Tesla Roadster makes its debut! Can this week's earnings report provide another boost?
特斯拉2026Q3业绩直播
Key Takeaways (AI-Generated)
Financial Performance
- Record Q3 deliveries of 480K; automotive gross margin rose to 18.1%, energy storage margin jumped to 33.1%.
- Positive free cash flow exceeded $1.5 billion; total cash and investments surpassed $45 billion.
- Net income impacted by $142 million SpaceX mark-to-market loss, offset by ~$290 million Bitcoin gain.
- Services and other margins reached an all-time high of 15.9%, up from 14.1% in the prior quarter.
Business Highlights
- FSD adoption strong: 75% North American delivery attach rate; global paid customers exceed 1.7 million.
- Robotaxi expansion: Austin fleet grew 10x; unsupervised miles scaled 8x; launching in Dallas next month.
- Optimus robot early production started at Fremont; external deliveries expected end of next year.
- Energy storage Megapack deployments hit 13.7 GWh; Tesla Semi production began; new Roadster demo completed.
Financial Guidance
- CapEx guidance revised to approximately $20 billion for current year, funded primarily from operating cash flows.
- Long-term goal: Produce 5 million vehicles per year by approximately 2030.
- Operating expenses will increase sequentially due to R&D in AI, chips, and pre-production ramps.
- Robotaxi profitability impact expected noticeable in Q2 next year; significant by Q3/Q4 next year.
Opportunities
- Potential EU-wide FSD approval within months could significantly expand market reach and revenue streams.
- Scaling Robotaxi services to new cities and increasing manufacturing capacity in Berlin and Reno.
- Vertical integration via Terafab aims to address semiconductor bottlenecks and secure long-term supply chain control.
- Introduction of in-house LFP batteries for energy storage enhances product competitiveness and margin potential.
Risks
- Regulatory delays in Europe and China for FSD approval; hurdles for Robotaxi expansion outside Texas.
- Supply chain complexities for new products like Optimus require building a global supply network.
- Commodity price increases and interest rate changes add to costs, creating financial headwinds.
- Competitors attempting to replicate FSD success, though management believes their lead remains insurmountable.
Full Transcript (AI-Generated)
Operator
Good afternoon, everyone, and welcome to Tesla's third quarter 2026 Q&A webcast. My name is Travis Axelrod, Head of Investor Relations, and I'm joined today by Elon Musk, Vaibhav Taneja, and a number of other executives. Our Q3 results were announced at about 3:00 PM Central Time in the update deck 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 of today's call, please limit yourself to one question and one follow up. Please use the raise hand button to join the question queue. Before we jump into Q&A, Elon has some opening remarks. Elon, thank you.
Elon Musk
So the third quarter was very strong and I'd like to give a big congratulations to the whole Tesla team for working hard to make it happen. Demand is growing rapidly for our vehicles. It's exceeding our production by a significant margin. And obviously we're going to be ramping and we are ramping production meaningfully. The biggest driver for demand is full self driving. And today there's really no competitor for FSD in any car that you can buy. And to be clear, we're producing and delivering as many cars as we can and we're pushing very hard for FSD approval in additional markets.
We're now approved in many countries in Europe and we're hoping for an EU wide approval. It's hard to predict, but maybe within a few months, but I would be surprised if it takes longer than Q1. But obviously that's not a timeframe we control, but we do anticipate being fully approved throughout Europe and many other countries. We also began production of the Tesla Semi truck in Q3 and did the new Roadster demo, which was I think one of the most exciting events, arguably the coolest demo of any product ever. And that's a testament to amazing work by the Tesla and SpaceX teams.
So we've also been laying the groundwork for a lot more manufacturing capacity. We're aiming for 5 million vehicles a year by approximately 2030. And that's, I think we've got a good shot of achieving that goal. And yeah, so energy demand is very strong. We're actually almost sold out of all Megapacks for 2027 and we're ramping production as quickly as possible to meet demand. We also expect gross margins on that to increase meaningfully. So in a nutshell, after many years of sort of grind and things being fairly flat, I think we're now headed for a lot of fun and significant growth.
Regarding robotaxi, we're seeing the robotaxi miles driven or fully autonomous miles driven scale exponentially, meaning scaling very rapidly. And it would be hard to overstate at this point. It really is an extremely fast week over week growth in autonomous miles. And I don't think there's any company in the world that can match our scale with autonomous vehicles as we continue to ramp. The Cyber Cab fleet in Austin, for example, has grown by a factor of 10 since launch about a month ago. And the cumulative mileage is really when I look at the weekly chart, it's wow. I mean, it looks like a rocket going into orbit basically. It's growing very fast.
And if you want to try it out, coming to Austin and you'll see Cyber Cabs in use at scale in Austin, as I think a lot of people saw with the Austin city limits concert recently. So this is really going to go to a very good place. And regarding Optimus, we've started what I'd call early production on a high volume line in Fremont. Now I want to elaborate on this point because I've said this before that the growth of Optimus is an S curve, but the initial part of the S curve is a shallow slope and is somewhat bumpy because it is such a radically new product.
