Tesla Motors Inc (NASDAQ:TSLA)

Q3 2018 Earnings Conference Call

, 6:30 p.m. ET

Contents:

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Good day, ladies and gentlemen and welcome to the Tesla Q3 2018 Financial Results and Q&A Webcast. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. (Operator Instructions) As a reminder, this conference is being recorded.

I would now like to introduce your host for today's conference, Mr. Martin Viecha, Senior Director of Investor Relations. Mr. Viecha, you may begin.

Martin Viecha -- Senior Director of Investor Relations

Thank you, Shirley and good afternoon, everyone. Welcome to Tesla's third quarter 2018 Q&A webcast. I'm joined today by Elon Musk; J.B. Straubel; Deepak Ahuja; and a number of other executives. Our Q3 results were announced at about 1:00 P.M. Pacific Time in the update letter 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's of today's call, please limit yourself to one question and a one follow-up. Please press star one now if you would like to join the question queue.

But before we jump into Q&A, Elon has some opening remarks. Elon?

Elon R. Musk -- Co-Founder, Chairman, Chief Executive Officer & Product Architect

Thanks, Martin. So I'll make some opening remarks, then we're going to talk about vehicle safety, Autopilot and Battery Safety and we have a number of people from Tesla here to elaborate on that. I think there's just a lot going on that you would find interesting, but I want to start by thanking all of our customers, employees, and shareholders. This was an incredibly historical quarter for Tesla, Model 3 production stabilized, we delivered a total of 84,000 vehicles globally, which is more than 80% of the vehicles that we delivered in all of 2017. In fact, we delivered more cars in this quarter than we did in all of 2016, in a single quarter.

Model 3 became the best selling car in US in terms of revenue and the fifth best selling car in terms of volume. We saw higher revenues and significantly better profitability in our energy business, in fact I think for solar it made them the best quarter ever for solar. We achieved GAAP net income of over $300 million, increased cash and equivalents by $731 million and achieved a greater than 20% gross margin of Model 3.

Moreover, we expect to again have a positive net income and cash flow in Q4 and I believe our aspirations certainly will be for all quarters going forward. I think we can actually be positive cash flow and profitable for all quarters going forward, leaving aside quarters where we may need to do a significant repayment, for example in Q1 next year, but I think even in Q1, I think we can be approximately flat in cash flow by end of quarter.

This quarter was made possible by the incredible execution of our employees across the Board from sales, production, delivery, service, energy engineering finance and all of our G&A teams, really every part of the business executing incredibly well. And when I think I want to gain probably incredibly hard work, especially I want to thank customers who helped -- it's like many of you haven't heard of this, maybe this has happened before, but I've never heard of it a case where a company's customers actually cared about the future of the company so much that they volunteered their time to help the company succeed.

I think that's amazing, just don't see that anywhere. So, yeah, like really it makes choking out actually. This quarter, we started rolling out Version 9.0 of our software which is the biggest software upgrade in three years and Model 3 received a 5-Star Safety Rating In Every Category and subcategory, they get less probability of injury of any car that the US government has ever tested.

Looking ahead, we expect to produce and sell even more Model 3's in Q4. And I expect that trend to continue into Q1 and we're excited to bring Model 3 to Europe and China early next year, given that the market for mid-size premium sedans in those regions is even larger than in North America.

I said before that we must prove that Tesla can be sustainably profitable. This quarter was an important step toward that and I'm incredibly excited about what lies ahead. So this was, yeah, just a -- so proud of the Tesla team, our customers really appreciate the support of our long-term shareholders and yeah, just want to have -- I mean half of the Tesla team are super appreciative of your support, so it was actually -- been a very difficult time.

All right. Now let's move to, start-up with vehicle safety. Madan, who is our Lead Vehicle Safety Engineer been with company for a long time. Madan, how many years you've been?

Madan Gopal -- Principal Safety Engineer

(multiple speakers) 10 years.

Elon R. Musk -- Co-Founder, Chairman, Chief Executive Officer & Product Architect

10 years? Wow. So yeah, I've been working with Madan for 10 years. We've had so many conversations on vehicle safety, wow, and we're really going to try to go the extra mile with vehicle safety, not just like there is a series of government mandated tests, but you know what some companies do is they game the system. So they know where the side point impact is going to be, they strengthen right in that position. At Tesla, we like, OK, what is the weakest point in the car, let us test with that position. So the actual safety is not fully captured in the tests because we anti-game the system. Madan, if you could?

Madan Gopal -- Principal Safety Engineer

Thank you, Elon. Just want to give you a very quick background about myself. Like I said, joined Tesla 10 years, I'm extremely very happy to mention working with extraordinary set of very passionate and very hardworking individuals and that essentially shows in our product. So that's very important for us and also important is our principal mission statement on safety because what you want to do is, safety has been -- is probably the important factor for our vehicle, it's not just for electric vehicle, any vehicle period and that's fundamentally differentiates us, so which essentially helps us to keep adding new features and new safety technology. And that's very important and that shows in Model 3, latest things that we have.

Also the fact that we have electric vehicle, the design and architecture gives us a fundamental benefit for our traditional vehicles. And that takes here for example whether you have a block-up engine in the front where we can work with using a pretty much open architecture in the front and the whole fact that you have all the electrical and high voltage and motors and all of that, almost below the centre gravity of the vehicle is a lowest probability of reduce the lower risk, that significantly benefit.

Elon R. Musk -- Co-Founder, Chairman, Chief Executive Officer & Product Architect

I think potentially we have Newton on our side, and having Newton on your side is definitely the way to go.

Madan Gopal -- Principal Safety Engineer

Exactly. So in the latest series of tests, I would like to specifically talk about Model 3, Nixon did a series of tests, actually four tests for one front, two side and one roll-over test. And if you look at it, we have been calculating how can we distinguish within the five star. There are so many vehicle that already gets five star, and if you look at within the five star (multiple speakers).

Elon R. Musk -- Co-Founder, Chairman, Chief Executive Officer & Product Architect

That is all the same.

Madan Gopal -- Principal Safety Engineer

Yeah, exactly. So, if you look at there, the metrics we came out with which is a part of US and cap rating itself has a lowest probably of injury and Model 3 has the lowest. And just to give you a context, there are total of 900-plus vehicles since 2011 which have been rated. So, the fact that Model 3 is the best among all the 943 to be exact. So, that speaks the volume and I'm very happy to say that Model 3 has achieved, we are not stopping right now. What we would like to do is next is, how we can make use of the active safety and Autopilot features and make it even more improvement, so the next area that we're focusing on how to integrate active and passive safety, that's our next area of challenge to which we will improve for sure.

