Elon Musk's full 2025 Q4 Tesla call remarks with 3 flawless no-touch Tesla self-driving (FSD) rides

Thanks Travis. So we've updated the Tesla mission to amazing abundance. This is intended to send a message of optimism about the future. I think we're most likely headed to an exciting, amazing era of abundance. With the continued growth of AI and robotics, I think we actually are headed to a future of universal high income. Not universal basic income, but universal high income. There's going to be a lot of change along the way, but that is what I see as the most likely outcome. So I think it makes sense to update Tesla's mission to reflect that goal. Along that way, we're going to keep improving safety, driving down the cost of goods, and getting people access to anything they need without compromise. Still making sure that the environment is great, nature is great, and people can have whatever they want, which seems like probably the best future. I'm open to other ideas, but if you could say what is the best future you could possibly imagine, I guess it would be that everyone can have whatever they want, including amazing medical care, and we still keep the beauty of nature and Earth. I think that's probably the best outcome. We're seeing the first steps along that way this year for Tesla, first major steps as we increase vehicle autonomy and begin to produce Optimus robots at scale. We're making very, very big investments. So this is going to be a very big capex year, as Vaibhav will get into. That is deliberate because we're making big investments for an epic future. I think all these investments make a lot of sense. We'll continue to make sure that when we do spend capital, it is spent very efficiently. Major investments in batteries and the entire supply chain for batteries. We're also going to be significant manufacturers of solar cells, and we're making massive investments in AI chips. I think these all make a ton of strategic sense. It's time to basically bring the Model S and X programs to an end with an honorable discharge, because we're really moving into a future that is based on autonomy. If you're interested in buying a Model S next, now would be the time to order it. We expect to wind down S and X production next quarter and basically stop production of Model S next quarter. We'll obviously continue to support the Model S and X programs for as long as people have the vehicles. We're going to take the Model S and X production space in our Fremont factory and convert that into an Optimus factory, with the long-term goal of having a million units a year of Optimus robots in the current S and X space in Fremont. It's slightly sad, but it is time to bring the S and X programs to an end and shift to an autonomous future. As my profile picture on X said for a few months there, the future is autonomous. With respect to full self-driving and robo taxi, people are following with very close attention the progress of FSD. You can experience it for yourself if you've got a Tesla. With every software update, the car gets better and better at autonomy. We were able to do our first rides with no safety monitor in the car in Austin. These were paid rides. I just sort of randomly selected paid rides with no safety monitor. As of maybe yesterday, we don't even have a chase car or anything like that. These are just cars with no people in them and no one's following the car in Austin. We are being very cautious because we want to have no injuries or serious accidents along the way. I think it makes sense to be very cautious, but you'll see the amount of autonomy increase dramatically every month. There will also be an opportunity for existing owners of Teslas to add or subtract their cars to the fleet, kind of like how Airbnb works where you can add or subtract your house to the Airbnb inventory. I think the value of people adding or subtracting their cars to the Tesla autonomous fleet is probably a little underappreciated by a lot of people, because we've got millions of cars with AI4 that can do this. It might provide an opportunity for a lot of customers to earn more by lending their car to the fleet than their lease cost to Tesla. In that scenario, you basically get paid to own a Tesla. It's quite a good scenario. We expect to have fully autonomous vehicles in probably somewhere between a quarter and half of the United States by the end of the year, pending regulatory approval. A big factor would be if there's some kind of federal preemption for autonomous vehicles. In the absence of that, you have to go on a city by city or state by state basis. Even if it is city by city, state by state, we expect to be in dozens of major cities by the end of the year. With respect to energy, the Tesla energy team has done incredible work. The growth rate is continuing to be very strong, and we're building more manufacturing capacity. Energy will have very high growth for as far into the future as we can imagine. The solar opportunity is underestimated. We think the best way to add significant capability to the grid, or powering AI data centers, is solar and batteries on Earth and solar in space. That's why we're going to work towards getting 100 gigawatts a year of solar cell production, integrating across the entire supply chain from raw materials all the way to finished solar panels. Maybe a bit more about Optimus. We'll probably unveil Optimus 3 in a few months. I think it's going to be quite surprising to people. It is an incredibly capable robot. As I mentioned, we are replacing the S and X line in Fremont with a million unit per year line of Optimus. Because it is a completely new supply chain, there's really nothing from the existing supply chain that exists in Optimus. Everything is designed from physics first principles. That means the normal S-curve of manufacturing ramp will be longer for Optimus than for products that have at least some portion of an existing supply chain. When everything's new, the production rate will be proportionate to the least lucky, least confident part of the entire supply chain. If there are 10,000 things that need to go right, it only takes one to lag. It will be a stretched out S-curve. I'm confident that we'll get to a million units a year in Fremont of Optimus 3. This Optimus really will be a general purpose robot that can learn by observing human behavior. You can demonstrate a task, literally verbally describe a task, show it a task, or even show it a video, and it will be able to do that task. It's going to be a very capable robot. I think long-term, Optimus will have a very significant impact on US GDP. It will actually move the needle on US GDP significantly. In conclusion, there are still many who doubt our ambitions for creating amazing abundance, but we're confident it can be done and that we're making the right moves technologically to ensure that it does. Tesla has never been a company to shy away from solving some of the hardest problems. I think that's how you build value in a company, by solving hard problems. I don't know how you create value by solving easy problems. There are a lot of hard problems that the Tesla team is going to solve. It's an incredibly talented, hardworking team. I'd like to thank everyone at Tesla for their incredible hard work. It's an honor to work with such a talented group. Thank you to everyone who is supporting this mission. The future is more exciting than you can imagine.