So the way to think about it is there's like 10,000 things that have to go right for production of the robot and it'll move as fast as the slowest, least lucky of the 10,000. But we do have the vast majority of a million unit per line production line landed in Fremont right now. But I would expect that it takes us probably at least a year, maybe a little longer to get to that annualized rate to get to 20,000 units a week. So this is just fundamentally because there's still parts of the design that are changing. Like a lot of people ask me about Optimus. That's why I think I've got to kind of belabor this point because if people don't sort of understand new technology that well or volume production of complex new hardware that well, it sort of seems like, well, can't you just make a whole bunch of these things immediately and send them out?
And that's like, no, you've got to basically build up an entire gigantic global supply chain and have domestically a very big factory and everything's got to work. And there's still some things we need to tweak about the design because you need to deliver a robot that is safe and reliable and has long duration, so it can't wear out after a month. And there's still quite a lot of work to do with regard to the AI and the robot for it to be truly useful for open-ended tasks. But as I said, I do expect these issues to be solved around the end of next year. So that's the time to expect when we're delivering Optimus to companies outside of Tesla.
And I remain convinced that Optimus will be the biggest product on Earth and humanoid robots in general will be the biggest product on Earth. So it's a very big deal, but I don't want to temper expectations that we still have a lot to get through and it's about a year or so that'll take us to get through all that stuff. But as to the best of my knowledge, there is no one that is even close to Tesla with respect to a general purpose humanoid robot. Regarding the Terafab, the awesome Austin based research fab is progressing quickly. We'll begin commissioning machinery in the first half of next year and hopefully things go well. We'll make our first test chip just to see if we can make any chip at all around May or June. So that's pretty exciting.
And then our aspiration is to be making some kind of useful chip at volume around Q3 of 2028. And as I said publicly on X, the Terafab will be the most valuable building in the world and we'll probably have an economic value that will place it in the top 20 of countries. So it's an epic project and this will be an incredibly important asset, if not a necessary asset in order to scale, especially Optimus, as we can address bottlenecks in semiconductors, whether it's memory, packaging, logic or whatever the case may be. With regard to a potential merger with SpaceX, I think I said everything that should be said yesterday, tap dancing through minefield there. And yeah, that's it. In conclusion, we're super excited about our autonomy and robotics road map. There's a lot of incredibly awesome stuff coming. And I'd like to once again thank the Tesla team for their strong execution and all of our supporters for joining us on this journey.
Travis Axelrod
Great, thanks very much, Elon. And Vaibhav has opening remarks as well. Vaibhav.
Vaibhav Taneja
Thanks, Travis. We continued our progress on a lot of fronts in Q3. Elon already covered a lot of them. Additionally, which I'd like to add is we also started deliveries of Megapacks with our in house LFP batteries and for the first time 2 consecutive quarters of vehicle deliveries of 480K. On the automotive business, we exited the quarter with our highest backlog in four years with deliveries constrained primarily by production. We're therefore focused on increasing production at all our factories to meet this growing demand. While we are actively working to increase production, it does take some time to get every aspect dialled in from supply chain to manufacturing to delivery logistics.
The Model Y continued to outperform in the quarter and set delivery records in several key markets. Based on the preliminary data which we've gathered, we believe that it was the number one selling BEV in Europe and the number one selling passenger car in South Korea. We also set new records in key markets including Australia, Japan and Taiwan. As Elon said, FSD continues to be the key driver for demand in Q3. 75% of deliveries in North America included a sign up for paid FSD subscription at the time of delivery, which is approximately 20% higher than Q2. Overall, the FSD attached rate continued to improve reaching over 1.7 million paid customers globally, of which for the first time 50% is based on subscriptions.
Given the strength of FSD in the US, we are taking extra steps to sell certain cars in Europe with some benefits to try and get more feet out there before broader FSD approval is obtained. On automotive margins excluding credits increased sequentially from 16.3% to 18.1%. Improvement in margins is driven by a higher mix of deliveries in APAC, while commodity price increases and interest rate changes continue to add to our cost and create further headwinds. We've adjusted the vehicle financing programs to partially offset for such costs. On the energy business, you know we had a second best quarter of deployments of 13.7 GWh of energy storage. Energy gross margins improved from 20.4% to 33.1%.
The sequential margin improvement is primarily attributed to tariff free funds recognized in the quarter and warranty true downs resulting from alignment with the vendor on certain cell related costs to be reimbursed by them. As Elon said, the business is witnessing extreme demand from data centers and we are doing our best to increase production and accordingly we'll see improvements in ASP and further improvements in margins as we move forward. Services and other margins improved sequentially from 14.1% to 15.9%, an all time high. This was the result of strength across service across several of the businesses and services in other including supercharging and insurance. The Robotaxi business, which is part of services in others continued to grow with the launch of Cyber Cab rides in Austin. Accumulative unsupervised miles 8X in the quarter as we had weekly double digit growth throughout the quarter.
