Martin Viecha: Thank you. The second question is, can you provide a progress update on the 4680 cell, particularly progress towards performance improvements and cost savings outlined on Battery Day? Thank you.
Unidentified Company Representative: Sure thing, Martin. 4680 cell production in Texas increased 40% quarter-over-quarter. Congrats to the Texas team for producing their 20 million cell off of line one. Texas is now our primary 4680 facility. We’re heavily focused on quality. Scrap is down 40% quarter-over-quarter. With the increased volume and yield improvements, cell costs consistently improved month-over-month within the quarter, although we have a lot more work to do to achieve our steady state goals. And that is our priority. The Cybertruck cell with 10% higher energy than our Model Y cell started production on line two in Texas. This quarter we convert to building a 100% Cybertruck cells to simplify and focus the factory as we ramp all four lines in Phase 1 over the next three quarters.
Phase 2 of the Texas 4680 facility is currently under construction. The additional four lines incorporate further capital efficiencies over Phase 1, and our target is for them to start producing in late 2024. Lastly, in Kato, we’re retooling to enable large scale pallet runs of our next generation cell designs. Kato’s long-term goal is to be the launch pad for new cells, one generation ahead of our mass production facilities, enabling faster iteration and smoother ramp ups of new designs.
A – Martin Viecha: Thank you. The next question from institutional investors. Could you please provide an update on capacity expansion plans for company’s factories in Berlin and Austin, and the opening schedule of Gigafactory Mexico?
A – Unidentified Company Representative: Berlin and Austin factories, the current priority is actually maximize the output from our existing lines, by laser focus on efficiency improvement. As always, maintaining a high quality and the reducing per unit cost will be as critical as growing the production volume. For Mexico, we’re working on infrastructure and factory design in parallel with the engineering and development of the new production that we’ll be manufacturing there. That’s what I can share for now.
Elon Musk: In Mexico we’re laying the groundwork to begin construction and doing all the long lead items. But I think we want to just get a sense for what the global economy is like before we go full tilt on the Mexico factory. I’m worried about the high interest rate environment that we’re in. I just can’t emphasize this enough that the vast majority of people buying a car is about the monthly payment. And as interest rates rise, the proportion of that monthly payment that is interest increases naturally. So, if interest rates remain high or if they go even higher, it’s that much harder for people to buy the car, they simply cannot afford it. And we are tracking, I believe at this point for Model Y to be the best selling car on earth, but not just in revenue, but in unit volume.
If you compare that to the other vehicles that are number two and number three and whatnot, they cost much less than our car. So, we’re just hitting law of large numbers situations here. I know people want to us advertising, we are advertising. I think there’s something to be gained on the advertising front. I don’t think it’s nothing. But informing people of a car that is great, but they cannot afford doesn’t really help. So that is really the thing that must be solved is to make the car affordable or the average person cannot buy it for any amount of money or they can’t afford it. So, this is big deal.
Martin Viecha: The next question is, when do you expect Model 3 Highland to be available in the U.S.? I just wanted to address that unfortunately we don’t answer product related questions and timings on earnings calls. So let’s go to the next one. Current sell side consensus assumes that Tesla will deliver 2.3 million vehicles in 2024, representing 28% growth versus 2023 guidance. Is this growth rate achievable without any mass market launches in 2024? And when does Tesla expect to return to its 50% long-term CAGR?