Elon R. Musk -- Co-Founder, Chairman, Chief Executive Officer & Product Architect

Yeah, just withering that the safety extends to not just people in the car, but also pedestrians.

Madan Gopal -- Principal Safety Engineer

Correct.

Elon R. Musk -- Co-Founder, Chairman, Chief Executive Officer & Product Architect

Yeah. So, not having a big engine block in the front of the car is really helpful, so because if you -- if a car would hit a pedestrian, we'll get active safety next because the best thing is obviously not to hit car pedestrian, the fact that their (inaudible) can condense so far in is really helpful because it ends up being like sort of -- like a trampoline or like -- it has it -- you just end of an rock underneath us, that's very helpful. So, it's helpful for pedestrian safety and for the safety of people in the car. And then, you may feel how like head-on collision with another car, the extended sort of trouble zone of a Tesla Model S/X 03 is helpful to the people in the Tesla and the people in the other car, those aren't just people in the car.

Madan Gopal -- Principal Safety Engineer

I would like to add one item which is essentially how we look at the real-world safety, which has always been an important element for Elon. So, if you look at the -- our block force we showed how we handle the centrefold impact in the frontal. By the way, that's not part of NCAP rating, it is just to show we go over and above the NCAP rating to make sure it's real-world safety, that's very important for us.

Elon R. Musk -- Co-Founder, Chairman, Chief Executive Officer & Product Architect

Exactly, that's what I mean by, we're like anti-damage system like, what is the worst way that the car could be hit? Not just sort of strength and where we know the test will happen and that kind of thing. So, we're all in these cars, our friends are in these cars, family is in the car, so we care about safety, well actual, I think safety is boring, but not at Tesla. So, thanks, Madan. Thank you for your decade of hard work and the rest of who is in the safety team and with that, let's move on to Autopilot and guys can just give an update on sort of Autopilot software, AI and hardware, yeah.

Stuart Bowers -- Vice President of Engineering

Okay. This is Stuart Bowers. We'll soon begin to roll out the team's most advanced Autopilot feature ever, Navigate on Autopilot. In our last release, we launched a new set of neural networks that combine together, provide a view of everything happening around the car. With Navigate on Autopilot, we use information to understand exactly where the car is on the highway system and to automatically change lanes, handle forks and take high-curvature exits to follow a Napf route. Initially, it will require drivers to confirm lane changes using the turn signal before the car moves into an adjacent lane. Future versions will allow customers to waive the confirmation requirement they choose to.

One area that I'm personally really excited to build on this improvement is active safety. With the advancement in neural networks covering 360 degrees of view around our car, we can provide a level of constant vigilance that humans just can't. Ultimately, this will allow us to warn and even intervene for an enormous percentage of modern accidents and to ship these improvements as software accretes to our existing customers.

Elon R. Musk -- Co-Founder, Chairman, Chief Executive Officer & Product Architect

We have a lot of -- we see this whole time in the data, where the cloud will do an automatic braking event and save a pedestrian or another car from impact. This happens all the time.

Stuart Bowers -- Vice President of Engineering

All the time.

Elon R. Musk -- Co-Founder, Chairman, Chief Executive Officer & Product Architect

Yes, all the time. I guess everyday.

Stuart Bowers -- Vice President of Engineering

Yeah, the team is on a incredible work here and by bringing up more of the cameras around the car, we can detect things as they come toward us, not just directly in front of us.

Elon R. Musk -- Co-Founder, Chairman, Chief Executive Officer & Product Architect

Yeah.

Peter Bannon -- Director of Hardware Engineering

Hi, this is Pete Bannon. The hardware 3 design is continuing to move along. Over the last quarter, we've completed qualification of the silicon, qualification of the board. We started manufacturing line and qualification of the manufacturing line. We've been validating the provisioning close in the factory. We built test versions of Model S/X and 3 in the factory to validate all the finish of the parts and all the processing flows. So, we saw a lot of work to do and the team is doing a great job and we're still on track to have it ready to go by the end of Q1.

Elon R. Musk -- Co-Founder, Chairman, Chief Executive Officer & Product Architect

Great. And that will be roughly a 1000% increase in processing capability compared to the current hardware and so sounds good, a giant of crew despite being a bump, it costs about the same costs volume and car consumption are approximately the same as the current hardware, but it is a tenfold increment in frames per second and improved redundancy as well. But very importantly, very important to emphasize is that, the only thing that needs to change between the cars used today and cars produced in the second quarter of next year is swapping up the autopilot computer. And this is a simple change that takes less than half an hour and service to upgrade the computer. And one will be able to upgrade their computer to full-self driving capability or upgrade their car to full-self driving capability with a simple service visit. So, we expect all cars with the hardware to sensor suite, basically anything made in the last roughly two years will be upgradeable to full-self driving.

Peter Bannon -- Director of Hardware Engineering

Yeah, in fact a lot of the cars we're using for testing today have in fact an upgraded hardware too.

Elon R. Musk -- Co-Founder, Chairman, Chief Executive Officer & Product Architect

Right. So, it's very important to emphasize that people shouldn't (inaudible) if you want to wait until that comes out, but there's no need to wait till it comes out because it's just a very simple plug-and-play change to get the full-self driving. And anyone who is patron for self-driving option, we'll just get it done for free. And anyone who saw once to order full-self driving at this point, it's just an off menu item, you can still order it. But we took it off the order menu just because it was really creating a lot of friction in the sales process, and people didn't understand the difference between enhanced autopilot and full-self driving. So, just to simplify the order process we switched that off and anyone who asks for it can certainly get it and it really ends up being a discount on future capability. But to be clear, there's definitely no need to wait until Q2 to order a car. We want to make just completely seamless process. So, there's no advantage ordering now versus Q2. Andrej, do you want to --

Andrej Karpathy -- Director of AI & Autopilot Vision

Yeah, certainly. Hi, everyone. My name is Andrej Karpathy. I'm the Director of AI here at Tesla. And my team trends all the neural networks that analyze the images streaming in from all the cameras for the Autopilot. For example, these neural networks identify cars, lane lines, traffic signs and so on. The team is incredibly excited about the upcoming upgrade for the Autopilot computer, which Pete briefly talked about. This upgrade allows us to not just run the current neural networks faster, but more importantly, it will allow us to deploy much larger computationally more expensive networks to the fleet.

