Good afternoon, everyone, and welcome to Tesla's fourth quarter 2025 Q&A webcast. My name is Travis Axelrod, Head of Investor Relations, and I'm joined today by Elon Musk, Vaibhav Taneja, and a number of other executives. Our Q4 results were announced at about 3 P.M. Central Time in the update deck we published at the same link as this webcast. During this call, we will discuss our business outlook and make forward-looking statements. These comments are based on our predictions and expectations as of today. Actual events or results could differ materially due to a number of risks and uncertainties, including those mentioned in our most recent filings with the SEC. During the question and answer portion of today's call, please limit yourself to one question and one follow-up. Please use the Raise Hand button to join the question queue. Before we jump into Q&A, Elon has some opening remarks. Elon? Thanks, Travis. So, we've updated the Tesla mission to amazing abundance, and this is intended to send a message of optimism about the future. I think we're most likely headed to an exciting, amazing era of abundance. And I think with the advent or with the continued growth of AI and robotics, I think we actually are headed to a future of universal high income. Not universal basic income, but universal high income. I mean, there's gonna be a lot of change along the way, but that is what I see as the most likely outcome. So I think that it makes sense to update Tesla's mission to reflect that goal. And obviously, along that way, we're going to keep improving safety, driving down the cost of goods, and getting people access to anything they need, without compromise. And still making sure that the environment is great, nature is great, and people can have whatever they want, which seems like probably the best future. So, I'm open to other ideas, but that sounds like it sounds like the best future you could possibly imagine. I guess it would be that everyone can have whatever they want, including amazing medical care, and but we still keep, you know, the beauty of nature and Earth. I think that's probably the best outcome. And we're seeing obviously the first steps along that way this year for Tesla, first major steps, as we increase vehicle autonomy and begin to produce Optimus robots at scale. We're making very, very big investments, so this is gonna be a very big CapEx year, as Vaibhav will get into. That is deliberate, because we're making big investments for an epic future. So I think all these investments make a lot of sense. We'll continue to make sure that when we do spend capital, it is spent very efficiently. But it's a lot of things. You know, major investments in batteries and the entire supply chain for batteries. So, we're also gonna be significant manufacturers of solar cells, and we're making massive investments in AI chips. So, but I think these all make a ton of strategic sense. And then I guess I have, like, one... It's not like it's not exactly bad news, but it's a... it's time to basically bring the Model S and X programs to an end with an honorable discharge. Because we're really moving into a future that is based on autonomy and so if you're interested in buying a Model S and X, now would be the time to order it, because we expect to wind down S and X production in next quarter and basically stop production of Model S and X next quarter. We'll obviously continue to support the Model S and X programs for as long as people have the vehicles, but we're gonna take the Model S and X production space in our Fremont factory and convert that into an Optimus factory, which will... with the long-term goal of having 1 million units a year of Optimus robots in the current S/X space in Fremont. So that is slightly sad, but it is time to bring the S/X programs to an end and shift really, it's part of our overall shift to an autonomous future. As my profile picture on X said for a few months there, "The future is autonomous." And so let's say with respect to Full Self-Driving and Robotaxi, people are obviously following with very close attention the progress of FSD, and you can experience it for yourself. If you've got a Tesla, you can notice, really, with every software update, the car gets better and better at autonomy. And we're, you know, we're able to do our first rides with no safety monitor in the car in Austin. These were paid rides, so these were just sort of randomly selected paid rides with no safety monitor. I think maybe as of maybe yesterday or so, we actually don't even have a chase car or anything like that. So these are just cars with no people in them, and no one's following the car in Austin. So we're obviously being very cautious about this 'cause we wanna have no injuries or serious accidents along the way. So I think it makes sense to be very cautious, but you'll see the amount of autonomy increase dramatically, I think, every month, essentially. So and then there will also be an opportunity, something we've talked about for a long time, for existing owners of Teslas to add or subtract their cars to the fleet. Kinda like how Airbnb works, where you can add or subtract your house to the Airbnb inventory. And I think probably the value of the Tesla, the sort of partial people adding or subtracting their cars to Tesla autonomous fleet is probably a little underweighted by a lot of people 'cause we've got millions of cars with AI4 that can do this. So, it's that, it might potentially provide an opportunity for a lot of customers to earn more by lending their car to the fleet than their lease cost to Tesla. Yeah, which is kind of... It's kinda like you get, in that scenario, you basically get paid to own a Tesla. It's quite a good scenario. And we expect to have fully autonomous vehicles in, you know, probably, I don't know, somewhere between a quarter and half of the United States by the end of the year, pending regulatory approval. You know, a big factor would be if there's some kind of federal preemption for autonomous vehicles. In the absence of that, you kinda