Gigapress
Trying to be less wrong
No.
This is totally incorrect save for the Bitcoin and Solar Roof part, and it directly contradicts what Tesla leaders have stated on both of the last two earnings calls. Does it not get tiresome being so grumpy and pessimistic all the time?
Q4 ‘21
Elon Musk:
“The fundamental focus of Tesla this year is scaling output. So both last year and this year, if we were to introduce new vehicles [such as Cybertruck], our total vehicle output would decrease. This is a very important point that I think people do not -- a lot of people do not understand. So last year [2021], we spent a lot of engineering and management resources solving supply chain issues, rewriting code, changing our chips, reducing the number of chips we need, with chip drama central.
And there were not -- that was not the only supply chain issue, so -- just hundreds of things. And as a result, we were able to grow almost 90% while at least almost every other manufacturer contracted last year. So that's a good result. But if we had introduced, say, a new car last year, we would -- our total vehicle output would have been the same because of the constraints -- the chips constraints, particularly.
So if we'd actually introduced an additional product, that would then require a bunch of attention and resources on that increased complexity of the additional product, resulting in fewer vehicles actually being delivered. And the same is true of this year. So we will not be introducing new vehicle models this year. It would not make any sense because we'll still be parts constrained.
We will, however, do a lot of engineering and tooling, whatnot to create those vehicles: Cybertruck, Semi, Roadster, Optimus, and be ready to bring those to production hopefully next year. That is most likely. But like I said, it is dependent on are we able to produce more cars or fewer cars?”
…
Drew Baglino:
“So throughout 2021, we focused on growing cell supply alongside our in-house 4680 effort to provide us flexibility and insurance as we attempt to grow as fast as possible. As we sit today, sales from suppliers is actually -- it sort of exceeds our other factory-limiting constraints that you mentioned, Elon, in 2022, or to say differently, 4680 cells are not a constraint to our 2022 volume plans based on the information we have.
But we are making meaningful progress of the ramp curve in Kato. We're building 4680 structural packs every day, which are being assembled into vehicles in Texas. I was driving one yesterday and the day before. And we believe our first 4680 vehicles will be delivered this quarter.
Our focus on the cell, the pack, and the vehicles here is driving yield quality and cost to ensure we're ready for larger volumes this year as we ramp and next year. And the 4680 and pack tool installations here at Giga Austin are progressing well with some areas producing first parts. And the internet has also noticed that.”
Elon Musk:
”Yeah.”
Drew Baglino:
“Yeah, I was touring the factory -- the cell factory here. I'm super pumped. It's like a really exciting accomplishment for us to bring everything into one Austin factory here in Texas.”
Elon Musk:
“Absolutely. And just to repeat Drew's point, we are still -- we still expect to be part or primarily chip-limited this year [2022]. So that's the thing -- that's actually the driver.”
Drew Baglino:
“Yeah.”
Elon Musk:
“And that chip limitation should alleviate next year [2023]. And then probably, we transition into a cell limitation battery, you know, total gigawatt-hours of cell limitation, which is when the 4680 will become very important.”
Drew Baglino:
“Agreed.”
…
Elon Musk:
“… and I should say, like, we did short-change the energy business last year, and that vehicle took priority over the energy side. So --“
Drew Baglino:
“Not on cells, but on chip side.”
Elon Musk:
“Yeah, on chip side, exactly.”
Drew Baglino:
“Yeah.”
…
Jed Dorsheimer:
“That's helpful. Thank you. So you what -- do you see that '22 is kind of the opening of that -- the energy business reaccelerating?”
Elon Musk:
“It's hard to predict 2022 because we still have lingering supply chain -- there are still lingering supply chain issues globally. But I think the chip stuff -- at least the chip side of things appears to -- looks like it will alleviate end of this year or '23. I mean, there are a crazy number of chip fabs being built, which is great. The sheer number of chip fabs being built right now is exciting to see, yeah.
So there could be other issues. We're trying to anticipate those as much as possible but, you know, predicting the future is difficult.”
Drew Baglino:
“And the goal is definitely to grow it this year.”
Elon Musk:
“Yeah. We'll grow it this year, for sure. It's just, you know, we -- if we're simply -- we're able to respond to demand, it might grow by like 200% or 300% or something, you know, as opposed to sort of 50% or something.”
Zach Kirkhorn:
“Yeah. I mean, I think it's exactly that. I mean, it's a question of does it double, triple, quadruple? I mean, either way, I think, you know, our plans are pretty ambitious for Megapack this year and storage in general.”
Elon Musk
“Yeah.”
Zach Kirkhorn:
“The exact amount of growth is hard to know. But ultimately -- I mean, to Elon's point about the growth of this business, I mean, we need to be growing it faster than the vehicle business.”
Elon Musk:
“And it will naturally grow faster than the vehicle business once we can less shipthe --“
Zach Kirkhorn:
“Yeah.”
Elon Musk:
“The damn chip constraint, frankly. So it will grow like kelp on steroids, basically, on their own.”
Q1 ‘22
Drew Baglino:
“…[For 4680s] It’s really about rate and yield, which will come in time, as Elon said, over the course of this year and next.”
…
Martin Viecha:
“All right. And maybe the last question from investors is what is the current run rate of 4680 cell production at Fremont and at Giga Texas? What do you expect run rates of 4680 to be in Fremont and Giga Texas or Berlin at the end of the year?”
Elon Musk:
“Well, Berlin is using the 2170 nonstructural pack, so they’re not concerned about 4680. They will transition to 4680 hopefully later this year, but current Berlin production doesn’t require that. We also have, just as a risk mitigation, 2170 nonstructural pack capability here at Giga Texas as well, but if things go according to plan, we will be in volume production with 4680 sometime perhaps towards the end of the third quarter and certainly in the fourth quarter. That’s accurate, Drew?”
Drew Baglino:
“Yeah, and the other thing I would add is with the China COVID shutdown and the semiconductor bottlenecks we had through Q4 and a little bit in Q1, we have sizable cell inventory at the moment and excess cells to support the 2022 volume targets you described. So that gives us the ability to be pretty deliberate in the 4680 ramp where we can maximize learning step by step, take engineering downtime to upgrade key pieces of equipment and modify the structural pack designs to improve reliability all while achieving what you just said.”
Elon Musk:
“Yeah, 4680 output is not a risk to achieving one and a half million vehicles produced this year, but it would become a risk next year if we do not solve volume production by early 2023, but we’re highly confident of doing so.”
