyday they collect data for 123M miles of driving and 1.9M charge sessions
Allows them to fine tune battery sizes in future products
Use collected data to map out rough roads and adjust suspension on Model S & X accordingly
Before this was sent out to customers, it was pushed out to vehicles in the real world to see how it would perform
With Model S they realized there are a lot of ways to miss things when manufacturing (pull part from wrong bin, miss connecting wires, etc.)
“Test early, test often”
When a production associate plugs something into the car, the software now automatically confirms it is the right part, installs software update if necessary, runs calibration, runs tests, and if problems are experienced calls humans for help
Service is treated the same way where they are using AI to automatically transcribe customer issues, problem solve, and order parts as a result
In 2021 Tesla added ability to share vehicles with others
In 2022 Tesla introduced cloud profiles which allowed driver settings to be shared across vehicles
Internally Tesla has an app that allows employees to locate and drive all Tesla-owned vehicles at their site
Loaner vehicles are now getting added to customer’s account so cloud profiles sync and the experience is completely seamless
Full Self-Driving (Ashok Elluswamy)
Ashok has been working on FSD for 9 years now at Tesla
FSD is a critical part in a sustainable future as it allows vehicles to serve other customers to benefit society when their owners aren’t using them
FSD is one of the hardest real-world AI problems out there currently
Tesla has made significant strides in developing one of the most general systems available
Architecture
Tesla is betting on AI mission learning NNs to build a general vision & planning system
In old days they had single camera, single frame NNs
Very brittle and struggled in many scenarios
Tesla in 2022 transitioned stack to multi-camera NNs which take in live feed from car (8 cameras) and produce a single, unified 3D output space
Reach out to techniques outside computer vision such as language modeling
Using technologies such as transformers to make system more accurate & computationally efficient
Even planning system is not stuck in old way (C++) and now uses NN-based planners
These are needed in complicated urban environments where lots of objects are present & interacting with us
If we did this using old approach, each approach would take 10ms and likely 1000 approaches would be needed
Now joint planning can be achieved in 50ms
Data
Built auto labeling pipeline that Collects data from fleet, runs computational algorithms in data centers, and produces labels to train these networks
Data alone can improve corner cases for example in phantom braking scenarios
Compute
Massive amounts of compute is needed to continuously train these models
30PB of video cache growing to 200PB
These numbers will increase as Dojo training computer comes online
FSD Beta has been shipped to 400,000 customers in US & Canada
Hired a world class team to execute on FSD vision
Requires human assistance for now but that will change in the future
Optimus (Elon Musk)
Optimus v2 which wasn’t even functional during AI Day is already well on its way and now able to walk around & perform functions
Goal is for Optimus to be able to learn based on demonstration or verbal instructions
Actuators need to be custom designed for humanoid robots
Designed by same powertrain team that designed Plaid drivetrain
Might exceed 1:1 ratio of humanoid robots to humans
Elon is not sure what an economy means at that point
Elon expects Optimus to be much more valuable than the car business long term
Charging (Rebecca Tinucci)
A great charging experience is the lynchpin to EV adoption
Giga Berlin recently implemented 5G to make one process more efficient
4 factories is not enough to reach 20M however with the internal Giga Factory team they’ll be able to scale this out
Made a lot of progress with manufacturing including that of cells (full automation)
5x reduction in factory footprint from 2170 cells to 4680 cells
10x smaller factory volumetrically
50GWh/year Corpus Christi Lithium Refiner will start commissioning end of 2023 (ground breaking to commissioning in 10 months)
Designed to ingest Lithium spodumene
On top of this Tesla is working on their 60GWh Cathode factory which will be commissioning in Q2 2023
Energy (Mike Snyder, Drew Baglino)
Have built a software & hardware platform that can adapt to be used anywhere in the world
Tesla is on their 6th generation of their industrial energy products
16GWh of energy storage products deployed to date
Lathrop factory continuing to ramp & scale
Megapack XL is the most energy-dense storage solution on the market at 300 MWh / acre
2x more dense as gas peaker plant
Power electronics are critical to the entire mission
Virtual machine mode acts as a shock absorber to grid events
One grid operator will not convert to 100% renewables unless they get this particular feature working
Autobidder is an autonomous energy trading platform that allows folks to buy energy low and sell it high
Makes 100s of thousands of decisions per second
Has proven to be a market leader
First Megafactory (Lathrop) was converted from JC Penny’s distribution center to a factory in less than one year
Increased installation speed by 4x and reduced total labor by 3x
In Australia they were paying consumers to bring their power generation capability to the grid
Coming in July in Texas Tesla is bringing unlimited home charging
Retail electricity plan
Reduces TCO of vehicles
Incentives people to charge at home at night
Demand for energy products is there and thus additional manufacturing capacity is needed
Impact (Laurie Shelby, Brandon Ehrhart)
129,000 total employees, almost half of that is involved with vehicle manufacturing
In 2022 Tesla got 3M applicants for engineering positions
Sustainability is key to Tesla and as a result their customers avoided the creation of a ton of emissions (equivalent of 1.7M ICE vehicles for 1 year)
Model 3 even in worst case scenario uses less energy than the average ICE
More coming in impact report
Financials (Zach Kirkhorn)
Since introduction of Model 3 production, they have reduced costs by 30%
Cost reduction will continue to be paired with improvements
Cost reductions come from anywhere
Model 3 has a lower TCO than Corolla
60-70% lower selling, general, and administrative expenses per vehicle then competitors
As a result they think more about operating margin vs gross margin
Tesla is now aligning to Tesla Operating System which will streamline efficiencies across the board
Q&A
Giga Factory in Mexico officially announced
Ground breaking will be coming soon in Monterrey
Existing factories will continue to expand & scale further
New Unboxed Vehicle manufacturing process will be brought to new products first then put into existing products as time goes on
Bi-directional charging coming to all Tesla vehicles within next 2 years
Trying to keep unique vehicle models to no more than 10
Tom Zhu not concerned about Tesla’s position in China as they continue to cut costs while providing valuable products
Demand is definitely a function of affordability not desire when it comes to Tesla
Continues to target excess battery production so they can keep vehicle factories running at full bore while ramping energy storage production as needed
Over 95% of supply chain in China is localized
For FSD, Tesla plans to auto label most of the collected data
Since they want to build a scalable solution, they are going to continue to shy away from HD maps even though they could build something similar with the data & tech they’ve built
Dry electrode
Every passing week leads more progress in yields, quality, etc.
Thanks to overcapacity, they have the ability to experiment as they ramp
Tesla is operating more than one anode lines and its an internal competition on which process will create the highest yields
Acquired Maxwell mainly for the dry electrode process
Plan to scale to volume production by end of year
Next Generation Platform
Tesla will host a dedicated event for this product