We're taking all the learnings from our Austin expansion to help us prepare for broader cyber cab launch in other markets. Our priority is progressing the density and expansion of the network through vehicles that provide the best experience like the Cyber Cab. We'll also continue to augment the fleet with other variants over time to address the terrestrial transportation needs for the total population. I like to stress that what we are trying to do is literally take over every part of terrestrial transportation, not just getting people from one place to the other, but we want to basically own this transportation of any kind on Earth. We are in a huge investment cycle to set us up for the future. Therefore, as previously guided operating expenses continue to increase sequentially. Most of the increase came from significant research and development related activities including AI development costs such as depreciation from additional compute, chip development and pre production ramp costs for new products like the Optimus, Megapack 3 and Semi.
This trend of growing OpEx would continue till we commercialize these new products. Net income was impacted from a mark to market reduction of our SpaceX holding of $142 million, which was offset by a Bitcoin mark to market gain of approximately $290 million. We continued our efforts to manage cash efficiently and responsibly. We ended the quarter with positive free cash flow of over $1.5 billion and an overall cash and investment balance of over $45 billion. We're revising our CapEx guidance to be approximately $20 billion for the current year as a result of managing our capital deployment efficiently and plan to fund it primarily from our cash flows from operations. Additionally during the quarter we secured capacity to borrow up to $30 billion to support the expected growth in CapEx. Our confidence in the cash generation capacity of our business and the investments we are making drive our belief to secure shorter term financing. We don't plan to make any draws under any of the new facilities in this calendar year.
The money that we received from the tariff refunds is being reinvested to expand production capacity in the US. I like to stress on this that we like to do a lot of hardcore real grunt work to get production facilities up and running. And so our CapEx for the next few years would continue to expand as we add more robotaxi fleet, we expand our production capacity for Optimus, install manufacturing capacity for solar, purchase additional AI compute infrastructure and build a semiconductor fab. This strategy will position the company for the next era of growth and disrupt many existing markets while creating new ones. This is by far the most exciting time to be at Tesla. The foundation being laid around autonomy, robotics and energy is setting us up for an extremely bright future. I would like to end by thanking the Tesla team, our customers, investors and suppliers for the confidence in us on this journey.
Travis Axelrod
Fantastic. Thank you, Vaibhav. Now we're going to questions from say.com. The first question is how does the Cyber Cab fleet scale past Austin and what's the regulatory path outside Texas given it's an open safe review? Ashok, did you want to take that?
Ashok Elluswamy
Yeah, I'll start here. First of all, we launched Cyber Cab this quarter, which is very exciting. We achieved that by mostly learning from data from the other vehicle platforms, for example, Model Y, Model 3, etc. All of the data helped make the Cyber Cab without requiring a ridiculous amount of vehicles to produce the data. So we are seeing very good scaling in terms of Cyber Cab capabilities. We launched in Austin, but that's only because we had some caps and we want to swarm Austin with Cyber Cabs everywhere. But there's no fundamental reason that we are limited to Austin. In fact next month we'll be launching in Dallas and then the same software just scaled to lots of other cities along with the Model Y robotaxis.
Travis Axelrod
Great, thanks very much. The next question is what are your thoughts on crowdsourcing training data for Optimus versus your internal Optimus Academy approach? Is data currently the primary bottleneck? I think you covered this quite a bit, but any other color there?
Elon Musk
Mostly talked about this already, but it's not crowdsourcing is not the issue for Optimus. There's a lot of things we have to get right about the AI architecture that we're still working on. We're making good progress, but that needs to be sorted out. And really in order for Optimus to get the training data we need, we actually need to make a lot of Optimus. So we need to make, I think on the order of 10 or 20,000 bots and then have them do self play. And we're building up an Optimus Academy where Optimus can practice doing a very wide range of tasks. And then we can use that data in sort of a flywheel to make it better and better at these various tasks. The big difference with Optimus versus the cars is we don't have this fast fleet of cars from which we can gather training data. So with Optimus, we have to bootstrap it by making the robots and having them do self play, which is really how a human learns to navigate the world. You know, it's that you can see this when you have a toddler and they grow up and they initially are sort of wobbly and they don't know how to do things. And eventually they learn to wipe their own ass, which is a big milestone. Does anyone have kids? And then they learn to read and do all sorts of things and be able to do these things and they learn this by playing. And we actually need Optimus to play at scale in order to have it be really good at tasks in the real world.
Ashok Elluswamy
And Ashok, you may want to add to that. Yeah, like I mentioned Elon, for the car, we actually have the data from the car's embodiment itself. But for Optimus, there's no exact threat and for humans to get into and like make Optimus into a puppet or something like that, like we have to learn. Optimus has to learn by watching other people do tasks initially and then start practicing the task yourself. For example, if you're watching a soccer game, just because you're watching it doesn't mean you'll be good at soccer yourself. You've got to start practicing and get good at the game and learn from the bot's own experience. And we are setting up this huge reinforcement learning cycle with initial base training done from humans to bootstrap and then put it on Optimus and do a lot of self play both in simulation and in the real world to learn on the embodiment of Optimus itself. I think we're pretty close to having very good results in this big loop.