have to go on a city-by-city or state-by-state basis. But nonetheless, we even if it is city by city, state by state, we expect to be in, you know, I don't know, dozens of cities, dozens of major cities by the end of the year. With respect to energy, the Tesla energy team has done incredible work, and the growth rate on that work is continuing to be very strong. We're building more manufacturing capacity and expect that energy will have very high growth for really as far into the future as we can imagine. The solar opportunity is underestimated. We think the best way to add significant capability to the grid is, or energy to the grid, let's say it's powering AI data centers, is solar and batteries on Earth and solar in space. So that's why we're gonna work towards getting 100 gigawatts a year of solar cell production, integrating across the entire supply chain, from raw materials all the way to finished solar panels. Maybe a bit more about Optimus. We'll probably unveil Optimus 3 in a few months. And I think it's gonna be quite surprising to people. It's an incredibly capable robot. And as I mentioned, we are replacing the S/X line in Fremont with a 1 million unit per year line of Optimus. Now, because it is a completely new supply chain, it's just, it's a... There's really nothing from the existing supply chain that exists in Optimus. Everything is designed from physics first principles. So that means, the normal S-curve of manufacturing ramp will be longer for Optimus than it is for products that have at least some portion of an existing supply chain. Like, when everything's new, the production rate will be proportionate to the least lucky, least confident part of the entire supply chain. And if there's 10,000 things that need to go right, it's, you know, it only takes one to be slow to lag that. But, so it will be sort of a stretched out S-curve, but I'm confident that we'll get to 1 million units a year of, in Fremont, of, Optimus 3. And this Optimus really, really will be a general purpose robot that can learn by observing human behavior. So you can, like, demonstrate a task or literally verbally describe a task or show it a task, even show it a video, and it will be able to do that task. So it's a... It's gonna be a very capable robot. I think long-term, Optimus will have a very significant impact on the U.S. GDP. Like, it will actually move the needle on U.S. GDP significantly. So, in conclusion,... You know, there's still obviously many who doubt our ambitions for creating amazing abundance, but we're confident it can be done, and that we're making the right moves technologically to ensure that it does. And Tesla's obviously not, never, never been a company to shy away from solving some of the hardest problems. You know, that it's, I think that's kind of how you build value in a company is you solve hard problems. It's like I don't know how you create value by solving easy problems. So there's a lot of hard problems that the Tesla team is gonna solve, but it's an incredibly talented, hardworking team. And I'd like to thank actually everyone at Tesla for their incredible hard work. It's an honor to work with such a talented group. Thank you to everyone who is supporting this mission. The future is more exciting than you can imagine. Fantastic. Thank you so much, Elon. Next, we have some remarks from Vaibhav. Go ahead. Thanks, Travis. So Q4 2025 was an interesting quarter in a couple of respects. On the autos front, while in Q3, we saw a surge in U.S. demand before the higher consumer credit cliff, pulling in some demand from Q4. In other parts of the world, we saw increase in demand, leading to record deliveries in smaller countries like Malaysia, Norway, Poland, Saudi Arabia, and Taiwan, while continued strength in the rest of APAC and EMEA. We therefore ended 2025 with a bigger backlog than in recent years. Note that none of these countries have the latest version of FSD Supervised available yet. On the storage front, we had yet another record in terms of deployments. I would like to thank our customers and Tesla in continuing this momentum. On the automotive margins front, automotive margins, excluding credits, improved sequentially from 15.4% to 17.9%. The automotive gross profit was flat sequentially, despite 16% lower deliveries, primarily due to regional mix, as we had proportionately more deliveries in APAC and EMEA. As we look to 2026, with the progress that has been made with autonomy, our focus is on ramping production at all our factories. Our biggest constraint globally continues to be on the battery pack front. While our teams have been creative in trying to resolve the situation by now putting 4680 cells in non-structural packs, we continue to iterate improving things from here on. FSD adoption continued to improve in the quarter, reaching nearly 1.1 million paid customers globally. Of these, nearly 70% were upfront purchases. It is important to note that beginning this quarter, we are transitioning fully to a subscription-based model for FSD. Therefore, net additions to this figure will primarily be via subscription model and in the short term, will impact automotive margins. On the energy front, we achieved yet another record in terms of gross profit for the quarter and ended the year with nearly $12.8 billion in revenue at 26.6% year-over-year growth. This was the result of high deployments in all regions and continued strength and demand for both Megapack and Powerwall. As we look at 2026, our backlog remains strong, well-diversified globally, and we expect increasing deployments with the launch of Megapack 3 and Megablock. However, we expect margin compression from the increased low-cost competition, impacts to market from policy uncertainty, and the cost of tariffs. Services and Others margin declined from 10.5% to 8.8%, primarily from higher employee-related costs for service centers as we start preparing for the ramp in activity from the growth in the fleet size. We did see a momentum in margin, we did see an improvement in margin from our