Rod Lache
Hi, everybody. I apologize if this has been answered. I’d some phone problems here, but I was hoping you might be able to help us with what you see as the run rate of sales for Model S right now and that bridge to the 55,000. Should we look at the 40,000 deliveries or maybe it’s 46,000 if you annualize what you did and add in the delayed Model D? Is that a run rate, and then to get from here to 55,000, where is China now? What does it need to be and what actually are you including for the Model X this year?
Elon Musk
Yes. So [indiscernible] even if our sales in China were zero this year, zero, I’m still confident we could do the 55,000 cars, [they might be zero] [ph]. So as far as what the mix is between S and X, it’s really tricky, I wish I could tell you with accuracy, but it really depends on how the production ramp goes with the X when we start up this summer. And even small changes in that ramp can have quite a dramatic effect on X production.
Deepak Ahuja
So, actually for the calendar year because it’s late.
Elon Musk
Exactly.
Deepak Ahuja
Long-term makes no difference.
Elon Musk
Yes, exactly. If we are producing and I would say 800 Xs a week, and if - several weeks it’s like several thousand cars. So it’s just really - it’s really tricky to predict it from - I can much easier predict like next year. Assuming people like the car, that’s where you start to see, yes, I don’t know, 40,000, 30,000 40,000 at least. Maybe, 50,000, let’s call it 30,000 to 50,000 Xs next year.
Rod Lache
Okay. And clearly up until now as you pointed out, you’ve been able to hit all these numbers without any advertising and marketing.
Elon Musk
And no endorsements, and no discounts.
Rod Lache
Right, to get…
Elon Musk
We haven’t paid anyone to pretend that they like our car.
Rod Lache
Right, and…
Elon Musk
Which is a very important point.
Rod Lache
And no franchise dealers and you know all these things that you know - people had said that you might need to do, you’ve been able to do it without any of them. But I’m just curious about kind of longer-term to get to the volume objectives that you are looking for this year and beyond, is - are all of those in your view achievable while avoiding the franchise dealer model, while holding back on advertising and marketing and while in some cases even raising prices for example, in Europe to adjust for currency or any of those impediments to the demand objectives that you have and would you modify the strategy in any way to achieve these volume numbers?
Elon Musk
I think we’re going to be okay on the demand side for this year. I mean maybe something changes next year but I think we’ll be okay and I don’t think we’re going have to do a bunch of advertising or [indiscernible] with the dealers or anything like that this year and or discount the cars or anything like that. So if I - I do want to emphasize that whenever you feel like a celebrity or some prominent person driving our car they all paid full retail. There was no discount. We didn’t give them the car, they are buying the car and they are driving because they really believe in the car, not because someone paid them to pretend that they do. So we may give them credit for the people [indiscernible] brought the car. So yes, I think we - I do have a secret weapon on the demand side that will probably start to deploy later this year for demand generation. We’ll see how that goes. It isn’t totally necessary but I think and it could be pretty interesting, I could [indiscernible] dealers.
Rod Lache
Okay. And just one last question I had, you mentioned in your letter that the margin was pressured half by revenue and half by cost factors. The FX part of this was pretty clear but there was a comment in there about deferred autopilot revenue, could you just explain, maybe just elaborate a little bit on what you meant actually in that description of the margin variance?
Deepak Ahuja
On that particular one, Rod, we announced several features that the autopilot functionality or hardware will deliver. Those features - although the hardware is in the car, some of them will get activated through software releases later this year. And so based on the [indiscernible] aspect of revenue for accounting we had to defer some of that revenue into 2015. And I think it’s as simple as that. Yes.
Rod Lache
Okay. That variance versus the 28% original objective or is that versus - what was that comparison against?