The reason this is important is that it is a common finding in the industry and that we see this as well is that as you make the networks bigger by adding more neurons, the accuracy of all their predictions increases with the added capacity. So, in other words, we are currently at a place where we've trained large neural networks data work very well, but we are not able to deploy them to the fleet due to computational constraints. So all of this will change with an acceleration of the hardware and it's a massive step improvement in the compute capability and the team is incredibly excited to get these networks out there.

Elon R. Musk -- Co-Founder, Chairman, Chief Executive Officer & Product Architect

Great. Thank you. And actually I said this before when I -- I think soon but, better out in long-term future. We absolutely see the future as kind of as sort of shared electric autonomy, so that you'd be able to do right handling or share the car anyway, you know sort of long-term model that's probably some combination of like Uber, Lyft and Airbnb, they will be Tesla dedicated cars for right handling and there will be -- and any customer will be able to share their car at will, just like you share your house in Airbnb. So, its a combination of those two models, I think is pretty obviously where things are headed long-term. The advantage that Tesla will have is that we'll have millions of cars in the field with full autonomy capability and no one else will have that. So I think that, that puts us -- that will end up putting us in the strongest competitive position long-term.

And then Laurie, can you finish off with -- lets talk about factory safety and thank you for the hardwork of you and your team and I think we made great strides and yes, please go ahead.

Laurie Shelby -- Vice President, Environment, Health and Safety

Yeah, thanks. We have the safest cars made by the safest people. So it's exciting time here at Tesla. All car and manufacturing factories have injuries. At Tesla, we have a commitment to zero injuries and our target is actually on good reporting. So we have good reporting of injuries, good reporting of near misses, good observations and lots of improvement. So to be the safest company in the world where we have to be committed to that and everybody here is. So we're actually steadily getting there and we're not going to stop until we're there.

Elon R. Musk -- Co-Founder, Chairman, Chief Executive Officer & Product Architect

Absolutely. Yeah, so you can -- I mean actually like, for example we have like some, sort of for example like, we do get these like quite unfair acquisitions for example one of the most like that we are under reporting injuries and it's worth noting that OSHA completed their investigation and concluded that we have nothing to do anything of the sort.

Laurie Shelby -- Vice President, Environment, Health and Safety

Correct, correct. The factory here had a four months long collision investigation and it basically proves that we are recording properly and doing as we as we should be. So it's much different than what you would read about in the press.

Elon R. Musk -- Co-Founder, Chairman, Chief Executive Officer & Product Architect

Yeah, those are true.

Laurie Shelby -- Vice President, Environment, Health and Safety

Yeah, yeah, I'm very proud of the team for that. It's -- yeah one point I think people don't know is I've been here about a year now, time flies when you're having so much fun. But when I joined we were already really a fraction -- our injury rate was a fraction of what it had been when Toyota and GM ran the factory in the new days. So what we're all about is really continuing to make improvements from there. And what's also important is not to have serious injury and that's extremely rare here at Tesla. We have really strong focus on prevention and also using mitigating controls, so we see these types of injuries don't occur. I mean most of the injuries that we have are muscular, sprains and things like that.

Elon R. Musk -- Co-Founder, Chairman, Chief Executive Officer & Product Architect

Yes, it's essentially -- it's muscle strain and getting scratched.

Laurie Shelby -- Vice President, Environment, Health and Safety

Exactly.

Elon R. Musk -- Co-Founder, Chairman, Chief Executive Officer & Product Architect

But that's the most of the injuries here.

Laurie Shelby -- Vice President, Environment, Health and Safety

Yeah, hand and finger cut and sprain. So, I kind of just want to break down a few things that my team is been working on along with all the leaders here. You know first it's people and engagement. So one of the first things is meeting with you, Elon, I meet you with on a regular basis. We meet with all the production leaders. So it's full-on engagement on improving safety. We have built a really strong EHS team, the best and the brightest.

We have -- and our EHS team is actually embedded into the line on the factory because we learn the process, we may learn the people, you don't know how to improve unless you're out there on the line, on the process, engaging with the associates, listening and learning from our associates. So we have really strong engagement health and safety committees. We do find it, fix it locks or walker -- our leaders are out there walking and also looking for improvements. And actually just this quarter, we had over 15,000 improvements, I mean that's like amazing. So very, very exciting about that.

We also look at risk reductions in human performance. People are going to make mistakes, so we're going to design in so we feel safely. We have an early symptom intervention program, this is where we have industrial athletes go out on the line and work with our associates before anything happens. Like if you have a pain, let's work it out, let's strengthen and really get our employees fit.

So we're doing that. We've also just opened a new and improved health clinic. So when injuries do occur, we get the absolute best care for our associates and it's actually overseen by one of California's leading orthopedic surgeons. And we did that because most of our injuries like we said like 80%, 85% are those sprains and strains. So now they get that best care here on site and we have 24/7 care. We're actually staffed by three full-time doctors and nurses and I'm really super happy with the care they're giving and I think employees are as well.

And the third --

Elon R. Musk -- Co-Founder, Chairman, Chief Executive Officer & Product Architect

Yeah, we're going to expand on that, so the -- Tesla sort of health clinic both at three months and its sort of -- we have a really immediate first-class healthcare available right on the spot when people need it. And this is not just for workplace, this is for workplace and non-workplace.

Laurie Shelby -- Vice President, Environment, Health and Safety

I know that's super exciting.

Elon R. Musk -- Co-Founder, Chairman, Chief Executive Officer & Product Architect

Yeah. If (multiple speakers) if you come injured for any kind of reason then there is healthcare middle on the on-site.

Laurie Shelby -- Vice President, Environment, Health and Safety

That's where we plan to go, exactly. And then finally just being proactive because that's what we're about, innovation and proactive. I mean we joined national safety organization. We partner with many leading universities including California, Berkeley Center for Occupational and Environmental Health. We do presentations there. We work with the automotive industry and do bench-marking all the time. We're always looking and bringing people in to look for things that we can do better, and for new technology and innovations and safety. So and with all of that, we have made improvements in our injury rate. We are more than 10% better year-over-year and our last workdays and our days away, but the most important thing is we're also getting all those good engagement observations they're moving up. So injuries down, observations engagement up. Thank you.

Elon R. Musk -- Co-Founder, Chairman, Chief Executive Officer & Product Architect

Thanks Laurie. We'll provide regular updates on what might there be and yeah our goal is unequivalently to have the safest factories in the world where people look forward to coming work in the morning. So, its like, yeah that's our goal. All right. With that, we can move to questions.

Martin Viecha -- Senior Director of Investor Relations

Cool. Well, thank you very much. Sheree, let's go to the first question please.