Elon Musk
Yeah, I think we may be ready to release like an Optimus video in a month or so. I want to make sure that like when we release this video, that it's not like a canned demo that you know, like when you see this humanoid robot demonstrations, some of them look very impressive, but they're not really using any kind of advanced AI or SI. I mean, they're like pre programmed deterministic tasks. And if you actually try to use that humanoid robot in the real world, you would have a lot of trouble. It wouldn't work basically. So I want to release a video that's where it's Optimus doing things that are not pre programmed. And I think that would be, it's maybe a month or two for that to have a demo that you can believe what you see type of thing. And then there's another milestone that's I think important we want to get to, which is to integrate our Tesla AI5 chip into Optimus, which if things go according to plan, we'll be in approximately April of next year. And that's a giant improvement in capability with an order of magnitude more operations per second, like it's an order of magnitude more compute AI 5 versus AI4. And that will help Optimus a lot because the degrees of freedom that a humanoid robot has to deal with are far greater than what a car has to deal with. So it is a bit of a struggle to squeeze everything needed to operate with all the degrees of freedom of Optimus and the wide range of tasks. You know, if you think of like a humanoid robot is going to do like 1000 times more things than a car would do, that's some very big number basically. So I think the additional compute of AI5 will make a big difference and that comes in hopefully in volume around April of next year. And that's why I think like all the pieces like the refinements in electromechanical dexterity, making sure Optimus can operate for long periods of time without wearing out, getting the AI software right and the AI5 chip integrated, all of these things kind of come together. That's why I think about a year from now is when it's something that you could ship to customers and it would also be reaching scale in production. So that's probably the right timing to think about. And in terms of the initial customers for Optimus, I think it probably would be things that are industrial applications at first, things that are like dangerous repetitive tasks, things that people really don't want to do so and that you want done basically 24/7. So like around the clock stuff that's going to be the highest value for Optimus in the beginning. As we scale production, of course, it would be something that people can buy for their home. But the initial high values will be the highest values I think will be kind of heavy industry dangerous tasks or things that may cause repetitive stress injuries and that you want done 24/7. So that's the way to think about it.
Travis Axelrod
Great, thank you guys. The next question is very similar. It's about Optimus scaling. So we can go past that one basically. And the next question is when can we anticipate FSD unsupervised and customer cars? Ashok, did you want to kick that off?
Ashok Elluswamy
Yeah, like I mentioned earlier, the software for Cyber Cabs and Model Ys is the same. And pretty soon we'll be able to release the same software as part of the V15 release to customers. So the only additional requirement is to make sure that for example, the customer Model Ys can be part of the geofences and the fleet management that Tesla has for it to be fully autonomous. We suspect somewhere around Q2 next year is when we can turn on some of the first customer vehicles to be part of the robotaxi fleet.
Travis Axelrod
Great, thank you. Ashok, the next question is when will the Cyber Cab be available for customer purchase slash ownership? Lars, did you want to kick this one off?
Lars Moravy
Sure. Thanks, Travis. I think it builds a little bit on that Ashok just said. But in short, we're trying to get Cyber Cabs to customers by the end of this year, 2026. Obviously we're producing an airline in Texas, but all of those are currently going to our own internal robotaxi fleet. And as Tesla grows, we'll mainly deliver fully designed autonomous vehicles to our customers and Cyber Cab will be the first. And so as we start small this year and we learned about all the things Ashok mentioned about delivery and ownership and fleet management of autonomous vehicles in customer hands, we'll continue to scale that.
Elon Musk
You know, I don't know if there's anything you want to add to that. No, I mean Cyber Cab is primarily going to be something that is offered as like transport as a service, whereas our other cars would be more, you know, the cars that you'd want to own, like the 3 and the Y and whatnot and Roadsters obviously, but the vast majority of the Cyber Cab stuff will be essentially Tesla owned and transported as a service.
Travis Axelrod
Great, thanks guys. The next two questions are quite similar around unit economic costs. The first one is on per paid robotaxi mile and the second one is cost per Optimus unit and we already covered the one of the first customer paying customer looks like. So BT did you want to get into the unit economics question here?
Vaibhav Taneja
Yeah. So on the robotaxi side, you know the main geographies where we are operating, we're already seeing utilization improving and week by week as Elon was talking about, we look at the miles and how many paid rides are happening. So are we at our goal of $0.30 today? No. But do we see a path to get to that? Very yes, we do. And it's all about scaling operations. And what you'll see over the next few months is that today Cyber Cab, which is the primary robotaxi product is available only in Austin, but we do plan to bring it out in some other cities before the end of this year. And as we add more Cyber Cabs, we're also learning from the operational experience of managing a fleet pick up and drop off, cleaning all those things. So all those costs are being dialled in and that's why like I said before, we definitely see a path to get to our 30 cent target. And then did you want to cover the Optimus costs?