Supercharging business, which is included within services and other. Additionally, note that our Robotaxi business-related costs, while not material, are also included within this. Given that this, we're still in the early phase of our fleet deployment and are still doing a lot of validation testing, the revenue and cost per mile metrics are not meaningful to discuss at the moment. Then on total gross margin front, you know, we ended the quarter with over 20.1%, something which we haven't achieved for over the last two years. This improvement came despite the impact of lower fixed cost absorption and the impact of tariffs, which were in excess of $500 million in Q4. Operating expenses increased sequentially, primarily from increased stock-based compensation for employees, and as we started recording charges on for one operational milestone under our 2025 CEO Performance Award, that was deemed to be probable over the award term. Additionally, our spend on AI-related initiatives and new products like Cybercab, Semi, Optimus, and Megapack, etc., continues to be on elevated levels, and we expect this trend to continue for the full year 2026. Net income was negatively impacted from mark-to-market charges on a Bitcoin holding, which depreciated 23% as compared to the last quarter, and, the impact of unfavorable impact of FX, primarily from our large intercompany borrowings. On the free cash flow front, we ended up at $1.4 billion. You know, we did end up CapEx being slightly below our previous guidance of $9 billion. But like, as Elon already mentioned, this year is going to be a huge investment year from a CapEx perspective. And at the moment, we are expecting that CapEx will be in excess of $20 billion. You know, we'll be paying for 6 factories, namely the refinery, LFP factory, Cybercab, Semi, a new Mega factory, the Optimus factory. On top of it, we'll also be spending money for building our AI compute infrastructure, and we'll continue investing in our existing factories to build more capacity, and then, you know, also the related infrastructure along with it. And we'll also further expand our fleet of Robotaxi and Optimus. While this may seem a lot, we believe this is the right strategy to position the company for the next era, and we'll make such investments, as Elon mentioned, in a very capital-efficient manner. Note that this does not include potential investments in solar cell manufacturing or our Terafab, as we're still in early phase, and we plan to provide an update in future quarters. We're starting not the next chapter, but a new book on the progression of this company. 2026 year would be when all of this began. While at times it feels daunting, it is going to be the most exciting change in Tesla's history, and we could not have even dreamed of embarking on this journey without the support of our customers and our investors. Thanks for again showing the confidence in us, and let's get ready for a future of amazing abundance. Thanks. Great. Thank you very much, Vaibhav. Now we're going to head over to investor questions. As always, we will start with questions from Say.com. The first question is, "Today, today, there are approximately 90 million cars sold globally each year. Does Tesla have a view, based on its Robotaxi ambition, what this number will be in 5 or 10 years, and how does this impact Tesla's EV strategy to have more models? Yeah. Thanks, Travis. As Elon said, the future is autonomous, and obviously, autonomy and Cybercab are going to change the global market size and mix quite significantly. I think that's quite obvious. You know, general transportation is gonna be better served by autonomy, as it will be safer and cheaper, and over 90% of vehicle miles traveled are with two or less passengers now, which is why we designed Cybercab that way. In this new autonomous market, we at Tesla have the advantage of efficiency, cost, and manufacturing at scale that really no one else has, and we've built that over the last decades, and we believe that that segment that we are creating will grow millions year-over-year. Yeah. Just to add to what Lars said there, it's worth the point that Lars made, which is that 90% of miles driven are with one or two passengers, or one or two occupants, essentially, is a very important one. Because that implies that the Cybercab, which is a dedicated, you know, two-seater or dedicated Robotaxi. It's a little confusing with the terms Robotaxi and Cybercab. Sorry about the confusion, but... And in fact, in some states, we're not allowed to use the word cab or taxi, so it's gonna get even more strange. It's gonna be like Cyber vehicle or something, Cybercar. But the Cybercab, which is a specific vehicle model that we're making, does not have a steering wheel or pedals. So this is clearly, you know, there's no fallback mechanism here. It's like this car either drives itself or it does not drive. And we expect to start production in April. As always, it's an S-curve of... The production rate is an S-curve, so starts off very slowly and then grows exponentially, then you hit the linear, and then ultimately, you know, it asymptotes at whatever your target volume is. So, but we would expect over time to make a far more Cybercabs than all of our other vehicles combined, given that 90% of distance driven or distance being- Traveled. -distance traveled, exactly, no longer driving, is one or two people. I think it's like 80% is just one. So it would mean that long-term, Cybercab, we would make several times more Cybercabs per year than all of our other vehicles combined. Great. Thank you so much. The next question, a bit related, "Are there still plans to launch new models to address different price segments and vehicle types which could materially expand the TAM for Tesla? Yeah. To further on what we were just talking about, we've launched our least expensive models ever over the last few months and are continuing to expand that, those models globally. And over the last decade, we have continually brought down the cost of our vehicles without