Questions and Answers:

Operator

Thank you. Our first question comes from Dan Galves with Wolfe Research.

Dan Galves -- Wolfe Research -- Analyst

Hey, thanks for taking my questions. Congratulations on the quarter, it's really amazing to see this landmark quarter after covering the company for so long. And thanks for bringing some of your team onto the call, it's very interesting. My question is about cell supply. There's been some noise about tight cell supply in sparks and tight labor supply, like in a short-term could you just talk about whether demand is outpacing supply of battery cells. And kind of what's your plan for long-term expansion including cell supply in China?

Elon R. Musk -- Co-Founder, Chairman, Chief Executive Officer & Product Architect

JB, you want to take that?

Jeffrey B. Straubel -- Chief Technology Officer

Sure, I can speak that. This is JB. We have had a period where the supply was fairly tight for Model 3, but it did not really constrain the Model 3 production in (multiple speakers) mybe for a few days. The impact was larger, it felt on the energy products. And that's still is somewhat tight, but we do as we pointed out in previous discussions, we do have third party supplies of energy cells. So that production can continue even, even independently of the Panasonic supply in sparks, so that's been very helpful and that is expanding in future quarters.

And also the Panasonic supply is expanding. The productivity of existing lines is continuing to improve, with a lot of hard work from the engineering teams and just operational stability. And we continue to bring online new production lines. So even just in the last several weeks, we've started off yet another self production line with Panasonic. And through the end of the year, there's another line coming on and then one shortly after that. So there's a steady increase in the total supply that should keep us ahead of even Model 3 growth and also should let us have a larger percentage of energy supply be sourced from giga locally.

Elon R. Musk -- Co-Founder, Chairman, Chief Executive Officer & Product Architect

Yeah, we are making it pretty nutty around the work, looking around batteries and Martin like -- I think we're (multiple speakers).

Martin Viecha -- Senior Director of Investor Relations

Yeah, so at the moment if you look at for example for Q3 all electric vehicles made around the world, their total battery capacity was about 20 or 19 gigawatt hours. And we -- what we produced in Q3 was about the same or a little bit higher, its about half of world's batteries basically.

Elon R. Musk -- Co-Founder, Chairman, Chief Executive Officer & Product Architect

Well and is that because we also source cells from Japan and elsewhere because each one is just giga or --

Martin Viecha -- Senior Director of Investor Relations

So, yeah, just the giga itself is about 20 and on top of that Tesla makes is, I don't know another four or five.

Dan Galves -- Wolfe Research -- Analyst

Got it. That's a huge advantage, is there plans that you can talk about for cell supply in China? Will that be produced in China, I'm assuming so?

Elon R. Musk -- Co-Founder, Chairman, Chief Executive Officer & Product Architect

Long-term it would be produced in China, short-term we're not certain of the short-term situation, but long-term certainly.

Dan Galves -- Wolfe Research -- Analyst

Got it. Okay, Thanks very much.

Martin Viecha -- Senior Director of Investor Relations

Thank you. Let's go to the next question please.

Operator

Thank you. Our next question comes from Pierre Ferragu with New Street Research.

Pierre Ferragu -- New Street Research -- Analyst

Hey, thank you for taking my questions. I was very surprised in the numbers you reverted today by your gross margin performance on the model 3. So, if I remember correctly you were expecting more than 15% gross margin for this quarter and you actually did better than 20%. So, can you take us through what improved like faster and better than you had initially anticipated in the manufacturing line and where these improvements came from?

Deepak Ahuja -- Chief Financial Officer

Deepak here and (inaudible) and others please feel free to join. Our improvements on the cost side were in every aspect of cost. So clearly our manufacturing labor hours improved significantly. Our overall manufacturing costs dropped almost 30% sequentially Q2 to Q3. We produce more volume, so we had better fixed cost absorption. We had wireless craft, our yield on each of the lines across both factories improved significantly. And as we look forward, we see even more opportunities. We are going through this phase where we are now stabilizing production and the team can now intensely focus on cost optimization. And that trend will just continue in Q4.

Elon R. Musk -- Co-Founder, Chairman, Chief Executive Officer & Product Architect

I think we're also being relatively -- on the conservative side when we predicted -- when we said like we're being --

Deepak Ahuja -- Chief Financial Officer

Our expectation was, we would do better, but we want to be conservative, you're right. And in terms of our guidance that we gave for Q3.

Pierre Ferragu -- New Street Research -- Analyst

Okay, thanks. That's great. And then on as a quick follow-up, you've announced although that we can like a mid range kWh is with a smaller battery pack. And I was wondering as you're looking at expanding product channels modestly, I think about it as you had two options, one was to grow and to keep what you're seeing higher end, higher ASP kWh. And the other one was to go for a lower cost car, and stick to the US. So, how did you decide the sequencing of these two things? Why is the lower kWh now and going abroad early next year?

Elon R. Musk -- Co-Founder, Chairman, Chief Executive Officer & Product Architect

Well, we're trying to provide most affordable electric car options that we can. And so as we can -- we just don't have the ability to get to the $35,000 car right away. We thought this might be a way to offer it as an intermediate step. And that's really it. We expect to start producing a significant volume for Europe in January, and obviously take some time to ship. So deliveries, probably if we finish the deliveries in Europe kind of in the late February, March timeframe, because the people work in California to a customer in Europe. And for us, our car only account as liberty, if it reaches the end customer and all the paperwork is completed correctly. So it's the highest possible standard for considering a sale.

Unidentified Speaker --

And also believe that delivering cars.

Elon R. Musk -- Co-Founder, Chairman, Chief Executive Officer & Product Architect

Yeah. We may or may not deliver cars in APAC in Q1, but certainly in Q2. It will be kind of borderline as whether our cars delivered in APAC by the end of Q1. So I can't say for certain, they're definitely in Europe, but -- and then definitely in APAC in Q2.

Martin Viecha -- Senior Director of Investor Relations

Okay. Let's go to the next question please.

Operator

Thank you. Our next question comes from Romit Shah with Nomura Instinet.

Romit Shah -- Nomura Instinet -- Analyst

Yes, thank you. I guess just along those lines, you indicated that you're going to bring Model 3 to Europe early next year. Where would you like to see production in order to support that ramp overseas?

Elon R. Musk -- Co-Founder, Chairman, Chief Executive Officer & Product Architect

Well, initially production will occur, I mean these last -- take several months of production is, vehicle production take place at our car plant in California.