Just to add to what Lars said, the point that Lars made which is that 90% of miles driven are with one or two occupants is a very important one. That implies that the Cybercab, which is a dedicated two-seater or dedicated robo taxi, is the right approach. It's a little confusing with the terms robo taxi and Cybercab. Sorry about the confusion. In some states we're not allowed to use the word cab or taxi, so it's going to get even more strange. It's going to be like Cyber Vehicle or something, Cyber Car. But the Cybercab, which is a specific vehicle model that we're making, does not have a steering wheel or pedals. There's no fallback mechanism here. This car either drives itself or it does not drive. We expect to start production in April. As always, the production rate is an S-curve. It starts off very slowly and then grows exponentially, then you hit the linear and ultimately your target volume. We would expect over time to make far more Cybercabs than all of our other vehicles combined, given that 90% of distance traveled is with one or two people. I think it's like 80% is just one. Long-term, Cybercab would make several times more Cybercabs per year than all of our other vehicles combined.

Yeah, the vast majority of miles traveled will be autonomous in the future. I would say probably less than 5% of miles driven will be where somebody's actually driving the car themselves. In the future, it may be as low as 1%.

Yeah, the whole design of Cybercab was to optimize the fully considered cost per mile of autonomous driving. It's a different design problem than if you're trying to design cars for people who will be driving versus being driven. Cybercab is super optimized for minimum cost per mile and also for a much higher duty cycle. It would expect Cybercab to be used probably 50 or 60 hours a week instead of the 10 or 11 hours a week that a driven vehicle is used. Typically people might drive their car for an hour and a half a day on average, so about 10 hours per week out of 168. An autonomous vehicle is likely to be used probably five times as often, which means you need to design the vehicle for much more wear and tear per unit time and much more resilience. It's more like a commercial truck, in continuous operation or close to continuous operation. That's how you design an autonomous vehicle. We will have large vehicles in the Cybercab in the future that are designed for full autonomy. We've actually shown pictures of this and have shown prototypes. This is not exactly a secret. We've given people rides in them. We're not keeping this hidden. We're literally saying what we're going to do and have said what we're going to do for a while. The only vehicles that we'll make will be autonomous vehicles, with the exception of the next generation Roadster which we're hoping to debut in April hopefully. It's going to be something out of this world. Fantastic.