sacrificing range, performance, or premiumness, and we'll continue to do that, as Vaibhav said, investing in our factories, but these are all trade-offs of where we spend our time or money. And to Elon's point, just now, with Cybercab coming, we are aiming to bring that Tesla premium ride experience to our largest market yet. That could be 5 or 10 times our current levels of production. This new autonomous market, you have to start thinking about us as moving to providing transportation as a service more than the total- Yes ... addressable market, for the purchased vehicles alone. Of course, we do have plans to have Robotaxis in various shapes and sizes, but obviously, Cybercab will be the grand majority of that volume. Yeah, the vast majority of miles traveled will be autonomous in the future. You know, I would say probably less than – I'm just guessing, but probably less than 5% of miles driven will be where somebody's actually driving the car themselves in the future. Maybe as low as 1%. Great. The next question is, historically, Tesla has spoken about gross margin per model. Are there standalone gross margin targets for the current models, excluding the benefits for FSD sales? You know, we've talked about this with the previous two questions, but transportation, as we know, is changing, and I think we cannot keep applying the same framework from a car sales model to the future, what we are trying to do. So it has to be looked at it more holistically. You know, autonomy software will be the driver for growth from now on. And as we aim to maximize the global fleet, we've been laser-focused on COGS from our side to make sure, because that is something which we manage. So we will keep focusing on that, but I think we need to look at it from a different dimension. Yeah, like, this Cybercab, that is, the whole design of Cybercab was, it was to optimize the, the fully considered cost per mile, of autonomous driving. And you, you, you're-- it's a different design problem than if you're trying to design, cars for people who, who will be driving, versus being driven. And, and, and so, so Cybercab is, like, like I said, super optimized for, minimum cost per mile and, and also for a much higher duty cycle. So it, we, we would expect, Cybercab to be used, you know, probably 50 or 60 hours a week, instead of the 10 or 11 hours a week that, a, a driven vehicle is used. So, you know, typically, people will might drive their car for an hour and a half a day on average, so it's like 10 hours per week out of 168. But I think an autonomous vehicle is likely to be used probably five times as often, which means that you need to design the vehicle for much more wear and tear per unit of time and much more resilience. It's more like a commercial truck that's in continuous operation or close to continuous operation. That's how you design an autonomous vehicle. So we will have larger vehicles than the Cybercab in the future that are designed for full autonomy. And we've actually shown pictures of this, and in fact, have shown prototypes, so this is not exactly a secret. In fact, we've given people rides in them. So, you know, we're not keeping this, hiding this light under a bushel here. You know, it's like, we're literally saying what we're gonna do and have said what we're gonna do for a while. So, you know, I really think long term, we would really, the only vehicles that we'll make will be autonomous vehicles, with the exception of the next generation Roadster, which we're hoping to debut in April. Hopefully. It's gonna be something out of this world. Fantastic. The next question we'd unfortunately have to skip because it's not related to Tesla, and we would like to remind folks who use the Say Platform to please focus these questions on Tesla. So, with that in mind, we're gonna move on to the next question, which is: What is the current bottleneck to increase robotaxi deployment and personal use unsupervised FSD? The safety and performance of the most recent models, is it the safety and performance of the most recent models, or is it people to monitor the robotaxis in-car or remotely, or is there some other blocker? I don't know, Ashok, if you wanted to kick off on this one. Yeah. We have scaled the robotaxi service that's available to customers over the last year in order to just learn the scaling problems without having to like wait for the unsupervised. Basically, I had two, two goals. One is, like, learn as much as possible from the fleet with the safety monitors, and secondly, be laser focused with the engineering team to solve the unsupervised FSD problem. I think we did both. Like, by the end of last year, we, you know, we had a long tail of issues that we were able to churn through, and then, in the last couple of weeks, we had started our unsupervised robotaxi service to public customers in Austin. I think some customers took rides last week, and also the service continues today without any rear car or something like that. Separately, we did scale the fleet size in the Bay Area and in Austin, and through that, we learned, you know, issues with charging and other issues that we would have seen once we sort of like scaled the unsupervised fleet. So both are happening in parallel. A variant of the software that's used for the robotaxi service was shipped to customers with V14, and customers saw a huge jump in performance, like a lot of, you know, happy feedback from customers. So, and since then, we have improved the software significantly as well. And customers will continue to see with their own software releases that the software is so good that, you know, they're like screaming to remove the tire monitoring software because they're bored inside the car too much. Adding to that a little bit with what Ashok said about learning about our charging and service needs. You know, we're using our vast network of charging and service centers that really only Tesla has in this space to jumpstart our infrastructure build-out needs to get ahead of robotaxi and autonomous vehicle demand. And we