Romit Shah -- Nomura Instinet -- Analyst

Sorry, I meant to ask, where would you like to see that production rate on a weekly basis go to in order to support that ramp?

Elon R. Musk -- Co-Founder, Chairman, Chief Executive Officer & Product Architect

You know, it's hard to predict with accuracy. The -- and there's also to know like what the tariff for is and everything. So long-term, I'd like to say like, we're not talking about like next quarter, so like what it is -- likely global demand for Model 3. It's on probably on the order of anywhere from 500,000 to 1 million cars a year, I would say, good global demand for Model 3. It looks to me like say the 3 series one that's around 0.5 million, the BMW 3 Series about 0.5 million a year globally. And generally we find we have to compete the BMW 3 Series quite well. So it seems like logical therefore that we would want to have a higher production or higher demand, they maybe somewhere between the kind of the BMW 3 Series and the Volkswagen Golf, which is about a 1 million units a year. So yeah, that's why I'd say anywhere from 500,000 to 1 million units long-term.

Romit Shah -- Nomura Instinet -- Analyst

And you have to add new lines to support that or are you just going to continue to remove bottlenecks on the existing lines?

Elon R. Musk -- Co-Founder, Chairman, Chief Executive Officer & Product Architect

No, we definitely are going to do local production in China, we're moving rapidly on that. So we're branding to have Model 3 production for the China market or the Greater China market active certainly in next year, it will all be happening next year, but it will be done with a very -- in a very capital efficient manner, much more akin to the way we did General Assembly line 4 versus General Assembly Line 3.

And then we'll also have a factory in China -- and in Europe long-term, because it's pretty silly to make cars in California and ship them all the way to Europe that's far. Yeah, its interesting. I'm not talking about S/X, I'm just talking about the 3. So S/X will continued to be made in California, I think probably exclusively here before cars were trying to maximize affordability, it makes a lot of sense to produce those cars at least in the continent where they are consumed or more significant.

Martin Viecha -- Senior Director of Investor Relations

Okay. Let's go to the next question please.

Operator

Thank you. Our next question comes from George Galliers with Evercore.

George Galliers -- Evercore -- Analyst

Thank you. Maybe just following-up on the previous question, is the target still to produce 10,000 Model 3's a week in Fremont. And I think you mentioned in the past that once you got to run rate of around 5,000, you'd be better placed to assess what CapEx is required to get there. So as of today, do you have a better idea of what CapEx is required to get to that kind of level at Fremont?

Elon R. Musk -- Co-Founder, Chairman, Chief Executive Officer & Product Architect

I think we are not prepared to speak to that right now, except that it will be considerably less than money that we've spent to get to 5,000 in the first place, like I think quite dramatically less, I'd say like probably say passed like 7,000 units for Model 3 with really minimal CapEx.

Unidentified Speaker --

Very minimal.

Elon R. Musk -- Co-Founder, Chairman, Chief Executive Officer & Product Architect

Yeah, very minimal to get to 7,000 a week. And then I mean that's really just basically solving improving our time of the existing lines, and we can do 7,000 a week. So and then it gets a little harder as you start to go above 7,000, it would need -- at least bringing lines down in Fremont for significant upgrades to get to 10k. But also just not -- we're not talking about massive amounts of CapEx. But I would say like long term it's -- again long-term, it's something -- if we are thinking these are quarter-by-quarter basis, it's very difficult because when you have an exponential growth rate like we do, I mean, if you look at Tesla's cumulative deliveries over time, just like the cleanest exponential curve that I've ever seen. So -- but small movements in calendar time can look like a very large hit or miss, one way the other, because it's such a steep curve, that's why it's very tricky to predict things on a quarterly basis, but a lot of user if you go out in a year or so. Yeah, I mean, probably long-term it's -- as we serve 7,000 to 10,000 cars from Fremont of Model 3 and then kind of 5,000 to 8,000 in rest of world something like that, this is a guess.

Romit Shah -- Nomura Instinet -- Analyst

Okay, thank you. And then just as a follow-up, in the letter you do point out the size of the European market for premium mid-size sedans is roughly twice that of the US. Could you also maybe just comment to what your expectations often makes in Europe based of Model S and Model X, do you expect a richer mix in Europe versus the US or is it fairly for EMEA?

Martin Viecha -- Senior Director of Investor Relations

We give in zero thought, I mean this is like those not -- I don't know, Martin, do you have any

All I'm aware of is that because of cold weather, probably all will drive and long battery range will be highly demanded in Europe, but apart from that, I mean, we ultimately have to start selling the car to see what the demand is.

Elon R. Musk -- Co-Founder, Chairman, Chief Executive Officer & Product Architect

So, yeah, I mean it seems like -- it's likely to be comparable to, its pretty (technical difficulty) like price in Europe then most likely to be at least as much the amount in Europe that's (inaudible) like that's pretty safe. But I don't really estimate electric cars that everyone can afford not to sort of mine -- high option value cars, it's like -- if we could produce a $35,000 car today, we would do it. We need more work, there is more work to do before to make $35,000 car and have it be positive gross margin, not we're probably less than six months from that, that's our mission.

Martin Viecha -- Senior Director of Investor Relations

Great, let's go the next question please.

Operator

Thank you. (Operator Instructions) Our next question comes from Maynard Um with Macquarie.

Maynard Um -- Macquarie -- Analyst

Hi, thank you. Congratulations on a great turning point for Tesla. As you continue to scale the business, can you talk about how we should think about -- how you balance profits versus reinvestment, you're targeting sustainable GAAP profitability and cash flow. But I'm curious, if there's a level of GAAP profitability or GAAP operating margin or cash flow you want to hold and then take the excess to fund new growth or accelerate opportunities?

Elon R. Musk -- Co-Founder, Chairman, Chief Executive Officer & Product Architect

Sure, I mean, maybe to if I characterize that question it would be like, are we stopping new vehicle development in order to achieve GAAP profitability and cash flow possible, will that be an accurate, is that essentially like, the answer is no. So we've made significant progress on the ROI. And so in fact I improved the prototype production recently, so it will be 2024 that's in volume production. We made great progress there, also continue to make progress on the semi and the newer Tesla Roadster.

And then actually product them, of course, we are most excited about is that (inaudible), I think that's going to be the next level stuff there. And then -- I should, I want to get mention the Solar Tower Roof, we're also start getting into volume production of the Solar Tower Roof next year. That's quite a long development cycle, because many things it's roof its going to last 30 years. So even if we do accelerate life testing as fast as possible, there is still minimal amount of time required to do that and there is lot of engineering that goes into how do you put on the Solar Tower Roof with and not be really labor intensive and things so.