Yeah, we will transition the Cybertruck line to just a fully autonomous line. There's obviously a market there for cargo delivery, like localized cargo delivery within a city within a few hundred miles. There's a lot of cargo that needs to move locally within a city, and an autonomous Cybertruck could be very useful for that.

We're still very much at the early stages of Optimus. It's still in the R&D phase. We have had Optimus do some basic tasks in the factory. But as we iterate on new versions of Optimus, we deprecate the old versions. It's not in usage in our factories in a material way. It's more so that the robot can learn. We wouldn't expect to have any kind of significant Optimus production volume until probably the end of this year.

Yeah, it's an awesome robot that minimizes any differences. It basically looks like a human. People could be easily confused that it's a human. This helps our strategy for the AI too because you can learn from how humans do these tasks. It's very easy to teach the robot to do in the same way as opposed to previous robots.

We obviously have cars operating with no one in them and no safety monitor and no follow car or anything like that in Austin right now. For customers, we're being just very cautious with the rollout. With each successive version, as we prove it out, we make sure that there are no sort of unique issues in particular cities. Sometimes you get some very difficult intersection, and it'll be an intersection where a lot of humans have accidents by the way. There are some pretty nutty intersections where a lot of humans make mistakes and have accidents in various cities. We want to make sure that FSD can handle those unusual intersections. If you take LA for example, where Wilshire and Santa Monica combined, there are about 20 traffic lights and people are constantly having accidents there. You want to make sure that FSD can handle unique things in a particular city. We're also just being paranoid about safety. With each successive release of FSD, we will reduce the amount of driver monitoring that's needed proportionate to the safety of the FSD build.

Yeah. This will probably double every month type of thing. It's on an exponential curve.

Yeah.

Well, I tend to spend time on whatever the most critical issue is for the company. Completing the AI5 chip design and having it be a great chip is arguably the number one most critical thing to get done, which is why I'm spending more time on that than currently anything else at Tesla. I've spent pretty much every Saturday on this and a chunk of every Tuesday. If I'm spending my Saturdays on something, it's going to be something pretty important. I do think AI5 will be a very good chip. I feel quite confident about the design at this point. AI6, which will follow that, aspirationally in under a year, will be yet another big leap beyond AI5. I feel pretty good about our chip strategy right now. But in terms of selling it outside of Tesla, we first need to make sure we have enough chips for all of our vehicle production and all of our Optimus production. We will actually use the AI5 chips in our data centers. We already use the AI4 chips in our data center. When we do training, it's a combination of the AI4 chips and NVIDIA hardware primarily. By the end of the decade, things are changing so fast that it's hard to imagine what happens. When I look ahead at what's the limiting factor for Tesla growth, if you go say 3 or 4 years out, I think it actually is chip production. Is there enough AI logic and enough memory, enough RAM for our volume? Right now I see that as the thing that probably limits our growth in 3 or 4 years, which implies that we're not selling chips outside of Tesla because we need them. I think it's going to make sense, and this is definitely going to be sort of a controversial thing, but I think Tesla needs to build a terafab. I mentioned this at the shareholder meeting. When we look at the output of the best case output of all of our key suppliers, and I would say even beyond suppliers are strategic partners like Samsung, TSMC, and Micron, and we say what's the most you could possibly make, then it's not enough. In order to remove the constraint, the probable constraint in 3 or 4 years, we're going to have to build a Tesla terafab, a very big fab that includes logic, memory, and packaging domestically. That's also going to be very important to ensure that we are protected against any geopolitical risks. I think people may be underweighting some of the geopolitical risks that are going to be a major factor in a few years. A lot of people will say that's crazy, fabs are really hard. I'm like, yes, I know fabs are really hard. I don't think they're easy. But we do a lot of hard things. We didn't used to have car factories, battery cell factories, lithium refineries, Megapack factories, or all these other things. We figured it out. If we don't do the Tesla terafab, we're going to be limited by supplier output of chips. I think maybe memory is an even bigger limiter than AI logic. For example, we have chip supply deals with TSMC in Arizona and Samsung in Texas. But currently there are no advanced memory fabs at scale in the United States. They're zero. Literally zero. Hopefully Micron will have something going in a few years because they are headquartered in Idaho, where they make a lot of potato chips, and we need to make computer chips too. We're working with our strategic partners on the chip front, memory and logic. I think we also got to try our hand at building a large scale fab that integrates logic, memory, and packaging. If we don't do that, we're just going to be fundamentally limited by supply chain. Especially if there's a worst case geopolitical situation, it would be quite a severe situation. I think it would be quite frankly crazy not to try the terafab. We'll have a bigger announcement on this in the future.