expect that because of this network, we are the only company capable of scaling at the rate that is needed for the tsunami of autonomy that is coming. Yeah. Great. Moving on to the next question. After the unveil of the Cybertruck, Elon stated that if it didn't sell well, Tesla would build a more conventional-looking pickup. How practical would it be to create this new design on the Cybertruck architecture, and could it be conveniently built on the existing production lines? Actually, in its segment, Cybertruck continues to be a leader and is selling more than any other electric truck out there, while our competition continues to pull back. But to the question itself, from a line standpoint, we always design our lines to be super flexible. We built 3 and Y on the same line. We built S and X on the same line, still, showing that we can do that. The Cybertruck line was designed in the same way and is one of our most fully ready-for-autonomy platforms. Yeah. But yeah, we will transition the Cybertruck line to just a fully autonomous line. And there's obviously a market there for cargo delivery, like you say, like localized cargo delivery within a city, within a few hundred miles, something like that. There's a pretty... There's a lot of cargo that needs to move locally within a city and an autonomous Cybertruck could be very useful for that. Great. Moving on to the next question. Regarding Optimus, could you share the current number of units deployed in Tesla factories and actively performing production tasks? What specific roles or operations are they handling, and how has their integration impacted factory efficiency or output? Yeah, I mean, we're still very much at the early stages of Optimus. It's an R&D. It's still in the R&D phase. So, we have had Optimus do some basic tasks in the factory, but as we iterate on new versions of Optimus, we deprecate the old versions. And so it's not. I wouldn't say it's like. It's not in usage in our factories in a material way. It's more so that the robot can learn. We wouldn't expect to have, you know, any kind of significant Optimus production volume until probably the end of this year. Great, and- Adding to it, like, Optimus Gen 3 is an awesome robot that- It is awesome. Yeah, it's an awesome robot that minimizes any differences. It's basically, it looks like a human. People could be easily confused that it's a human. And this helps our strategy for the AI, too, because you can learn from how humans do these tasks, and it's very easy to teach the robot to do in the same way as opposed to previous robots. Yeah, I mean, I guess one thing I should say, like, is, you know, there's a lot of news of like, you know, various companies announcing layoffs and whatnot, but, you know, at our Tesla factory in Fremont, we actually expect to increase headcount over time, and to significantly increase output from our factories. So yeah, we don't have any layoff plans. We expect to actually increase headcount. Great. The next question, similar to the other, autonomy questions, but slightly different. When is FSD going to be 100% unsupervised? Well, it is 100% unsupervised. FSD is 100% unsupervised. I mean, we obviously have cars operating with no one in them and no safety monitor and no follow car or anything like that in Austin right now. For customers, you know, we're being very, just very cautious with the rollout. I mean, with each successive version, as we prove it out and we make sure that there are no sort of unique issues in, you know, in particular cities, 'cause, like, sometimes you get, like, some very, you know, difficult intersection, and it'll be an intersection where a lot of humans have accidents, by the way. There's, like, some pretty nutty intersections where there are a lot of humans make mistakes and have accidents in various cities. So we want to make sure that, you know, FSD can handle those unusual intersections. Like if you take L.A., for example, where Wilshire and Santa Monica combine is like there's about, I don't know, 20 traffic lights, and people are constantly having accidents there. So, you want to make sure that FSD can handle unique things in a particular city, so... And we're also just being paranoid about safety. But with each successful release of FSD, we will reduce the amount of driver monitoring that's needed, proportionate to the safety of the FSD build. Great. As it relates to Robotaxi, what has surprised you about the rollout so far? We've talked about what's constrained the fleet expansion to date, but it appears there are 200 vehicles based on public tracking. Is that something that we can confirm? I wouldn't say there's anything that, like, really surprised us, because, because we are a large fleet, we had all the metrics, so there was no sort of, sort of a surprise. It was just continued work to grind down on the long tail of issues, and that's what enabled us to launch the unsupervised service in Austin. Yeah, and I mean, in terms of Robotaxi vehicles carrying paid customers, I think we're well over 500 at this point between the Bay Area and Austin. Yeah, there's yeah, varying amounts of like vehicles, depending on the load, but yeah, you can have like more vehicles during like peak times and then like fewer vehicles in the off hours. Yeah. This will probably, you know, double every month type of thing. It's gonna, it's on an exponential curve. I mean, one other thing, people forget that, you know, we've been deliberate on all this, in the sense that we have the supporting infrastructure already been in place, whether it's service centers, charging. Yes, we'll have to augment as the fleet grows, depending upon the density of where the demand is and whatnot, but it's not something like we just stumbled upon it, and we're starting to... We've been at it for years. Yes, not every city is designed the same way. Same thing, our infrastructure is also not the same in every city, but you have to give us credit that it's been a journey. And like Lars said, if there's some company which can do it, we've already been