So there's lot of engineering not just in the tail, but in the ways done. And then we've got continued improvements in power vault, power pack other energy products. I think we've got the most existing product roadmap of any company by far. I'm not even sure like probably twice -- I don't even know who would have -- which company would have a better product roadmap or even close, yeah maybe you know, I don't know about that.

Maynard Um -- Macquarie -- Analyst

Great. And when you talk about Tesla having its own road sharing fleet or giving the people the ability to loan out their car like in B model, I'm curious if your long-term plan is to build a platform that's going to enable companies to write-up occasions to turn the car directly into an application. And then can you also maybe just talk about that business model, is that should we be thinking more about like a revenue sharing model sort of like how Apple takes piece of revenue generated for applications from iPhones? Thanks.

Elon R. Musk -- Co-Founder, Chairman, Chief Executive Officer & Product Architect

I don't know about turning cars in application exactly, I mean maybe or right ready to think that maximizes usefulness. And so if there is a way think of where third parties can do something and that could make sense, but I do know for sure that has a well operated to own right handling or its own right handling service, compete directly with Uber and love to obviously.

And -- but then also have the ability for customers to offer their car add or subtract their cars to fleet. So we're company owned fleet and the company owned fleet will just be where there aren't enough customer cars to be length out. So if we find again a particular metro, they aren't customers who are owing to either a car to the shared fleet then that's where we will supplement with a Tesla own fleet. So that's why it sorts of a combination of Uber being and Airbnb. And then we charge something probably comparable to yeah to have that say the works or I don't know we charge 30% or something in order for somebody to add the cars to fleet. I think that's like a pretty sensible way to go.

Martin Viecha -- Senior Director of Investor Relations

Great. Let's go to next question please.

Operator

Thank you. Our next question comes from Adam Jonas with Morgan Stanley.

Adam Jonas -- Morgan Stanley -- Analyst

Thanks everyone. First question is on governance as the Company conducts it's search for a new Chairman, what are the attributes, experiences of that person that you think would be a best fare or best value for Tesla?

Elon R. Musk -- Co-Founder, Chairman, Chief Executive Officer & Product Architect

Actually, I restrict questions to operational topics.

Adam Jonas -- Morgan Stanley -- Analyst

No problem, yes I do. Can you tell us about the folks who are taking delivers of Model 3, what are the top cars, car models or brands that they are trading in or switching out of how many are new to the brand? That kind -- anything you are prepared to share, and then I have a follow-up.

Martin Viecha -- Senior Director of Investor Relations

Hey, this is Martin. So I've done the analysis of all the tradings that we've received and really the only pattern that I have seen is that, it's sort all across the board and the vast majority is non-premium brands. I think that is the number one message is just that more than half of the tradings we received were priced at below 35,000 were new. But other than that, there is no real pattern, I haven't -- always anything toward highlighting other than is just a lot of people upgrading their cars quite dramatically.

Unidentified Participant -- -- Analyst

Yes, it's a huge upgrade from (multiple speakers).

Elon R. Musk -- Co-Founder, Chairman, Chief Executive Officer & Product Architect

For many people it is the most expensive car they have ever brought. And so they are clearly demonstrating with their money that they -- they are willing to spend extra money to get a Tesla. So like Tesla is a sense like mass market premium.

Unidentified Speaker --

The price log is way beyond the federal tax credit, so clearly there is value that they are proceeding whether it's cost o ownership, whether its sustainability that is the brand and the safety, all of the above is making a large number of customers jump up significantly in their purchase price.

Elon R. Musk -- Co-Founder, Chairman, Chief Executive Officer & Product Architect

Yeah, I mean really I can say, honestly like the top reason to refer a friend by Tesla is going to keep your friend safe.

Maynard Um -- Macquarie -- Analyst

That's a good reason and if I can squeeze since I couldn't ask the first one, you could answer. Do you think that the third quarter is a milestone Elon where you think Tesla becomes sustainably self funding and perhaps not in need of outside capital? Thanks.

Elon R. Musk -- Co-Founder, Chairman, Chief Executive Officer & Product Architect

Yeah, that is our goal. We do not intend to raise equity or debt, at least that's in our intention right now, you know that may change in the future, but the current operating plan is to pay-off our debt and not to refinance them but pay them off and reduce the debt load and overall leverage for the company. And actually almost to that one quite important thing as and this is quite helpful to have these sort of crisis situations with logistics for example. As I dug into the inventory like basically finished product inventory from factory to the customer, I was quite surprised to see how long that took and that it was quite expensive in lot of cases to get cars to customers. This was something I didn't fully appreciate before and we really have a major initiative at Tesla to get the average time from a car exiting the factory to receiving the check from the customer, being in the customers hand as quickly when we need to get the check when we give the car to the customers.

So getting car from factory to customers to get that to be as short as possible. In August, the average time in North America to get a car from the factory to a customer was 30 days, which is embarrassingly long. By the end of the quarter, we reduced it to around 20 days. And our goal in Q4, so the goal and our promise -- but our goal is to get the average time of a car from factory to customer under 10 days. This is a giant improvement in the capital efficiency of the company, because we're making on the order of $75 million worth of products per day -- cars per day.

So every day it requires 75000 -- $75 million worth of capital. So every 10 days is $750 million. And we -- obviously we have a loan from the bank that we can make use of, but the banks will only loan us 85% of the cost of the vehicle which translates to about 70% of the price of the vehicle. So and we've got this loan outstanding which effectively increase the the COGS of the car and then the lose the company to the tune of 30% or whatever it would be inventory of the finished goods intransitives. So that this is really like tightening that and getting that below 10 days in North America and then also improving dramatically the transit time to Europe and Asia and this is where we're like having local factories is actually very important for capital efficiency the overall system because I think over time we want to get to the time from a car going from factory to customer under seven days worldwide.

And then the terms that we have with from our suppliers are on average just over 60 days. Now our cost inventory management also -- there is a lot of room for improvement there. I think we probably cut that down to a few $100 million or so, two parts or something like that maybe $300 million of parts at the factory. So then effectively what we are going to do is reverse the working capital requirements for company quite dramatically to the point where the faster we grow the more capital we have. This is incredibly important for capital efficiency of the company. it's 19 day, Deepak, is there anything you would like to?

Deepak Ahuja -- Chief Financial Officer

No, I think you are totally -- we're reducing our raw material inventory on one hand by keeping production stable finding efficiencies in their house management and supply chain. And at the same time, reducing the time to deliver the car and convert that car into a cash and that significantly improves working capital.