And we just had a lot of investors ask us to do this. The Tesla shareholders said we should invest in xAI. So we're just doing what shareholders asked us to do pretty much. But Grok will be very helpful in maximizing the efficiency of the management of a large autonomous fleet. If you've got an autonomous fleet that's in the future 10 million vehicles or tens of millions of vehicles, then optimizing the efficient use of that fleet, Grok will be way better than any heuristic solution or manually managed solution. If you're managing a large team of Optimus robots to build a factory or a refinery, say a rare earth refinery which we do desperately need in America, then who is going to organize the Optimus robots to build that refinery? You need an orchestra conductor. Grok would be the orchestra conductor for the Optimus robots to build, hypothetically, a refinery. It might not be hypothetical in the future. I'm just saying it's not currently on our plans, but we do need a lot more refining capacity in the US. So then what's going to manage a thousand Optimus robots?

Well, Tesla AI is very compute efficient and very memory efficient. I think one of the metrics to consider for any given AI model is the intelligence per gigabyte. Especially when you're constrained on RAM, having an AI that has very high intelligence density per gigabyte is key. For a given number of gigabytes, how much functionality can you get out of it? I actually think Tesla is ahead of the rest of the world in intelligence density of AI by an order of magnitude or more. This is going to sound like a pretty bold statement, but I kind of know what the intelligence efficiency of the big models are like Grok and the others. Tesla's AI is more than an order of magnitude better in memory efficiency. That puts us in a pretty good position for scaling. We do have a solution for logic and memory for the next roughly 3 years. But if you start going beyond 3 years and we look at the scaling plans and how many fabs are getting built, especially if you factor in geopolitical uncertainty, there's always risk that those chips don't arrive that people were expecting to arrive. That's why I think we need to have more fab capacity in the US just in case chips don't stop arriving for any reason. This is really existential for Tesla because Optimus is completely useless without an AI chip. At least the cars we can put steering wheels and pedals in or retrofit them if need be. But Optimus is just a mannequin without a chip. It's like the Tin Man from The Wizard of Oz, but even worse. At least the Tin Man could walk. Optimus won't even be able to move. It would just sit there without an AI. We've got a good solution for a significant scale through the next roughly 3 years. Beyond that, we will be supplier limited. We've got to figure out some game plan to not be supplier limited.

Well, I do think that by far the biggest competition for humanoid robots will be from China. China is incredibly good at scaling manufacturing. Actually quite good at AI, as you can see from the open source models that China's distributing for free. They are actually quite good and keep getting better. China's very good at AI, very good at manufacturing, and will definitely be the toughest competition for Tesla. To the best of our knowledge, we don't see any significant competitors outside of China. But China will definitely be tough competition. There's no two ways about it. I always think people outside of China kind of underestimate China. China's next level. We think Optimus will be much more capable than any robot that we are aware of under development in China. We think we'll be ahead in terms of real world intelligence, electromechanical dexterity, especially the hand design which is by far the hardest thing in the robot. There are really three hard things about humanoid robots: building an incredible hand that has the same degrees of freedom and dexterity as a human hand is an incredibly difficult engineering challenge; real world AI; and scaling production. Those are the three hardest problems by far for humanoid robots. I think Tesla is the only company that actually has all three of those components.