Lars Moravy
Yeah, I mean, I think Optimus cost internally we are tracking pretty well in terms of how the design has matured, but it would be a little too early to say that we have got there because like Elon was saying, we're still making a lot of design iterations. The good thing is, you know, when you look at it from a cost perspective, we're trending closer to where we would say our Cyber Cab costs would end up being.
Travis Axelrod
Yeah, great. Thank you very much for love. The next question is when do you anticipate Optimus will be generating revenue? So we covered that in a prior question. The next one is mapping for FSD continues to be a problem. The three biggest issues are recognizing proper speed limits, parking and typical routes. I understand you use various third party maps, but why not use your own maps, authorized, trusted or verified Tesla owners to provide the input? Ashok, did you want to kick off here?
Ashok Elluswamy
Yep. Yeah, you're totally right that we shouldn't be depending on external people's maps. So we are building our own maps, but not like the same way as Google Maps. We are building entirely new architecture with essentially vision-based mapping and navigation. It's going to be super awesome. It's going to be integrated with voice. You can talk to it, ask for different routes. It's going to learn your personalized preferences plus also the collective intelligence of all the cars are going to flow into making the maps and navigation be super cool. We'll start you'll see the start and end of trips already use this technology pretty soon as part of the V15 release. And over the next several months, it's just going to take over all of the navigation functions, parking, destination handling and just we'll know you better than you know yourself in some regard for the driving task and handle it fully.
Travis Axelrod
Great, thank you, Ashok. And then our last question is what is the current production rate at your existing factories? Do you anticipate building new ones? Lars, do you want to kick that off?
Lars Moravy
Yeah, sure. I think Vaibhav kind of touched a little bit on this in his opening remarks. And I'll say our factories are operating at record rates on this quarter and of course they can only build at the rate of the least lucky process component. And Bob mentioned that we are actively managing all the aspects of production. You know, as we've spoken in our past calls, we've made strategic investments globally to increase rates of our current factories over the last year plus. And this quarter we are starting to see that and we expect that to continue in coming quarters as those investments come to fruition. I mean beyond that, we've also are working to ramp Cyber Cab obviously in Giga Texas and we applied for proper permits to expand the factories in Berlin. And as also Elon mentioned, we just started our new Semi factory in Reno. So in short, we are building these factories, yes, and we're aiming to hit that 5 million goal by 2030 as Elon said.
Travis Axelrod
Great, thank you very much. That's it for thesay.com questions. Now we will be going to analyst questions. As a reminder, as Elon said, we will not be addressing any questions today on a potential merger with SpaceX. With that, the first question comes from Tom from RBC. Tom, please unmute yourself when you're ready.
Tom Narayan
Yeah, thanks for taking the question. It's on FSD. So the attach rate, I think according to my math is like 30 to 40% North America on a paid basis. It's becoming a flywheel as he said, for more car sales and the attach rate exceeds other automakers subscription based autonomy by a lot. I guess in a weird way, could you guys be a victim of your own success and seeing other car makers noting the success and trying to aggressively come up with similar L2 plus type products, maybe partnering with NVIDIA or Qualcomm? And if that happens, could that be deflationary for FSD pricing?
Elon Musk
I think people take this thing very simply that, you know, you can solve if the software getting be solved. It's there. It's not because, I mean, I'll let Ashok get into it, but basically it's a very hard problem. It's a super hard problem. Yeah. It's easy to get to the first 90% and make like a cool looking demo, but when you get in the long tail of this problem, it's so long that people don't realize. Anyone with their senses should not attempt to solve this problem. It's so difficult and so long tailed and especially to get to a safety point where you can drive safely for millions of miles with no injuries and so on, that's going to be extremely hard. As we release unsupervised FSD to the product customer fleet is just going to be I don't think anyone can match it in several years. And one other thing which I'll say if it wasn't clear that you know when especially in our showrooms here in the US, customers are now coming in and saying can we get into an FSD drive. They're not asking for 3 Y or Cybertruck, they're saying, can we get an FSD drive. And that has become the key driver because what it does is it actually opens up a lot more flexibility for different parts of the population wherein they had issues driving conveniently before. Now they're getting their freedom back by being able to use FSD. And a lot of folks are just like, I mean, it's a game changer. I mean if you haven't tried it, I keep saying it every time. If you do it, you won't be able to go back to driving any other car.
Tom Narayan
Do you have the follow up? Yeah, follow up is similar to that question on China. I mean there it seems like autonomy is like table stakes. Is it the same kind of answer on this question, one that you know, they're not going to be able to those car makers aren't going to be able to develop a similar product that you guys have had on FSD or do you see there that being definitely a different pricing dynamic?