at it, so we should be able to deliver much better. Great. The next question is about chase cars, which we already covered. So moving on to the last question, Elon, you've been spending significant personal time on Tesla's chip design. Yeah. What was the forcing function behind this increased involvement? And do you think external chip sales will represent a significant portion of Tesla's valuation by the end of the decade? Well, I mean, I tend to spend time on whatever the most critical issue is for the company, and completing the AI5 chip design and having it be a great chip is arguably the number one most critical thing to get done, which is why I'm spending more time on that than currently anything else at Tesla. Spend pretty much every Saturday on this and a chunk of every Tuesday. So it's like a... You know, if I'm spending my Saturdays on something, it's gonna be something pretty important. I do think AI5 will be a very good chip, and I'm quite confident about the design at this point. And then AI6, which will follow that, it'll be aspirationally would follow that in under a year, will, will be yet another big leap beyond AI5. So I feel pretty good about our chip strategy right now. But in terms of selling it outside of Tesla, we first need to make sure we have enough chips for all of our vehicle production and all of our Optimus production. And then we will actually use the AI5 chips in our data centers. We already use the AI4 chips in our data centers. So when we do training, it's a combination of the AI4 chips and NVIDIA hardware, primarily that we do training with. So, but you say by the end of the decade, I mean, it's like things are changing so fast that it's hard to imagine, like, what happens at the end of the decade. I mean, we might... I mean, when I look ahead at, say, what's the limiting factor for Tesla growth, if you go, say, three or four years out, I think it actually is chip production. Is there enough AI, okay, enough AI logic and enough AI, and enough memory, enough RAM for our volume? And right now, I see that as being the thing that probably limits our growth in three or four years, which probably would imply that we're not selling chips outside of Tesla, because we need them. And in fact, I think it's gonna make sense, and this is definitely gonna be a sort of a controversial thing, but I think Tesla needs to build a Terafab. You know, I mentioned this at the shareholder meeting, but even when we look at the best case output of all of our key suppliers, and I'd say even they're beyond suppliers, they're like strategic partners, like Samsung, TSMC, and Micron, and we say, like: "What's the most you could possibly make?" Then it's not enough. So I think in order to remove the constraint, the probable constraint in three or four years, we are gonna have to build a Tesla Terafab, a very big fab that includes logic, memory, and packaging, domestically. And that's actually also gonna be very important to ensure that we are protected against any geopolitical risks. I think people may be underweighting some of the geopolitical risks that are gonna be a major factor in a few years. So, now, you know, a lot of people are like, "That's crazy. Fabs are really hard." I'm like: "Yes, I know fabs are really hard. I don't think they're easy." But, We do hard things. We do a lot of hard things. You know, we didn't used to have car factories, that we didn't use to have battery cell factories or lithium refineries or, you know, Megapack factories or, you know, all these other things. We figured it out. So I think we-- if we don't do the Tesla Terafab, we're gonna be limited by supplier output of chips. And I think maybe memory is an even bigger limiter than AI logic. So you know, for example, we have chip supply deals with TSMC in Arizona and Samsung in Texas, but currently there are no advanced memory fabs at scale in the United States. There are zero, literally zero. Hopefully, you know, Micron will have something going in a few years, because they're all headquartered in Idaho, you know, where they make a lot of potato chips, but they need to make computer chips, too. So, anyway, we're working with our strategic partners on the chip front, memory and logic, but I think we've got to also try our hand at building a large-scale fab that integrates logic, memory, and packaging. And if we don't do that, we're just gonna be fundamentally limited by supply chain, especially if there's some geo- in a worst-case geopolitical situation, it would be quite a severe situation. So I think -- quite frankly, it'd be crazy not to try the Terafab. Yeah. Great. We'll have a bigger announcement on this in the future. Awesome. With that, we're gonna move on to analyst questions. The first analyst is Emmanuel from Wolfe Research. Emmanuel, please feel free to unmute yourself. Great. Thank you so much. It's Emmanuel Rosner from Wolfe Research. My first question is on the CapEx. You signal a pretty large increase to over $20 billion for this year. Was hoping to better understand where the investments are going. Any way of two-dimension for us, which of the product line or technologies account for the bulk of the increase? And also, do you view this as, like, one-time in nature, 2026, or I guess, how much of this is an ongoing level of high spending for a number of years? And then just finally, still on that, with that level of spending, you're going to be burning cash. How, what should we think about your cash balance or any other way to finance this? Yeah. So, yeah, Emmanuel, I tried to put this in my opening remarks, too, but I'll try and go a little bit deeper. There's about six factories which we are starting production in this year, so there's a lot of cash CapEx, which is going into that. Then, as we are trying to scale Optimus, we need a lot more compute, so we're putting more money towards compute as well. For training. For training. Yeah. Then we're also gonna be spending money to expand the capacity at, you know, at existing factories. On top of it, you know, just keep in mind