Elon R. Musk -- Co-Founder, Chairman, Chief Executive Officer & Product Architect

Yeah, it's really quite dramatic. So yes I think it sort of profoundly changes the financial effectiveness of Tesla.

Deepak Ahuja -- Chief Financial Officer

Reduce our inventory in Q3, which help -- we had higher payables because -- sorry higher receivables because the quarter ended on a weekend, we won't have that in Q4. So all of this should continue to help us in Q4 and beyond the working capital gain.

Elon R. Musk -- Co-Founder, Chairman, Chief Executive Officer & Product Architect

Yeah, I mean it occurs to me that even if the only thing like even if this was the only thing that has a different was to shorten the time from factory to the end customer. In any given company that would -- compete all other companies over time it would not be a contest.

Martin Viecha -- Senior Director of Investor Relations

Great, thank you very much. Let's go for the next question please.

Operator

Thank you. Our next question comes from Toni Sacconaghi with Bernstein.

Toni Sacconaghi -- Bernstein -- Analyst

Yes, thank you. I have one for Deepak and then a follow-up please. Deepak, the OpEx expense management was very strong in the quarter. I think it was down 13% sequentially and OpEx was only up 5% year-over-year despite revenue growing 71%. So on that front, I mean in hindsight did you get too bloated and needed to get more right sized? And looking forward how do we think about OpEx growth versus revenue growth on kind of a more normalized basis.

Deepak Ahuja -- Chief Financial Officer

Yeah, Toni, so excluding onetime items, our OpEx decreased sequentially by 5% to just clarify that first of all. And a lot of that was driven by the actions we took in Q2 to be more efficient with our employee headcount, how we benefited from that in Q3. And we were really careful in terms of all of our spending. The other piece that helped us is lot of our Model 3 spending on expense sort of R&D is reducing because Model 3 is going into production, so Q2 to Q3 we saw a reduction there. And it just gives you the sense of the leverage of the expenses can have why the revenue is growing dramatically. So our OpEx will increase in the future, but parse through a rate and we will continue to be really, really careful about the spending and I think there are actually more efficiencies that we can find.

Elon R. Musk -- Co-Founder, Chairman, Chief Executive Officer & Product Architect

We are going to find them actually like --

Deepak Ahuja -- Chief Financial Officer

So we will continue down that path certainly.

Toni Sacconaghi -- Bernstein -- Analyst

Okay. And then so -- thank you for that. And then to follow-up, I was just wondering if you could help us a little bit on the back to the gross margin on Model 3 and the $35,000 car. So you know this quarter I impute that Model 3 a piece where maybe $59,000 and that might suggest that gross margins on a $35,000 Model 3 might be about zero. And Elon, I think you alluded to the fact that you know the goal is really to get positive gross margins on a $35,000 car before shipping. Are those all fair assessments and I guess the question is where is -- where would a $35,000 Model 3 be in terms of gross margins today? And where does it need to be before you want to operate broadly to consumers?

Elon R. Musk -- Co-Founder, Chairman, Chief Executive Officer & Product Architect

Yeah. I mean, it's -- I mean the sound with asking questions of that nature and details, it is a rapidly changing situation. So like literally if you'd ask us in a month it would be different, another month it would be different. There's no question we need to get to a point where we can sell a $35,000 car and where the full account or COGS of the car is let's say, on the order of $30,000 or slightly less than $30,000. Like I think we would want to ideally get COGS of the car of that car under $30,000, that would be -- that's our goal, that's why we're pushing very hard to achieve.

Deepak Ahuja -- Chief Financial Officer

Exactly and it's a matter of time, it's been a significant material cost reduction that comes with smaller battery packs or model service, it's not the same cells that we have in the existing cars, (multiple speakers).

Elon R. Musk -- Co-Founder, Chairman, Chief Executive Officer & Product Architect

And then the non-cell portion of the pack is also reduced. With the current mid-range pack ir still has the -- basically about the same non-cell portion of the cost.

Deepak Ahuja -- Chief Financial Officer

And we are achieving massive reduction in all our manufacturing cost for a car, which will continue and as volume grows that also helps us in the fixed cost itself. And so it's same factors that have helped us so far, will continue to help us going forward to get us there.

Elon R. Musk -- Co-Founder, Chairman, Chief Executive Officer & Product Architect

Anything you want to add JB?

Martin Viecha -- Senior Director of Investor Relations

Great. Let's go to the next question please.

Operator

Thank you. Your next question comes from James Albertine with Consumer Edge.

James Albertine -- Consumer Edge -- Analyst

Great. Good afternoon and thanks for taking the question. Congratulations. I want just a point of clarification, Elon you mentioned in August the time to get the car from factory to a customer was 30 days down to 20 at the end of the quarter, your goal is under 10 by the end 4Q. Where do we see that flow through from a COGS perspective? Is that an automotive gross margin or is that in services and other at this point?

Deepak Ahuja -- Chief Financial Officer

It's all in automotive gross margin, our logistics cost (multiple speakers).

Elon R. Musk -- Co-Founder, Chairman, Chief Executive Officer & Product Architect

Yeah, I think it's in introduction inbound, logistics is one of the airborne logistics. Maybe question like for the debt that is carried for that period of time is that factored into COGS or is that --

Deepak Ahuja -- Chief Financial Officer

The interest expense of that -- that's is in interest expense line, that is not in COGS.

Elon R. Musk -- Co-Founder, Chairman, Chief Executive Officer & Product Architect

Okay. That's like I think the definition of COGS should probably be important to include anything that's directly driven by volume, essentially that affects the marginal cost of the vehicle. So although that is not in -- officially in COGS, in my opinion probably should be, to take the ABL interest expense and by that, that will lead to the cost of car.

Deepak Ahuja -- Chief Financial Officer

And from a broader sense you're looking at it as the cost of doing business, which can be avoided.

Elon R. Musk -- Co-Founder, Chairman, Chief Executive Officer & Product Architect

Yeah, just essentially cash already increases quite dramatically dilution or leverage outside of the ABL line improve slightly. And then -- the effect of car also reduces, because you do not have the interest expense. And if you have interest expense over 20 days versus 10 days, this is a big difference.

James Albertine -- Consumer Edge -- Analyst

Understood, and I appreciate that clarification, sort of just trying to get at even running a negative gross margin in services and other for several quarters now and wanted to get a sense for when that could maybe drop and start to turn a corner and to generate some profit for you, I understand there's a lot of building out going on for sales, service and charging infrastructure. But if you could give us some kind of clarification there that would be I think helpful. And if you're willing maybe to provide an update on where you stand today in terms of battery costs. I know your goal sort of parity with ice vehicles, but maybe an update if you're willing to provide and where you stand in that trajectory? Thanks.