Elon Musk
I mean, at the beginning definitely the leapfrog which we have in terms of this technology isn't there with any of the other Chinese OEMs today. And you know, we're working very diligently to try and get broader FSD approval in China, it is hard, but for certain cars, we've been able to have FSD operating and whatever people have tried whoever has tried it there, they understand how much better it is as compared to any of the competition. In fact, I don't know if you've seen this, there have been some competitor CEOs who have come and done FSD drives here in the US and they themselves have been blown away as to what FSD is capable of doing. So it is a similar answer. And again, we're not taking it lightly. We're actively working with the regulators in China because I don't know if you saw this, but we did release our we've released our safety report on FSD before, but we've also released our unsupervised or robotaxi safety report. We just think this is the right way to get people into a safe environment because you know, the amount of accidents which happened because of driver that was not being alert. And this is the only way we can ensure that there are less casualties in the world. And any regulator who looks at the data, it would be very hard for them to refute it.
Travis Axelrod
Great, thanks so much. Our next question comes from Emmanuel from Wolf. Emmanuel, please unmute yourself.
Emmanuel Rosner
Great, thank you. Hi, team. So on Robotaxi, you've talked about sustaining double digit week over week growth in unsupervised miles. I'm curious if there's a way you can triangulate that for us into revenue and maybe profitability of the robotaxi business. If you sustain let's say 15% week over week growth in these miles, you'll probably cross 10 million miles by the end of the year. You know, how many miles would you need to generate gross profit?
Vaibhav Taneja
I mean, so I think Elon talked about this a little bit at the beginning that, you know, using exponential math, this would become a significant part of our revenue and profitability in 27. Yeah, I would say it's like it's not going to move the needle this quarter, but yes. But if you say like maybe I think it starts to become noticeable probably in Q2 and then probably a big deal by Q3 or Q4 of next year.
Emmanuel Rosner
Exactly. Got it. And then if I think about it in terms of fleet size, so I think your Cyber Cab line capacity is listed at more than 125,000 units a year. Production just recently started. How do you expect the ramp up curve to be on the Cyber Cab line?
Vaibhav Taneja
I mean, I'll kick it off, but then I'll also let's last time in. But you know, I would give kudos to the engineering team. They have designed a product because not only do I talk to the engineers, I also talk to the manufacturing guys. They think this is one of the easiest product for them to scale in terms of manufacturing. So scaling would not be that much of a challenge. I think the key thing which we're trying to make sure is that we have all the regulatory approvals where we can start deploying the Cyber Cabs as fast as we can produce them. And again, Lars, feel free to chime in.
Lars Moravy
Yeah, thanks, Saibal. Appreciate the accolades. The team definitely crushed it on the Cyber Cab design, manufacturing, just to be your point, we have 50% less parts than any other vehicle we've ever built. So that's 50% less things to go wrong. We've definitely been bursting in Cyber Cab line to see how fast we can run it. I think the list of capacity is more of a rate that which we're capable of running today, but the actual capacity that people significant vehicle line is significantly higher right now. We're building at the rate that the robotaxi service needs the vehicles and you know, I'll say Ashok and I are in a bit of a race. So who's going to stay ahead? He's got exponential growth coming on the miles, month over month and we're going to look to meet that as well with the vehicle production.
Travis Axelrod
Great, thanks, guys. The next question is going to come from Andrew from Morgan Stanley. Andrew, please unmute yourself.
Andrew Percoco
Great. Thanks so much for taking the question. So I want to start on your energy business. You know, you're clearly seeing a lot of demand on the energy storage or Megapack side and you've got some goals to bring on your own solar manufacturing. But I was just hoping to get a little bit more insight in terms of how you're thinking about Tesla's role in enabling both distributed power but also distributed compute. I think last quarter you alluded to a Mega Pod product. So just hoping to get a little bit more insight in terms of what you're envisioning there and ultimately how big this could be for Tesla.
Vaibhav Taneja
I think it's still early days on that front. We don't know the full extent of how what that'll unfold. I think we'll have a better sense for that probably in Q1 or Q2, but it does have a lot of potential. It's just hard to say how much potential right now.
Andrew Percoco
OK, understood. And then maybe just a follow up on Robotaxi, yeah, it does seem like you've kind of hit an inflection point here in Austin over the last month or so since you launched the Cyber Cab. So would you generally say that the bottlenecks at this point to growth are more regulatory driven as you think about expanding into new geographies and that you've kind of gotten through most of the hurdles on the software side? Just kind of curious how you would generally categorize some of those growth hurdles in some of the incremental regions you're planning on scaling into over the next few months?
Vaibhav Taneja
I think the, I mean there are still certain software challenges which we are still working through, you know, Ashok talked about it. So maybe Ashok maybe take a stab.