that we're not-- none of these numbers, which I shared of $20 billion factor in anything to do with the solar fab or the semiconductor chip fab. Those would be, as Elon mentioned, would come later on. And you think your second part of your question was, is this one-off or would we expect more? I think we're getting into this investment phase because we have big aspirations. And when you look at it, some of these aspirations are, I call them as infrastructure play, especially if you have to do a chip fab and we have to do a solar cell manufacturing fab, those are infrastructure plays. And that funding takes a little bit longer, and you would be in an investment cycle for a little bit longer. Initially, third part of your question was: How are we gonna fund it? Initially, obviously, we have over $44 billion of cash and investments on the books, so we'll use our internal resources, but there are ways where we can fund it, especially when we look at the robotaxi fleet, because, you know, anytime you have a consistent stream of cash flow, you can go and get money from the banks. And we have had conversations with banks about it, and that is something how we're gonna do it. And then on the infrastructure play side, yeah, like I said, we don't have a number yet, but given that it's an infrastructure play, it's a longer tail, we will have to look at a little bit more in terms of how we fund it, whether it's through more debt or other means. Great. Our next question comes from, Andrew, from Morgan Stanley. Andrew, please feel free to unmute yourself. Great. Thanks so much for taking the question. I just wanna start on the xAI investment that you guys announced today. You know, you talked about there being some collaboration, you know, between the companies. So I'm just hoping to get more information or if you're hoping that you could shed more light on what that looks like and maybe how the work xAI is doing can be leveraged at Tesla and vice versa? Yeah, I mean, if you looked at the disclosure, which we also put in there, we do talk about this is literally a furtherance of our Master Plan Four. And even today, if you look at Tesla vehicles, we are using Grok in there. And as we look at things, whether we can do it ourselves, yes, there are a lot of things which we can do ourselves, but if there are things which xAI can help accelerate our progress, then why should we not do that? And that is the reason why we've gone ahead with such an investment, because this is part of the strategic initiative. 'Cause as it is, if you remember, I talked about how many things which we are doing ourselves. If there are ways and means we can find efficient ways for others to help us, and xAI literally fits into that mold, so that's why we went ahead with it. We just had, like, a lot of investors ask us to do this. There was, like, a lot of, you know, investor Tesla shareholders said, like, we should invest in xAI. So that's like, we're just doing what shareholders, like, asked us to do, pretty much. Grok will be, you know, I think, very helpful in, say, maximizing the efficiency of the management of a large autonomous fleet. So, I mean, if you've got a autonomous fleet that's, you know, in the future, 10 million vehicles or tens of millions of vehicles, then optimizing the efficient use of that fleet, Grok will be, I think, way, way better than any heuristic solution, or sort of manually managed solution. And if you say you're managing, say, a large team of Optimus robots to build a factory or build a refinery, you know, and, say, hypothetic, like a... This is a hypothetical example, a rare earth ore refinery, which we do desperately need in our, in, America. Then, you'd, you say, "Well, who like, what's gonna organize, the Optimus robots to build that ore refinery?" That would. You know, you need, kind of need a, an orchestra conductor. And so then Grok would be, kind of the orchestra conductor for the Optimus robots to build the, hypothetically, an, a rare. It might, it might not be hypothetical in the future. I'm just saying it's not, not currently in our plans. But, you know, we do need a lot more ore refining capacity in the U.S. So then, what, what's gonna manage, let's say, 1,000 Optimus robots, to do- You're on mute right now, so I'm not sure if you're trying to ask a follow-up question. We're gonna move on to the next question, which is coming from Dan Levy at Barclays. Great. Great, thank you. Elon, you talked about some of the constraints on memory. Given the very tight supply, are there any near-term constraints on procuring memory? And if there are, to what extent could you look at modifying the functionality in the vehicles, similar to what you did in 2021 when we saw shortages on MCUs, and maybe how are you thinking about bridging in the next few years? Well, the Tesla AI is very compute efficient and very memory efficient. You know, so I think one of the metrics one should consider for any given AI model is the intelligence per gigabyte. Especially when you're constrained on RAM, having an AI that has very high intelligence density per gigabyte. So you can say, like, what—like, for a given number of gigabytes, how much functionality can you get out of it? I actually think Tesla is ahead of the rest of the world in intelligence density of AI by an order of magnitude or more. Like, this is gonna sound like a pretty bold statement, but I kind of know what the, you know, what the intelligence efficiency of the, of the big models are like Grok and, like, honestly, and you know, a bunch of the other models. And Tesla's AI is like, in terms of its memory efficiency, I think more than an order of magnitude better. So that puts us in a pretty good position, actually, for scaling. And we do think that there is. We do have a solution for logic and memory, for, let's say, the next roughly three years. But if you start going beyond three years, and we look at the scaling plans, and how many fabs are getting built, and especially if you factor in geopolitical uncertainty, you know, there's always, there's