LISTEN TO THIS TRANSCRIPT
Elon Musk (Chairman & CEO):
For better or worse, one can look at it as a pro or a con, depending on the situation, basically about 60% of the car, maybe a little more than 60%, is US and Canada.
We may have -- we certainly have lots of, say, European companies that supply us, but they will supply us from plants in the US or Canada or sometimes Mexico. So that's -- this really isn't a North American-built car, at least not for real.
So, it's like, as Deepak's saying, it's slightly helpful if the dollar strengthens relative to the yen. But then since we have quite strong European sales, this is -- I think it's like 5% of our parts or something come from Europe. It's pretty low.
Deepak Ahuja (CFO):
Right.
Elon Musk (Chairman & CEO):
-
Market's Upside Recipe Is Missing Something
RealMoneyPro | 05/11/15 - 04:26 PM EDT
-
Market's Upside Recipe Is Missing Something
RealMoney | 05/11/15 - 04:26 PM EDT
-
How Tesla Would Raise $3 Billion More for Second Gigafactory for Stationary Storage
TheStreet | 05/11/15 - 01:37 PM EDT
-
Tesla Reverses Its Misfortune
RealMoneyPro | 05/11/15 - 01:00 PM EDT
-
Tesla Reverses Its Misfortune
RealMoney | 05/11/15 - 01:00 PM EDT
If our sales are 30% in Europe, then obviously it's not as much of an offset as one would like. I actually thought it would be higher than that, but it's like -- because I'm looking at the names of the suppliers, but not -- what matters is where -- not the name of the supplier, if their headquarter's in Germany, but where is the plant?
Patrick Archambault (Analyst - Goldman Sachs): Got you. Okay. Thank you for the helpful color there. Elon Musk (Chairman & CEO): All right. I've got to run to another meeting. Jeff Evanson (VP of Global IR): We have two more question-askers. If we can quickly go. Hughie? Operator: Our next question will come from the line of Brad Erickson with Pacific Crest Securities. Brad Erickson (Analyst - Pacific Crest Securities): Thanks for taking my question. Just a quick follow-up from the last one on the automotive gross margins. I guess ex-currency, can you quickly talk, maybe a couple examples where you are looking to remove more cost from the cars itself? I think we can all appreciate there's continued scale advantages over time. If you could talk but other cost saving opportunities we should be thinking about with both the S and the X, and what inning we are in, in terms of achieving those savings? Thank you. Elon Musk (Chairman & CEO): A big factor is labor hours per vehicle. That has steadily improved. It was quite bad in Q4, particularly with the P85D ramp. We've made good progress in Q1. We'll continue to make good progress on that through the rest of the year. So it's labor and direct overhead in the factory. Deepak Ahuja (CFO): We're focused across every line item of our COGS. So material cost reductions, freight both inbound. We spoke a little bit about outbound freight efficiencies. Elon Musk (Chairman & CEO): We had a lot of expediting. Deepak Ahuja (CFO): Yes. Elon Musk (Chairman & CEO): That big port strike was super unhelpful. That also hurt pretty badly. It was like the, I think, the worst port strike of the 21st century. We also are soldiering through that. We had to air freight a ton of stuff while everyone else was simultaneously trying to air freight a bunch of stuff. Deepak Ahuja (CFO): It cost us several million dollars. Elon Musk (Chairman & CEO): Just to air freight, yes. Cutting back on air freight is really helpful. You had direct labor hours. Deepak Ahuja (CFO): We continue with several engineering and commercial actions on material costs. It's a long list, not appropriate to go through. As a Company, we are focused on Model X, but S is also certainly pulling gross margin there as part of our priorities. Elon Musk (Chairman & CEO): Yes. Brad Erickson (Analyst - Pacific Crest Securities): Got it. That's great. Thank you. Operator: And our final question in the phone queue will come from the line of Tyler Frank with Robert W. Baird. Unidentified Participant: This is [Ben]. Hey, guys. Very quickly, you mentioned the Gigafactory, and then a lot of talk about stationary storage and increasing of the Gigafactory. Does that change in any way you are looking at partnerships, green partnerships? And then maybe an update on timing there. And then Elon, you talked about having a fleet of a couple of hundred X to get out on test. And you mentioned Model 3, showing it next March. When should we see it, the Model X in its final version? Thanks, guys.