Ashok Elluswamy
Yeah, for example, we are like initially at the Robotaxi service from 6:00 AM to 9:00 PM and then we expanded 10 PM, 11:00 PM now it's going to be pretty soon 2:00 AM. So we're slowly expanding the availability of Robotaxi and that is driven by the capability of the AI software. And we just want to make sure that there's not a single safety incident that is our operating principle. And even if there's the slightest possible risk at all, we don't take on that risk. And so we are very risk averse in that sense as in we want 0 injuries or anything bad happening. And that is the driving principle. And we will see that over the rest of this year. We'll unlock 24x7 operation, go to higher speed roads. And we think all of that is necessary to sort of scale and offer a great product to a lot of users. And that's why we wanted to both do the breadth first of doing multiple cities. We did 6, we do 6 cities now. We are also doing the depth of like having a lot of vehicles in a single city, which is in Austin. And we'll expand to more weather conditions, day and night conditions, highways and high speeds. And all of that will be done hopefully by the end of this year, at which point you will see a lot more scaling, lot more cities being covered by robotaxi. So it's not purely regulatory or something like that. It is technology driven, but we do see that that pretty quickly become regulatory perhaps in like Q1 Q2 timeframes.
Travis Axelrod
Great. Thanks guys. The next question is going to come from Edison from Deutsche Bank. Edison, please unmute yourself.
Edison Yu
Great. Thank you for taking our questions. First want to ask about Terafab. I know Elon, you mentioned that you had an aspirational goal of Q3 28. Do you have a sense on how much capital needs to be invested to get there and also what kind of milestones we should be on the lookout for on the way there?
Elon Musk
Well, it's going to be some pretty significant capital. You know what it's certainly in the 10s of billions for Terafab. Well, we've got to figure out like what the sort of relative split is between SpaceX and Tesla in terms of who pays for what at Terafab. But it's not going to be less than 10s of billions in capital equipment, up through early 2028. And then it will be a lot more. It'll probably be north of 100 billion long term.
Vaibhav Taneja
Yeah. And I'll just add, you know, the first set of equipment for the fab which Tesla is building, we've actually already placed most of the orders. And that's why when Elon was talking about middle of next year, that is from the first fab, which the research fab. Research fab, yeah, that's what we're just figuring out how to work the equipment type of thing.
Elon Musk
Yeah. But real production would be late 28, which is lightning fast by fab standards.
Edison Yu
Understood. That's it. And then just a quick follow up on Optimus. I know you mentioned that we could see a video soon that there's quite a bit of progress, but you're still making some refinements. I guess just generally speaking, where do you see most of the design changes still happening going forward? Is it still the hand that's an issue? Anything you can call out there?
Elon Musk
Yeah, it's mostly difficulty. I mean, I can't see us, but why don't you ask this question? So Handy's one of the most challenging hardware areas. Actually most of the electromechanical system I would say is relatively high confidence, meaning like that it's converted to something that works decently well. The hand is from an electromechanical point of view more complicated than actuators for the locomotion system, for example. Also there are some bespoke gears that are carrying a lot of burden for consumption and for reliability that we are developing still.
Lars Moravy
Yeah, this would be the most yeah, it's mostly the hand and just the fine tuning of the hand design and the fingers especially just it's a hard problem because, you know, humans have self repair like our hands repair, our body repairs itself, but robots don't. So you have to and our fingers are kind of squishy and have lots of sensors in our skin. It's hard to make a hand that can handle lots of wear and tear, but it's still squishy enough to pick up delicate objects and has all the sensors and doesn't damage the sensors when you do repeated actions. And there's a lot of little things that you realize actually what an incredible thing the human hand is at the end of the day. So it's mostly from an electromechanical standpoint. The hands there are other things that are improving as well throughout the robot, but that's the main thing. And then as I mentioned, upgrading the intelligence of the onboard intelligence of the robot with AI5, which is a big step change in intelligence that will help a lot with the capabilities of Optimus.
Elon Musk
So, you know, I've said before that humanoid robots biggest product on Earth and but it's and its usefulness will be, you know, it's a rough approximation, a multiple of the electromechanical dexterity, the AI software and the AI chip hardware. And all three of those things are improving exponentially. And I think we use that word a lot, but the value is roughly those three things multiplied by each other. And then the Optimus robots will build the future Optimus robot. So you have a recursive function. So when you have a recursive multiplicative exponential, things will really grow extremely fast. They may start from a small base, but they're going to grow to crazy levels. And I think at some point there will be more humanoid robots on Earth than there are humans.
Travis Axelrod
Great, thanks so much. The next question comes from Alex from Bank of America. Alex, please unmute yourself.
Alex Potter
Hi, thanks for taking our questions here. I guess just first on Robotaxi. So it looks like for robotaxi you're pricing lower than competitor rideshare and other robotaxi players in most markets. Is that the plan to do longer term to take market share given some of your structural cost advantages?
Elon Musk
Yeah. I mean, remember when you're comparing, you're comparing us with the rideshare, which has a driver in there and we don't, plus we are manufacturing the car ourselves. So our cost basis overall is different. And I think I said it in my opening remarks and I'll say it again, just don't want to be too repetitive, but basically our goal is to take over any kind of transportation. I mean, unless we're stopped by governments, which is certainly a possibility, like if they're trying to protect the domestic industry, I think Tesla will end up doing a majority of all passenger miles on Earth in any country where it is allowed to operate freely. And you can come back and look at this prediction, but I feel confident about this prediction.