always risk that, maybe the, those chips don't arrive, that people were expecting to arrive. So that's, that's why I think we, we need to have more fab capacity in the U.S., just in case, you know, chips don't stop arriving for any reason. But, you know, this, this is, this is really existential for, for Tesla, because, if... You know, Optimus is completely useless without an AI chip. It's not like- you know, at least the cars, we can put steering wheels and pedals in, or retrofit them if need be. But, but Optimus is just a mannequin without, you know, it's like the Tin Man or whatever from The Wizard of Oz, but, but even worse, at least the Tin Man could walk. Optimus won't even be able to - it would just sit there without an AI chip. So we've got a good solution for a significant scale through, you know, for the next roughly three years. Beyond that, we will be supplier limited, and so we've got to figure out some game plan to not be supplier limited. Great. Our next question is gonna come from George at Canaccord. George, please feel free to unmute yourself. Hi, everyone. Thank you for taking my question. So, yeah, there's been a surge of startups, particularly from China, entering the humanoid market, and just wondering what the long-term competitive advantages that keep Tesla ahead are, and how, based on what you've seen, will Optimus fundamentally differ from these competitors? Thank you. Well, I do think that by far the biggest competition for humanoid robots will be from China. China is incredibly good at scaling manufacturing. Actually quite good at AI, as you can see from, you know, the open source or not the open source, but the sort of—I guess some of them are open, actually. But basically, the models that China is distributing for free are actually quite good, and they keep getting better. So China is very good at AI, very good at manufacturing, and will definitely be the toughest competition for Tesla. To the best of our knowledge, we don't see any significant competitors outside of China. But China will definitely be tough competition. There's no two ways about it. So, I always think, like, people sort of outside of China kind of underestimate China. China's an ass kicker next level. So, you know, I guess, you know, we're gonna build. We think Optimus will be much more capable than any robot that we are aware of under development in China. So we think we'll be ahead in terms of the real-world intelligence, the electromechanical dexterity, especially the hand design, which is by far the hardest thing in the robot. And in fact, I'd say there's really three hard things about humanoid robots. Building an incredible hand that has the same degrees of freedom and dexterity as a human hand is an incredibly difficult engineering challenge. Then there's the real-world AI and scaling production. Those are the three hardest problems by far for humanoid robots. I think Tesla is the only company that actually has all three of those components. So yeah. Great. And our last question is gonna come from Colin, at Oppenheimer. Colin, please feel free to unmute yourself. Thanks so much. Guys, you know, you talked a lot about the CapEx spend, but, you know, this is an incredibly ambitious technology development program that you're talking about. Can you talk a little bit about the R&D spend and how you're thinking about the synergies of the different components, you know, particularly on the hardware side? You know, if you think about, you know, batteries into chips into memory, and the efficiency of the system, and what sort of advantages you think you'll end up getting out of, you know, some of these purpose-built devices that you'll end up integrating into multiple end markets? Well, really what we're trying to do is make sure that we can scale to very high volume with autonomous vehicles, with humanoid robots, and that we address geopolitical risk. Which I think, you know, there's so many companies out there that are asleep at the switch with regard to geopolitical risk. They're like... or they just have their head in the sand and hope nothing bad will happen. I'm way more paranoid than that. I always think of Andy Grove's famous statement, "Only the paranoid survive." You know, why did he come up with that statement at Intel? Hmm, let's think. So I think there's a lot of wisdom in that statement. So we're gonna be paranoid and make sure that we can continue to build batteries and robots and AI chips no matter what happens. And companies that don't do that, a bunch of them will cease to exist. Yeah, I mean, remember, all this comes out of necessity. It's not that we want to do it- Yeah it's just we have, we have no choice. Yeah, I mean, we built the most advanced lithium refinery in the world, by the way. So it's not just... Like, our lithium refinery in Corpus Christi is not just a copy of what others have done. It's an entirely new process that is fundamentally more efficient and more advanced than anything else in the world. The same is true of our cathode refinery here in Austin. And we wish others would build this. Can other people please, for the love of God, - Help in the name of all that is holy, can others please build this, build this stuff? It's not the first time you asked. Exactly. I mean, this is not the first time you've said something like this. Like, why do we have to build these things? Why can others not also please, can someone else build these things? Well, I mean, this is a, it's very hard to build these things. And we build them out of desperation, not because nobody else is building lithium refineries and cathode refineries. You know, we're pretty much the largest, not just the largest, but also the only lithium refinery and cathode refinery in America. So, yeah. So we're making moves to make sure that no matter what happens, Tesla will prosper. Great. Unfortunately, that's all the time we have for Q&A today. We really appreciate everyone's questions, and we look forward to talking to you next quarter. Thank you very much, and goodbye. Very cool.