On Tuesday, Tesla held its annual shareholder meeting. As expected, none of the controversial shareholder votes passed—there will be no independent CEO replacing Musk, and his brother and the other two candidates were reelected to the board with no drama or fireworks. Even Tesla's chief counsel Todd Maron referred to the opening agenda items as "the boring bits." Things got more interesting once Musk took to the stage for a Q&A session, answering queries submitted in advance via Twitter and then from the audience.

It was an odd performance, often feeling more like a Netflix comedy special than a shareholder meeting. Musk alternated between emotional states, at times rambling or hesitating. He began by stressing that "we're not perfect, but we pour our heart and soul into it... we really care." As expected, the Model 3 and its ongoing production problems dominated the Q&A, but Musk was also asked about Tesla's profitability, battery advances, new Gigafactories, Autopilot, and possible future Tesla vehicles. Musk even acknowledged that he has a problem with timescales—useful context for some of the predictions that we heard.

Model 3

According to Musk, every part of the Model 3 production process has now demonstrated the ability to run at 500 cars/day, or 3,500 cars/week. As a result, Tesla should be profitable by Q3 2018 and generating positive cash flow by Q4 2018, we were told. And employee safety—the topic that caused Musk to start a feud with the press recently—is improving; the injury rate at the factory is now six percent below the industry average. But Musk complained that "it's tougher to achieve when you're building a new manufacturing line" and therefore Tesla's record shouldn't be judged alongside that of the traditional OEMs. He told the audience that Tesla's goal is to be at half the industry average, lamenting that it's impossible to completely eradicate accidents in a factory. Earlier that day, a lengthy investigation into repeated paint shop fires at Tesla was published by The Daily Beast.

Tesla made many mistakes with the Model 3 production line, Musk admitted. He then bizarrely told the crowd that in the end, "Tesla's manufacturing is going to be the thing we're remembered for." After putting a colleague on the spot, Musk then promised news about a Chinese Gigafactory coming sometime in July. A European facility will follow next year, "once we figure out where to put it," he said. Eventually Tesla plans to have between 10 and 12 Gigafactories around the world.

These factories, we heard, will eventually recycle old Teslas to reuse their components and raw materials in new vehicles like some gigantic robotic electric car ouroboros. On Monday, Business Insider revealed that internal Tesla documents show that up to 40 percent of the Gigafactory's output has to be scrapped or reworked. General assembly of the Model 3 remains the rate limiting step to producing 5,000 cars a week. We did learn that there is now a third general assembly line for the Model 3, which Musk says is dramatically better than the first two. Like the F-35 fiasco, books are surely going to be written about the downfalls of concurrent development, using Tesla as a case study.

About that promised $35,000 version—volume production should begin for US cars in Q1 2019. "We would do so right now if it was physically possible," Musk said, contradicting an earlier statement made on Twitter that doing so would be financial suicide for the company. If you're looking for the current configuration of Model 3, the wait is down to between three and four months for US customers. But Musk said it will be about 15 months for anyone who wants a right-hand drive model, as they still need to be approved and then homologated by the various national authorities.

Batteries

Musk said that Tesla should be able to break the $100/kWh barrier for cells later this year. But more improvements to cell chemistry and more vertical integration at the Gigafactory would be needed before getting to $100/kWh for the whole battery pack. Assuming that does eventually happen, the battery would account for just 14 percent of the cost of a $35,000 Model 3 (assuming it will still come with a 50kWh pack).

Musk was bullish about improving energy density as well. Replying to a question from the audience, he said he thinks doubling the amount of power for a given weight of battery would be tricky but said he saw a path to a 30-40 percent improvement. "I'm confident the technology works; it just needs to be scaled up and made reliable," he said, predicting a 30 percent improvement in volumetric energy density in the next three years. Doubling energy density might take between six and eight years and would require creating lithium anodes.

Autopilot

A "significant" upgrade to Autopilot, Tesla's advanced driver assistance system (ADAS) suite is due next week. Musk claimed that improvements to the system would increase exponentially in the next 12-18 months. As for "full self-driving," Musk revealed he "was just testing that last night at 1am." He then went on to say that Tesla might be able to release something in a couple of months. According to Musk, there have been two different approaches to developing autonomous driving; one really complicated path "that isn't working great" and a simple one that is. He added that he was able to go from onramp to offramp with the simple system.

Another question from the audience asked when a "showdown" between lidar and optical sensors for autonomous driving might happen. Again, Musk described lidar as a crutch, saying that it "causes companies to go to a local maximum for autonomous capability." He then went off on a tangent about lidar sensors—apparently everyone else is doing it wrong and should be using a 4mm wavelength.

Musk also said that the company might start offering free trials of Autopilot to Tesla owners beginning next month.

Anything else?

Other tidbits learned from the Q&A hit on other topics. Those Tesla solar roof tiles are still being tested—Musk had them installed on Gene Wilder's old house, which he bought. But he told the audience that "there's only so much accelerated life testing you can do on a roof" and that Tesla needed to know that they would last at least 30 years, preferably 50. Sales of the solar tiles will grow exponentially, he said.

A frequent criticism on Tesla message boards has been the issue of repairs. High collision costs are driving up insurance rates for Teslas, and the downside to having no dealer network has been a lengthy wait for repairs at Tesla's service centers. New authorized body shop repair locations are being set up in the top 10 metropolitan areas in the US, and Musk even promised the shops would be able to do same-day body repairs. That's a bold claim considering how many sensors are packed behind the body panels of a Tesla—these have to be physically recalibrated after accident damage in order to work, and that is a time-consuming process.

Finally, if you were holding out hope that Tesla would enter the electric motorcycle market, it's time to go look at Zero instead. In his youth he rode a dirt bike, Musk revealed, but was nearly killed by a truck while riding, so Tesla will never make a two-wheeler. However, answering another audience member, he did predict the company would enter the compact EV market "in less than five years."