Alex Potter
Really helpful. And then just my follow up question, I guess just on the key metric here. So unsupervised miles driven. So you know, I think it grew at a high teens compound growth rate since late July. Is it still the expectation you'll continue to grow that a double digit weekly rate through the balance of the year? And then what is really enabling that type of growth? It seems like you've definitely had a comfort level and scaling much more rapidly. You know, how much of that is Cyber Cab? How much of that is better safety validation with the latest version of FSD? And then just on fleet composition, do you expect Cyber Cab to represent majority of the robotaxi fleet over time?
Ashok Elluswamy
Yes, we will continue the scaling for the foreseeable future. We don't see any hurdles along the way. Obviously there's work required, but we do see a clear path towards scaling to millions of vehicles over the next several months. This is happening due to primarily the technology investments we have made for the last several years and also in V15 stack that we added earlier this year. Like all of the foundations is like hard to see is like a iceberg. You know, people only see the tip of the iceberg. There's a ton of work that goes into it. And now we're starting to see the payoff of all that work of like, you know, developing neural networks, learning from humans and so on. All of that is paying off. So that's what you're seeing, that you're seeing the result of many years of work. It didn't just happen in the last several months. Yeah. And the same technology should scale to millions of vehicles across wherever we are allowed to operate.
Travis Axelrod
Great. Our next question is going to come from Pierre from New Street. Pierre, please unmute yourself.
Pierre Ferragu
Thanks for taking the question guys. I just want to come back like I'm very fascinated by 75% of US cars selling with FSD. And the interesting thing is that if you get the cars they probably generate on sale the days they sell like about $7,000 of gross profit. But then of course FSD generates more than $1,000 a year. And so it makes a minimal impact on numbers in the quarter of the car is sold. But if there's a lifetime of the car, it probably at least doubles the profit back. And so the place where I'm going want to get to is am I looking at it the right way and are you at some point going to disclose for us like the annual recurring revenues that SSD represents and I did my own math and I'm thinking it's probably now approaching a billion dollars of. Is that the right order of magnitude?
Vaibhav Taneja
Yeah, I think your the numbers which you shared is all correct. And as it scales further, we will start sharing more metrics around FSD, not just the revenue, but also other key metrics around it.
Pierre Ferragu
OK. And as a quick follow up, do you have like a good sense already and can you tell us about like the retention rate like how many people like 3 or 6 months down the line stick to the monthly subscription and if you see the percentage of drivers falling off?
Vaibhav Taneja
Yeah. I mean, you know, like I said, we will share more metrics around churn rates and whatnot. But the reason we're not doing it at this stage is there are a lot of things which we're doing especially with new countries being added that we offer free trials. And one thing which I'd also like to make sure it's clear when I say in North America that more than that 75% attached it at the time of delivery. This is like every car which we're delivering comes with a month of free FSD subscription and still people are signing up even though they have that free available.
Travis Axelrod
Great. Our next question is going to come from Colin at Oppenheimer. Colin, please unmute yourself.
Colin Langan
Thanks so much guys. You know, Elon, can you talk about the strategy around ramping Optimus production just a little bit to start training? Even if the hands aren't fully baked with the final design, it seems like there's a lot that you could end up doing in terms of the training cycle and maturing some of the simulation technology even without perfected hands.
Elon Musk
Well, that's what we're doing is we're building robots that do not have perfected hands and we are making progress with Optimus training and ironing out. Well, that's, you know, all aspects of the supply chain and the production system. So that's, we're doing all these things in parallel, like this giant production line in at our Fremont factory, massive supply chain and then fine tuning the design and engineering simultaneously with the AI software. So all these things are happening simultaneously and we're going as fast as humanly possible here. I don't think anyone's going to have, and in fact, I'd be stunned if anyone has a robot that is remotely competitive with Optimus when we start delivering it to customers, which is likely to be towards the end of next year.
Vaibhav Taneja
Yeah. And you should know that, you know, not only the Fremont factory, we've also started constructing a factory here in Austin, which would be able to do a lot more robots as compared to the Fremont one. So going back to what Elon was saying, we're doing whatever we can. We're not stopping. We're just going at the fastest pace as we can.
Elon Musk
Yeah, we're definitely as they say in Vegas betting on the combo.
Colin Langan
Awesome. And then you know in terms of the semi caps, you know, capacity availability, can you talk about how you're navigating that with the suppliers, you know, obviously seeing some deposits get put down on equipment and getting deliveries moving forward is a net positive on tariff out. But are there some more aggressive things that you can do to start getting ready for the larger ramp now? And how should we think about that flowing through the CapEx budget?
Vaibhav Taneja
It's not a massive impact right now. I got packed. CapEx is actually ending up being a little lower than we anticipated, but it will sort of become more meaningful next year. And then noticeable like in the 10s of billions in 28.
Travis Axelrod
All right. But yeah, we are coming up on time here. We appreciate everyone's questions and we look forward to talking to you next quarter. Thank you very much and goodbye.
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