Deepak Ahuja -- Chief Financial Officer

I think over time every quarter impressively we will see an improvement in the service and other business, as our revenue continues to grow. And as the size for fleet grows is as simple as that.

Elon R. Musk -- Co-Founder, Chairman, Chief Executive Officer & Product Architect

Yeah, long-term I'd expect service to be a significant revenue item and to be a positive margin contributor. And it's going to be a function of our fleet size and (multiple speakers), yeah exactly we're under warranty, it is like a lot of surplus on warranty. But as the warranty expires, so there is like non-warranty items then we expect service to positive gross margin.

Deepak Ahuja -- Chief Financial Officer

Yeah, and that also includes our used car sales. And our used car sales has been hitting to go and they have a healthy margin. And so that overall business for matured companies is in some cases more profitable than new products, I'm not just having brought OEMS, auto OEMs. And we are at the early stage of our growth and as our fleet size grows there are just so many opportunities in that business that -- actual time as simply say.

James Albertine -- Consumer Edge -- Analyst

Then on the battery cost and there was a question --

Elon R. Musk -- Co-Founder, Chairman, Chief Executive Officer & Product Architect

That is the key sort of competitive metrics. So I think it's safe to say, we're much better than anyone else, but refer not to give a precise number.

Martin Viecha -- Senior Director of Investor Relations

Okay. And now let's go to the last question please.

Operator

Thank you. Our final question comes from Phil LeBeau with CNBC TV.

Phil LeBeau -- CNBC TV -- Analyst

Thank you, guys. Elon, a quick question in terms of as the federal tax credit starts to be phased out, as your sales crossover the threshold, what kind of an impact have you guys modeled into, how much that might slow down potential sales?

Elon R. Musk -- Co-Founder, Chairman, Chief Executive Officer & Product Architect

We don't expect this to result in -- yes that's the the sales tax or the tax incentive in US grossed in half at the end of this quarter, but then we also start shipping to Europe, and as such to Asia. And we certainly do not expect anything that would cause our productions drop a little let's say a minimum of 5000 cars a week.

Phil LeBeau -- CNBC TV -- Analyst

But in terms of in the United States, do you expect that it will slow down demand and sales within the US?

Elon R. Musk -- Co-Founder, Chairman, Chief Executive Officer & Product Architect

I think that as we are able to offer lower cost versions of the car that we would expect demand to sustain in the US. I want to be clear like that's not like we're holding back this lower cost version of the car intentionally. Just like -- is there anything we can do to provide lower cost car now and that's where we came out with the depopulated long range pack, just like basically taking -- having long range pack with yourselves, like we really care about providing the customer with the most affordable car that we would possibly produce. So that's our ability.

And if we could do this more pack now, we absolutely would, it's just going to take us -- going to -- these three months to get the production going and then you guys fill our production and that production is going to go to -- you are going to make packs, packs is going to vehicle factory, the cars are going to get delivered to customers. So that's why customers probably see the small battery pack on the order of like March or something or February maybe, but something on that order.

Phil LeBeau -- CNBC TV -- Analyst

Okay. Thank you.

Elon R. Musk -- Co-Founder, Chairman, Chief Executive Officer & Product Architect

One thing its due and trying and kind of like maybe points that are worth very mind, as our quarterly letter indicates, the Model 3 is the most efficient energy per mile electric vehicle out there, because it's got the best efficiency. So, we got the best in terms of miles or kilometres per kilowatt hour. And we also have the lowest cost per kilowatt hour. This makes it very difficult for other companies to compete with Tesla because we own the most efficient car and the lowest cost batteries.

So, I do encourage our competitors to really make a huge investment and we've been saying that for a long time. And then -- their only aim is competitive disadvantage because they didn't -- we try to help them as much as we could and they didn't want to take our help, so they can use a lot of patents for free and we're happy they can use our Supercharger network if they can just have an adapter for our connector or something. We want to be as helpful as possible to the rest of the industry, but the fact of the matter is we made the investment in the Gigafactory and other companies didn't. And we put a lot of effort into having extremely efficient cars over having -- having most efficient powertrains and the other companies didn't, but I'm sure they will have a time, but that's what us put us in quite a strong competitive position right now.

Deepak Ahuja -- Chief Financial Officer

Fantastic. I think that's all we have time for today. Sorry, go --

Unidentified Speaker --

I'm just trying to -- in closing, Elon started with it and I wanted to say that from myself personally here. I want to personally thank all the Tesla employees who have worked incredibly hard this quarter and in prior quarters in each and every part of our business. Our results really are the a reflection of the execution done in the company -- by the company and the passion that our employees have to deliver such results despite all our odds. And I also want to thank all our customers and all our investors who believed in us and our product and our vision of accelerating the world's transition to sustain latency. So thank you from my side.

Elon R. Musk -- Co-Founder, Chairman, Chief Executive Officer & Product Architect

(multiple speakers) I mean, anybody have any additional comments or anything? All right, thanks everyone. And, yeah look forward to the next call. Thanks.

Martin Viecha -- Senior Director of Investor Relations

Thank you. Good bye.

Operator

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program. You may all disconnect and have a wonderful day.

Duration: 67 minutes

Call participants:

Martin Viecha -- Senior Director of Investor Relations

Elon R. Musk -- Co-Founder, Chairman, Chief Executive Officer & Product Architect

Madan Gopal -- Principal Safety Engineer

Stuart Bowers -- Vice President of Engineering

Peter Bannon -- Director of Hardware Engineering

Andrej Karpathy -- Director of AI & Autopilot Vision

Unidentified Speaker --

Laurie Shelby -- Vice President, Environment, Health and Safety

Dan Galves -- Wolfe Research -- Analyst

Jeffrey B. Straubel -- Chief Technology Officer

Pierre Ferragu -- New Street Research -- Analyst

Deepak Ahuja -- Chief Financial Officer

Romit Shah -- Nomura Instinet -- Analyst

George Galliers -- Evercore -- Analyst

Maynard Um -- Macquarie -- Analyst

Adam Jonas -- Morgan Stanley -- Analyst

Unidentified Participant -- -- Analyst

Toni Sacconaghi -- Bernstein -- Analyst

James Albertine -- Consumer Edge -- Analyst

Phil LeBeau -- CNBC TV -- Analyst

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