Tesla broke ground on a new Megafactory in Shanghai’s Lingang free trade zone pilot program. This factory will be Tesla’s first foray into battery production outside of the United States, mirroring its direction in Lathrop, California.
Batteries, Not Cars
Megafactory Shanghai won’t be producing cars but rather will be producing Megapacks, which are grid-scale battery solutions that can power entire electricity grids.
Each massive Megapack battery unit, about the size of a shipping container, can deliver about 1.2 megawatts of power capacity, with 3.9 megawatt-hours of electricity. A single Megapack unit can power approximately 3,600 homes for an hour.
The Megafactory is scheduled to begin production in early 2025, with production goals of 10,000 Megapack units per year.
Sustainable Energy and Megapack
One of Tesla's Megapacks
Not a Tesla App
Tesla’s mission is more than just producing self-driving cars – it’s to accelerate the world’s transition to sustainable energy. As part of this mission, Megapack and grid-scale energy solutions are key to offset energy costs and carbon emissions when wind, solar, or hydro are at reduced capacities.
Megapack helps to maximize renewable energy use, minimize carbon use, and allow base-load capacities like nuclear power to maintain their output. Similar energy-storage solutions like pumped storage hydropower are expensive, require specific terrain features, and can take years to construct. Megapack units ship assembled, allowing for rapid installation with minimal complexity.
Lathrop vs Shanghai
Tesla’s fairly new facility in Lathrop, California is a mirror of the new facility being built in Shanghai. However, just like the differences between Fremont, Giga Texas, and Giga Shanghai, Mega Shanghai will likely incorporate new technologies to improve productivity. Additionally, it serves as a way to serve the energy market in the Indo-Pacific region, which has been at the forefront of energy development in the last decade.
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During Tesla’s shareholder meeting, Elon Musk was asked if FSD transfers could return for existing owners. He hemmed and hawed, but eventually gave in when an audience member asked if they could return for just one more quarter.
Final Chance?
This could be the last chance for FSD owners to transfer their FSD capability to a new vehicle. Elon Musk mentioned that it removes revenue from upcoming vehicle sales. Every time Tesla offers FSD transfers, it impacts Tesla’s potential earnings.
On the flip side, it does incentivize current owners to upgrade to newer vehicles, especially if it’s a limited-time offer. Tesla previously offered FSD transfers in Q3 of 2023. FSD transfers are expected to be limited to North America where FSD software is currently available.
When Will Tesla Offer FSD Transfers
Musk nor Tesla mentioned a timeline for when FSD transfers would begin. Tesla owners looking to upgrade their vehicles would likely wait for this offer to be available before buying their new Tesla. Since this would reduce some vehicle sales, it seems that Tesla wouldn’t want to wait too long before making FSD transfers available again.
FSD Transfers in the Future
While Elon Musk didn’t seem to be too enthused with the idea of continuing transfers but gave in to “just one more quarter”, there could be more down the road.
Musk has said that Tesla has various demand “levers” they can use to increase or slow demand as needed. FSD transfers and Tesla’s referral program are prime examples of those levers. Although Musk says Tesla will only offer FSD transfers one more time, Tesla won’t hesitate to offer it again if they need to increase sales. Tesla faced this situation when the new Model 3 was unveiled in China, but it took several months for it to be offered in North America.
Additional FSD Trials
Elon Musk confirmed that two free weeks of FSD would be given to all vehicle owners whenever a major FSD update hits. We don’t expect another trial of FSD with the upcoming update of v12.4, but perhaps with v12.5 or 12.6, especially if Tesla adds new features such as ‘Actually Smart Summon,’ which will be the first time Smart Summon is available on a vehicle without ultrasonic sensors.
Did you miss the Shareholder Meeting? Want to know what Elon Musk said?
We’ve got an easy-to-read recap for you below, split by sections. We’ll be writing more in-depth about many of these topics over the upcoming days as we unpack all the awesome news!
Robotaxi
Fleet monetization planning is ongoing.
Owners will be able to send their cars to the Robotaxi fleet and summon them back when they need them.
Tesla will take a margin, but most of the income will go to owners.
Tesla has plans to solve driverless interventions in the future, but expects them to be edge cases of edge cases.
FSD
Headed towards Unsupervised FSD!
New subversions are essentially new full versions; 12.4 and 12.5 are massive updates.
Expect a 2-5x increase in performance between versions.
Major versions will include a 2-week free trial.
10 thousand miles between interventions for some internal builds.
Hardware 4 training will begin later this year, Hardware 3 will continue to be developed.
Hardware 5 is 18 months from retail release.
Optimus
Optimus will be able to do many simple and difficult tasks:
Teaching
Companionship
Babysitting
Factory Work
Tesla expects 2 humanoid robots per person in the future.
Tesla expects 1000-2000 robots working in its factories by next year, with a limited production run.
22 degrees of freedom in the next generation hand, one new major hardware revision coming this year.
Cybertruck
China and Europe-compliant Cybertruck coming after production is scaled and costs are reduced.
Foundation series ending soon, non-foundation series starting next quarter.
Semi
Semi is in low-volume production, high-volume production starting soon.
Companies are actively choosing Semi due to economic advantages.
Massive potential impact on carbon emissions
Big impact on the profitability.
Other New Products
New products are coming soon, and Tesla is working hard on them.
Possible 12-passenger van, added to the “To-do” list.
Supercharger
58K global sites, and continuing to grow.
More superchargers deployed this year than the rest of the industry combined.
Tesla is providing adapters to other car companies and providing them with support for Supercharger access.
Tesla is moving to fill gaps and relieve congestion where possible.
Battery Production and Stationary Storage
New 4680 innovations, best cell from a manufacturing and efficiency standpoint.
4680 will be a continuing focus to improve over time.
Tesla has made their battery supply chain stronger and is working on further vertical integration.
2023 had 15GWh of Megapack production, 2024 is looking closer to 40GWh.
100-200% growth rate in the energy storage market.
Tesla is constrained by Megapack and Powerwall 3 production, can’t keep up with demand, even as they scale rapidly.
AI and Compute
AI growth is on a weekly basis, with Tesla taking in video and training on decision-making faster than ever.
Tesla is not compute-limited for FSD, but scenario-limited.
There is an AWS-style opportunity for parked vehicles to run distributed inference and compute.
Tesla intends to introduce LLMs with customizable learning personalities to Optimus and its vehicle lineup.
Investor Facts
Elon Musk expects $5-10 Trillion valuation for autonomy, and $20 Trillion for Optimus.
Musk mentioned that Ark Invest has the closest scenario – with Robotaxi releasing in 2025 or 2026, for a 110x valuation increase.
Elon’s stock award isn’t cash, and he has no intent to cut-and-run and is with Tesla for the long haul to accomplish the mission.
Other Items
Tesla Home HVAC, with a built-in HEPA filter, humidity control, super-efficient, super-quiet, with Powerwall integration – one day.
Kids Factory Tour Event – for children under 12!
If you’d like to watch the shareholder meeting, you can view it here, along with all the stockholder vote results.
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![Andrej Karpathy considers returning to Tesla to work on Optimus [video]](https://www.notateslaapp.com/images/news/2022/karpathy-podcast_300w.jpg)
