Elon Musk
Chief Executive Officer at Tesla
Thank you. So, to recap, we saw a large adoption acceleration of EVs and then a bit of a hangover as others struggle to make compelling EVs. So there have been quite a few competing electric vehicles that have entered the market, and mostly, they have not done well, but they have discounted their EVs very substantially, which has made it a bit more difficult for Tesla. We don't see this as a long term issue but really as fairly short term. And we still firmly believe that EVs are best for customers and that the world is headed for a fully electrified transport, not just of cars, but also aircraft and boats.
Despite many challenges, the Tesla team did a great job executing, and we did achieve record quarterly revenues. Energy storage deployments reached an all-time high in Q2, leading to record profits for the energy business. And we're investing in many future projects, including AI training and inference, and a great deal of infrastructure to support future products.
We won't get too much into the product roadmap here because that is reserved for product announcement events, but we are on track to deliver a more affordable model in the first half of next year. Really, by far the biggest differentiator for Tesla is autonomy. In addition to that, we have scale economies, and I think we're the most efficient electric vehicle producer in the world. So, while others are pursuing different parts of the AI robotics stack, we are pursuing all of them. This allows for better cost control, more scale, quicker time to market and a superior product, applying not just to autonomous vehicles, but to autonomous humanoid robots like Optimus.
Regarding Full Self Driving and Robotaxi, we've made a lot of progress with Full Self Driving in Q2. And with Version 12.5 beginning rollout, we think customers will experience a step change improvement in how well supervised Full Self Driving works. Version 12.5 has five times the parameters of 12.4, and we'll finally merge the highway and city stacks. So the highway stack is still, at this point, pretty old. So, often, the issues people encounter are on the highway. But with 12.5, we finally merged the two stacks. I still find that most people actually don't know how good the system is, and I would encourage anyone, to understand the system better, to simply try it out and let the car drive you around.
One of the things we're going to be doing just to make sure people actually understand the capabilities of the car is, when delivering a new car and when picking up a car for service, to just show people how to use it and just wrap them around the block. Once people use it at all, they tend to continue using it. So it's very compelling. And then, this, I think, will be a massive demand driver. Even unsupervised Full Self Driving will be a massive demand driver. And as we increase the miles between intervention, it will transition from supervised Full Self Driving to unsupervised Full Self Driving, and we can unlock massive potential in the fleet.
We postponed sort of Robotaxi to -- product unveil by a couple months, where it's shifted to 10/10, so the 10th October, and this is because I wanted to make some important changes that I think would improve the vehicle -- sort of the Robotaxi, the main thing that we're going to show, and we're also going to show off a couple of other things. So moving back -- moving it back a few months allowed us to improve the Robotaxi, as well as add in a couple of other things for the product unveil.
We're also nearing completion of the south expansion of Giga Texas, which will house our largest training cluster to date. This will be an incremental 50,000 H100s, plus 20,000 of our -- hardware for AI5 Tesla AI computer.
With Optimus, Optimus is already performing tasks in our factory, and we expect to have Optimus production Version 1 in limited production starting early next year. This will be for Tesla consumption. It's just better for us to iron out the issues ourselves. But we expect to have several thousand Optimus robots produced and doing useful things by the end of next year in the Tesla factories, and then in 2026, ramping up production quite a bit. And at that point, we'll be providing Optimus robots to outside customers. That will be production Version 2 of Optimus.
For the energy business, this is growing faster than anything else. This is -- we are really demand constraint rather than production constraint. So we're ramping up production in our US factory, as well as building our Megafactory in China. That should roughly double our output, maybe triple, potentially.
So, in conclusion, we're super excited about the progress across the board. We're changing the energy system, how people move around, how people approach the economy. The undertaking is massive, but I think the future is incredibly bright. I really just can't emphasize just the importance of autonomy for the vehicle side and for Optimus.
Although the numbers sound crazy, I think Tesla producing at volume with unsupervised FSD, essentially enabling the fleet to operate like a giant autonomous fleet, and it takes the valuation, I think, to some pretty crazy number ARK Invest thinks on the order of $5 trillion. I think they're probably not wrong, and long term, Optimus, I think achieves a valuation several times that number.
I want to thank the Tesla team for strong execution and looking forward to exciting years ahead.
